analyst report, page-15

PERTH -

Monarch Gold which poured its first gold late last year has a target production this financial year of 125,000 ounces of gold, lifting in 2008/09 -- through opening up of other mines in the eastern goldfields - to 250,000 oz.

Chairman Michael Kiernan told the RIU Explorers Conference in Fremantle that Monarch was now the biggest tenement holder in both the Kalgoorlie and Mount Magnet goldfields.

The quest is to grow Monarch to a target 500,000 oz per annum by 2009/10 which should come from aggressive drilling programmes on all the major Western Australian properties, but Kiernan pointed out that Monarch was keen to acquire more properties, and not necessarily just in WA.

The last acquisition in the last quarter of 2007 was the Mt Magnet gold operations from Harmony Gold which has been steadily exiting the Australian gold mining scene.

Kiernan said the cash and scrip deal was worth considerably less than the figure Harmony had paid late last decade for the project areas before adding to infrastructure and housing in Mt Magnet.

He told Mineweb that Mt Magnet -- despite established resources of 2.7 million oz (at a grade of 3.2 g/t gold) -- was going to remain in mothballs when control of the assets is taken in May, and this may last for 18 months. The exploration spend there over the next two years could be $A10 million ($US9 M) each year. When re-opened it was planned to operate at 125,000 oz pa instead of Harmony's recent target of 200,000 oz pa, and this should provide better economics as well as a focus on better grades.

A search spend is also taking place in the eastern goldfields on the line of mining leases from Davyhurst - where there is a mill - through Riverina, north to Mt Ida. That figure could be more than $A6 M ($US5.4 M) pa.

As Monarch brings mines at Riverina and Mt Ida into production the potential may be there to open up new areas on which Monarch was currently targeting potential new resources. Mt Ida's established shaft and workings would provide a high grade (24 g/t) underground ore feed.

Kiernan indicated that the Minjar project in the Yalgoo goldfield with a resource of 400,000 oz at a grade of 2.4 g/t and a gold plant was now outside of the regional search focus and may be sold.

The company will now raise a further $10 M ($US9 M) as capital development money for Riverina and the Missouri open cut in Davyhurst's Siberia group of claims.

Monarch is the first Australian mining stock to list on the new Dubai Stock Exchange. Kiernan told Mineweb that this foundling exchange should have a strong market impact within three years.