The Mengapur Polymetallic Project is located in Pahang State, Malaysia, approximately 130 kms southeast of Monument's wholly owned Selinsing Gold Mine and 75 kms northwest of the Malaysian port city of Kuantan. Mengapur was previously owned by Malaysian Mining Corporation in the 1980's and early 1990's which defined the historical Polymetallic resources in a full bankable feasibility study. The title of Mengapur was subsequently divided and distributed to different owners. Monument acquired 100% of Mengapur from those owners, in fiscal 2012 and 2013 through strategic steps aimed to maximize economic value of the project, except for the oxide magnetite materials in the top soil at lot 10210 that were not included in the historical resources in the full bankable feasibility study. The Company now owns a 100% interest in the Cermat Aman Sdn Bhd ("CASB") mining lease ("ML") and holds an application for renewal of its exploration license ("EL") and three applications for mining leases ("ML") over Star Destiny Sdn. Bhd. ("SDSB") elements of the Mengapur Polymetallic Project. The Company is waiting for the issue by the Pahang government of these licenses.
The Mengapur Polymetallic deposit contains a historical Copper ("Cu"), Sulphur ("S"), Gold ("Au"), Silver ("Ag") oxide and sulphide Resource from a drilling campaign conducted in the 1980's as previously reported in the Snowden report (January, 2012). The historical resource consisted of 224 million tonnes ("mt") averaging 0.597% Cu equivalent ("eqv") (6.54% S, 0.25% Cu, 0.16g/t Au, and 8.86g/t Ag) at a cut-off grade of 0.336% Cu eqv from geologic Zones A, B, and C. A historical sulphide reserve from Zone A consists of 64.8mt averaging 0.737% Cu eqv (8.63% S, 0.27% Cu, 0.21g/t Au, and 2.59g/t Ag) at the same 0.336% Cu eqv cut-off grade (Snowden, 2012). The Company completed 64,000 meters of exploration drilling verifying these historic resources and is now in the progress of advancing them to NI 43-101 compliance and is awaiting issue of an ML title over the Star Destiny ML application.
Activities related to the preparation of the Mengapur NI 43-101 Technical Report included additional metallurgical test work at Inspectorate (Canada), summarizing and assigning the metal recovery results and associated concentrate grades for sulphide and transitional mineralization, updating the processing costs, working on the resource pit, and working on the data audit and QA/QC analysis. The completion of the NI 43-101 report is waiting for the completion of remaining metallurgical test work and analysis. The report is not able to be completed or published until the required title to the mining land issues.
Oxide Magnetite Purchase and Profit-Sharing Agreement
Oxide magnetite materials in iron oxide overburden "soils" of the Mengapur property belong to Malaco, the previous owner of the Mengapur Project. Monument Mengapur Sdn Bhd ("MMSB"), a wholly owned subsidiary of Monument, is the sole operator of all iron production of the overburden soils. Phoenix Lake Sdn. Bhd. ("PLSB") (the "Third Party") has an exclusive right to mine the iron ore in free digging top soils in Areas A (replaced ZCM Minerals Sdn. Bhd.) and Area B of the Mengapur mine site under the "harmonization" agreement between the Third Party and MMSB.; and Monument has right to protect its mineral assets and has access to sulphide and transitional resources in the same areas. The Company has an established grade control and survey team present at the operation, with all costs recovered in full.
On January 29, 2014, the Company entered into a binding Oxide Magnetite Purchase and Profit-Sharing Agreement (the "Agreement") with Malaco. The Agreement pertains to Area C of the Mengapur project and confirms Monument's right to access, extract, process and sell the oxide magnetite materials from Area C overburden; in addition, Monument would purchase approximately 1.2mt of stockpiled iron oxide soils at Area C, intended to be used as initial inventory for approximately the second year of iron oxide production. The decision to proceed with recovering the iron oxide to concentrate will depend on the prevailing market price of the iron product, and it is currently on hold.
Research and Development
Since acquiring the Mengapur Project development work has included camp development, setup of an SGS on site laboratory, construction of additional housing accommodations, additional power generation sets, and upgrades to the diesel storage and the septic system as well as work to refurbish the existing plant. Significant exploration for approximate 64,000m drilling was completed to confirm and further define resources, and metallurgical test work was carried out as a part of preliminary economic assessment study. R&D programs on iron and copper recovery and upgrading the 1,000 tpd plant at Mengapur has made considerable progress, aimed to generate cash from iron and copper production in near future.
However, due to the depressed and volatile commodity prices, the start-up of the Mengapur project is delayed and the main plant is put on care and maintenance while some work will continue at a reduced level. The Company will maintain its SGS operated site analytical laboratory, security and site maintenance functions. The laboratory will continue to turn out assays for the Selinsing exploration program, the Selinsing process plant control assays as well as provide assay and R&D support to both the Selinsing and Mengapur Research and Development laboratories.
In parallel with these developments, the Company will be looking at the best way to introduce programs at Mengapur using Intec technology recently acquired by way of a license for South East Asia to use the technology to produce close to LME grade copper metal and a range of other base metals from Mengapur material. The technology can potentially produce a copper metal product on site without having to export a copper concentrate. Monument will also be investigating the local demand for copper metal within Malaysia in applications that manufacture copper pipes, wires and other copper value added products. The Company believes this could potentially improve the economics of the project considerably in the present environment.