rumours re monarch and sre, page-3

Kiernan close to regaining control of Monarch
9th June 2009, 8:45 WST

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Michael Kiernan is poised to reemerge with control of Kalgoorlie gold play Monarch Gold Mining, almost a year since it collapsed after the dealmaker’s fallout with major creditor Territory Resources.

It is understood that Mr Kiernan’s new company, the publicly listed Stirling Resources, and Monarch’s administrator Bryan Hughes will agree to a recapitalisation plan for the gold miner as early as this week.

The deal will see Stirling take control of the Davyhurst mine and plant, north of Kalgoorlie-Boulder, as well as the high-grade Mt Ida project.

The Minjar mine near Mt Magnet, which was also part of the Monarch stable, has already been sold to mining contractor Robert Nash.

Mr Kiernan is overseas and could not be reached for comment. But it is understood he will use his relationship with Austrian commodities trader DCM DECOmetal to help fund the Monarch buyout as part of a pledge to repay the collapsed gold miner’s entire debt of about $40 million. DCM is a big shareholder in the Kiernan-controlled Stirling.

Monarch collapsed a year ago because it was haemorrhaging cash at Davyhurst while Territory, after a major bust-up with Mr Kiernan, refused to provide more funding to keep the miner afloat. Until then Territory had been the main funder of Monarch, accruing a 19.9 per cent equity stake, having lent it $21 million. An immediate resumption of gold production at Davyhurst and Mt Ida is expected to help fund Stirling’s debt repayment plan.

When Monarch collapsed, gold was worth about $1000 an ounce. Bullion was trading at $1208/oz last night.

PETER KLINGER

and the mon shareholder????