Monarques Gold signs an agreement to acquire the Beacon mill and property in Val-d'Or

Press release highlights:

• Fully permitted mill with 750 tpd capacity
• Located in Val-d'Or on the 117 highway
• Tailings ponds capacity of 1.8M tons (9-year life at full capacity)
• Price of $3.5M with no cash payment until 30^th month
• Interest holiday until 2^nd anniversary
• Railroad access at less than 1 km
• Property with great exploration potential

MQR.V

MONTREAL, July 5, 2016 /CNW/ - MONARQUES GOLD CORP. ("Monarques" or the "Corporation") (TSX-V: MQR) (FRANKFURT: MR7) is pleased to announce that it has signed a letter of intent (the "Letter of intent") to acquire the Beacon property from 9265-9911 Québec Inc. (the "Vendor"). The property consists of a metallurgical processing plant, tailings management ponds, underground installations, a 500-metre deep shaft, a mechanical shop and all mineral rights attached to the transaction, namely one mining concession, one mining lease and 11 mineral claims totalling 180 hectares (the "Beacon property"). The facilities are approximately 60 kilometres from the Croinor Gold property ("Croinor"), and near other properties of Monarques, and other mining companies in the Abitibi-Temiscamingue region (see the map).

The transaction

Monarques has until August 31, 2016, or such other date as the parties may agree, to proceed with the acquisition of the Beacon property in consideration of a $3,500,000 payment, as follows:

i)	$500,000 on closing of the transaction, payable by the issuance of 1,308,900 common shares of Monarques to be issued on or before July 11, 2016, subject to the approval of the TSX Venture Exchange. The share certificate will be held in escrow and remitted to the Vendor on the closing date if all conditions have been met or waived by the Corporation and/or the Vendor; and
ii)	$500,000 payable in cash at the 30^th, 36^th, 42^nd, 48^th, 54^th and 60^th month following the closing of the transaction (the "Deferred Payment").

The Corporation will not pay any interest on the balance payable during the first two years following the closing of the transaction. Thereafter, the amount payable will bear interest at 10% per annum, payable semi-annually.

The processing plant (see the photo) is located on Route 117, at the entrance to Val-d'Or, near Chemin du Lac Sabourin (see the map). The 750-tpd capacity mill has been given a certificate of authorization by the Ministère du Développement durable, de l'Environnement et de la Lutte contre les changements climatiques (the "Ministry") for the processing of 1,800,000 tonnes of tailings, equivalent to approximately nine years of mineral processing at full capacity. This capacity could be sufficient to process all the Croinor ore; a prefeasibility report (read the report) with an effective date of October 7, 2014 and refiled on SEDAR on October 30, 2014 provides for the production of more than 550,000 tonnes of ore over a five-year period. Custom milling and the future development of other Monarques projects are among the options being considered in the various development scenarios for the Corporation.

"Monarques is extremely pleased to have entered into this transaction to acquire the Beacon mill. This is a very opportunistic acquisition for the Corporation," stated Jean-Marc Lacoste, President and Chief Executive Officer. "Not only does this acquisition provides Monarques with a tremendous exploration land package of over 180 hectares including 11 mineral claims, one mining concession and one mining lease, it also provides the Corporation with a mill at a price which is at a fraction of its replacement cost. Owning this mill will insure that the Corporation will be able to process its own ore at such time in the future when it's fully permitted Croinor property is ready to go into production."

The Canadian National ("CN") railway line is less than 500 metres away from the Beacon property, providing Monarques with easy access to the rail network. This will make custom milling accessible to other mining projects in the Abitibi-Temiscamingue region, as well as those in northern Ontario and the Chibougamau region. Monarques has been in talks with CN, the town of Senneterre and the La Vallée-de-l'Or RCM for the past several weeks to assess the various scenarios for rail transport of the Croinor ore, which would minimize the Croinor project's carbon footprint.

Hypothec

The capital and interest will be secured by a first-ranking hypothec on the Beacon property mill.

Principal repayment delay option

The Corporation may, at its option, delay repayment of any of the first three Deferred Payments by giving written notice to the Vendor.

In the event that a Deferred Payment is delayed in accordance with this option, such repayment shall be subject to a premium of 20% and become due for payment in three equal amounts on the 1^st business day of the 48^th, 54^th and 60^th month following the closing date. This option applies to both capital payments on the mill and the rehabilitation plan payments and are all starting on the 30^th month of the closing or the 48^th month depending if the option is exercised.

Rehabilitation plan

Monarques will reimburse to the Vendor the mill rehabilitation plan cash deposits that the Vendor has already paid to the Ministry, as follows:

i)	$452,690 on the closing date in common shares of the Corporation calculated using the higher of (i) the 5-day VWAP on the closing date or the date of the Letter of intent, subject to the TSX Venture Exchange policies and; (ii) the lowest price of any placement in equity occurring between the date of the Letter of intent and the closing date, taking into consideration any discounts and fees associated with such raise.
ii)	A sum of $900,000 that will be repaid in six consecutive equal payments of $150,000, starting at the 30^th month following the closing of the transaction and payable semi-annually until the 60^th month. An interest holiday will apply for the first two years following the closing of the transaction, after which an interest of 10% per annum will be payable semi-annually.

According to a preliminary report prepared for Monarques by WSP Inc. of Val-d'Or in November 2014, the mill requires between $2M to $3M in upgrade work.

Exploration potential

The old Beacon mine lies on the southeast contact of the Bourlamaque batholith, which hosts a significant number of mines, including the Sigma, Lamaque, Belmoral, Dumont, Lac Herbin and Beaufort mines. Both the geological context and the results of previous work indicate that this property is an excellent exploration play.

Terms of the agreement

The agreement is subject to:

i)	the completion of a due diligence review of the Beacon property, including but not limited to the mining rights, processing plant, surface and underground infrastructure, and engineering reports, to Monarques's satisfaction;
ii)	the completion of a due diligence review of Monarques by the Vendor;
iii)	regulatory and Ministerial approvals; and
iv)	negotiation and signature of the formal deeds of sale and hypothec.

The technical and scientific content of this press release has been reviewed and approved by Donald Trudel, P.Geo., B.Sc., the Corporation's Qualified Person under National Instrument 43-101.

ABOUT MONARQUES GOLD

Monarques Gold is a growing junior gold company focused on becoming the leading explorer and developer of gold properties in the Val-d'Or/Abitibi gold camp in Quebec, Canada. The Corporation currently has approximately 200 km² of gold exploration properties along the Cadillac Break, including its main asset the  Croinor Gold mine, which has a great potential of becoming a producing mine. Monarques Gold is well financed and has over $9 million in credits from Quebec's Ministry of Energy and Natural Resources.

Forward-Looking Statements

The forward-looking statements in this press release involve known and unknown risks, uncertainties and other factors that may cause Monarques' actual results, performance and achievements to be materially different from the results, performance or achievements expressed or implied therein. Neither TSX Venture Exchange nor its Regulation Services. Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

SOURCE Monarques Gold Corporation

Image with caption: "We are moving forward! (CNW Group/Monarques Gold Corporation)". Image available at: http://photos.newswire.ca/images/download/20160705_C7263_PHOTO_EN_726951.jpg

Jean-Marc Lacoste, President and CEO, 1-888-994-4465 x 201, [email protected], www.monarquesgold.com; Katherine Fedorowicz, VP, Marketing & Investor Relations, Red Cloud Klondike Strike Inc., 1-877-919-5979, [email protected], www.RedCloudKS.com