Successful mergers and business acquisitions
Gold mining companyWebsite
Founded in 2011
Headquarters in Saint-Sauveur
Market capitalization: $55 million
When small buys big
When it was created in 2011, Monarques Gold Corporation (Monarques Gold) was a small mining exploration company. Specializing in the acquisition, exploration and development of precious metals-rich properties, it operates mainly in the James Bay region.
Ready to soar
The recession caused by the mining boom was a period that hit the commodities sector hard. At the time, Monarques Gold divested itself of land in the North to focus on gold, planning to relocate its operations to Abitibi.
As a result, at the first sign of recovery in spring 2016, Monarques Gold was poised to take off. It acquired 14 properties from five businesses that had wound up operations, including a much larger operator, Richmont Mines. This transaction, which took place in fall 2017, was worth $20 million. That's quite a feat!
Today, Monarques Gold owns nearly 300 square kilometres of gold properties, including the Wasamac Gold Deposit, Beaufor Mine, Croinor Gold, McKenzie Break and Swanson Projects, Camflo and Beacon Mills, plus exploration rights for five promising projects. It also provides contract machining services from its Camflo Mill.
Interview with Jean-Marc Lacoste, CEO of Corporation Monarques Gold
[A man wearing a black suit sits in a yellow armchair holding a sparkling rock.]
Jean-Marc Lacoste: This is where everything starts, with the twinkle of a gold speck in a rock. That's how Monarques Gold was born.
[Background music: Classical music.]
[A coniferous forest surrounds the base of a bare stone mountain.]
[Text on screen: When the small player buys the big player.]
[Trucks drive along a dirt road in an open-pit mine.]
Jean-Marc Lacoste: Jean-Marc Lacoste, president and chief manager at Monarques Gold Corporation, Abitibi region.
[Jean-Marc poses, smiling, in front of a glass panel bearing the logo of his company.]
Jean-Marc Lacoste: It was not easy at the beginning because the economic situation at the time did not favour the raw material markets such as the gold industry.
[Jean-Marc unrolls a map on a conference table and examines it with a man and a woman.]
Jean-Marc Lacoste: Desjardins Capital was with us from the start. Marco Gaignard played a vital role in the development of our company. From the start, the initial investment and the birth of Monarques, Desjardins Capital was there for us. They stayed with us throughout the decision process, up until the final climax last year with the acquisition of Richmont Mines.
[Seated at his desk, Jean-Marc speaks on the phone.]
Jean-Marc Lacoste: Throughout the transaction, we felt like the frog that swallowed the ox. It was a transaction that was initiated by a small company in order to buy assets that were much more imposing than us.
[The city of Val d'Or is marked by a black dot on a map of Quebec. An advertising poster bears an aerial photo of an open-air mine surrounded by a forest and the text, "MINE BEAUFOR, more than a million ounces produced."]
Jean-Marc Lacoste: That was quite the feat - a small player buying out the big one.
[Photos scroll past: two workers walking in an underground mine, a grid pattern drawn on a rock face, a miner kneeling to pick up rock fragments from the ground.]
Jean-Marc Lacoste: What we are most proud of at Monarques is, first and foremost, are the people who work with us, the 170 families who work for Monarques and are under my responsibility every day.
[A massive conveyor belt transports rock fragments from an underground mine onto the sandy soil outside.]
Jean-Marc Lacoste: Each year, Monarques produces around 25,000 ounces of gold, which, in the current market, can add up to 30 to 40 million Canadian dollars every year in gold.
[A blowtorch melts gold in a crucible. Stamped gold bars lined up in rows.]
Jean-Marc Lacoste: My advice to young entrepreneurs would be to surround themselves with people who believe in you. It will give you the wings to carry you to the next step.
[The logo of Monarques is inscribed on a pane of glass; the "M" is shaped like a butterfly with gold-strewn wings.]
[Image on screen: Desjardins Capital logo.]
"You should never underestimate the strength of the smallest. With the right financial partner, magnificent things can happen. For us, it has changed the course of Monarques Gold's history." - Jean-Marc Lacoste, CEO of Monarques Gold Corporation, 2018
Desjardins Capital's analysis
Monarques Gold's strengths
- Strategic vision
- Structured planning and management
- In-depth market knowledge
- Qualified management team
The key to successful business acquisitions and mergers
As an entrepreneur, you have great ideas and the dream of seeing your business grow. Buying a business to stimulate the growth of yours or ensure its longevity is an initiative that can pay off.
Whether you are contemplating a merger or an acquisition, you will need to prepare for it properly and plan the transaction carefully.
The first step is to find the right company in terms of activities, size, value and location. You will also have to assess the risks and identify the problems and challenges that may arise before, during and after the transaction. You will need to cover all your bases! Finally, it's time to seal the deal and forge ahead.
Many difficult — and necessary — steps lie ahead of you. You will want to surround yourself with experts to make sure you do not fall flat on your face! What's more, you will greatly benefit from the advice of a trusted financial partner throughout the decision-making process!
Desjardins Capital's support
"My meeting with Marco Gaignard, our investment manager at Desjardins Capital, was instrumental. Our relationship has only grown over time and, without this support, I do not think that Monarques Gold would have the market share it has today. Marco put us at ease with his proximity and the quality of his advice. He was there for us during our first big project: buying the "competition"! At our first meeting, he referred to our deal as "patient capital." I can honestly say I now understand what he meant after facing some challenging situations. Through it all, Desjardins Capital remained by our side, despite many obstacles." - Jean-Marc Lacoste, President and CEO of Monarques Gold Corporation