Monarch Mining Corporation

CN: GBAR

Market CapC$57.7m

Last Close C$0.74

Monarch Mining Corporation is a Canadian gold explorer with one past producing asset, one major near-term project and two second tier projects in the Abitibi, Quebec, gold belt.

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Investment summary

Monarch Gold (MQR) sold its Wasamac and Camflo assets to Yamana for C$200m but retains a suite of potentially high-return projects as Monarch Mining, which it spun out in January 2021. Its portfolio is located in the established and highly prospective Abitibi gold belt. Beaufor mine and the Beacon mill is planned to re-start production by June FY22 with minimal capex. Once in production, its cash flows plus existing cash will be invested in Croinor, due to start up in FY24. Our valuation is C$0.99/share comprising C$0.69 for Beaufor and Croinor and C$0.30/share for second tier assets McKenzie Break and Swanson. A C$6.7m private placement of units and excellent drilling results on Beaufor will increase its measured, indicated and inferred (MI&I) resources when updated in August 2021 and likely improve its valuation.

Y/E Jun
Revenue (C$m)
EBITDA (C$m)
PBT (C$m)
EPS (c)
P/E (x)
P/CF (x)
2019A N/A N/A N/A N/A N/A N/A
2020A N/A N/A N/A N/A N/A N/A
2021E 0.0 (3.8) (4.0) (5.9) N/A N/A
2022E 20.5 (3.4) (3.8) (5.2) N/A N/A
Industry outlook

Canada ranks second in the world and Quebec ranks top quartile overall in the 2020 Fraser Institute index of mining attractiveness. M&A activity in the region has picked up in recent years, with the QMX Gold acquisition in January implying a valuation C$170/oz and a peer group trading at an average of C$61/oz versus Monarch at C$49/oz at the time of our initiation.

Last updated on 22/09/2021
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Sector
Metals & mining
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Share price graph
Balance sheet
Forecast net cash (C$m) 14.5
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (9.8) (11.9) N/A
Relative* (10.0) (12.8) N/A
52-week high/low C$1.2/C$0.6
*% relative to local index
Key management
Jean-Marc Lacoste CEO
Mathieu Séguin VP, corporate development