Phoenix-like Monarch Gold to become a Swan

By Ross Louthean, Mineweb.net

Emerging mining house Stirling Resources Ltd (ASX: SRE) said today that it had reached agreement with administrators Pitcher Partners to inject funds into Monarch Gold (ASX: MON) to fund a re-start of mining at Davyhurst and Mount Ida in Western Australia's Eastern Goldfields.

Stirling's managing director is Michael Kiernan who has made it clear in recent months that he was a candidate to recover Monarch Gold from the scrap heap which it landed on in July last year, after going into voluntary administration.

Kiernan told MineWeb that the aim was to re-list on the ASX under a new name, Swan Gold Mining Ltd.

Stirling will provide the capital through wholly-owned subsidiary, Stirling Gold Pty Ltd and the agreement will ensure all Monarch creditors and debt providers receive 100 cents in the dollar -- being a total payout of $A55 million ($US43.1 M).

Kiernan said the strong rise in the gold price over recent times would see the previous cash-negative operations at Davyhurst delivering gold at a healthy cash margin.

Stirling Resources undertook a $A250,000 ($US196,000) mine study which included reassessing, reviewing, and mine planning including metallurgical, engineering and geological analysis.

Kiernan said Mt Ida was targeted to produce 48,000 ounces per annum at a projected cash cost of $A450/oz ($US352/oz) and Davyhurst - expected to re-commissioned within three months of settlement - has a production target of 65,000 ounces pa year at a projected cost of $A850/oz ($US666/oz).

"We had been determined to reach an agreement that enabled all creditors and debt providers to receive full payment and to see the Monarch corporate structure survive for the benefit of all existing shareholders together with ensuring a healthy return for Stirling Resources via dividends," Kiernan said.

He expected Stirling Resources to ultimately hold about 40% of Swan Gold Mining. Equity funding for Swan was expected to be satisfied by Stirling Gold issuing a Commercial Bond to Austrian international commodity leader DCM DECOmetal, a major shareholder in Stirling Resources.

Stirling has invested in and is developing copper, zircon, coking coal, gold and iron ore projects.

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