Montero announces closing of acquisition of Phosphate Assets in South Africa
Toronto, Ontario (November 10th, 2011): Montero Mining and Exploration Ltd. (“Montero”) has completed the arm's‐ length acquisition of four phosphate exploration projects as announced on October 14, 2011. The phosphate projects (“Phosco Assets”) are Duyker Eiland, Phillips Kraal and Lamberts Bay in the Western Cape and Bierkraal in the Northwest Province in the Republic of South Africa.
The purchase price for the Phosco assets consists of the issuance of 2.5 million common shares of Montero to the vendor (Celtic Trust Company Limited). In addition, Montero is required to complete an initial exploration program on one (the Bierkraal project) of the four projects within 18 months of closing, which includes drilling. A further one million common shares of Montero shall be issued to the vendor within 18 months, if Montero delivers an NI 43‐101 report identifying a phosphate resource on all or part of the Bierkraal project, or if Montero otherwise elects to maintain the Bierkraal project. If the Bierkraal project is not maintained by Montero it is to be returned to the vendor. Upon closing, Montero will have 100% ownership of the other three projects and there is no further obligation to the vendor with respect to those projects. Montero paid $100,000 to the vendor in consideration for receiving an exclusivity period to conduct due diligence prior to closing.
Dr. Tony Harwood, President and Chief Executive Officer of Montero commented, “We are excited about the acquisition of these phosphate assets due to the potential of the historical mineral resources. Nearly 30Mt of resource have been declared with historical drilling on the Duyker Eiland project, which given its location, geology and metallurgy, could generate value for our shareholders. The potential on the other phosphate projects could provide further value. These assets came to the attention of Montero through our research and targeting of rare earth elements that may occur associated with phosphate deposits. We continue to focus on development at our flagship Wigu Hill Rare Earth Project in Tanzania as we target updating our current resource estimate to define a mineable resource to bring into production.”
The Western Cape projects (Duyker Eiland, Phillips Kraal and Lamberts Bay) all show a similar geologic setting, marked by the presence of Tertiary/Quaternary sediments consisting of calcareous and aeolian sands, calcretes and phoscretes. The Bierkraal project area is located in an apatite rich layer of the Bushveld Igneous Complex. Apatite is a group of phosphate minerals that occasionally can contain significant amounts of rare earth elements (REEs) and can be used as an ore for these elements.
The exploration of the Western Cape phosphate prospects started in the 1940’s and 1950’s with AMCOR (which became part of Samancor in 1975) who identified the presence of citric‐soluble phosphates on the Duyker Eiland Property. During the 1960’s, African Explosives and Chemical Industries Limited (AECI) conducted drilling and pitting on the Property. This information, as well as compilations of the historical resource estimates and other geological information, are recorded in the publication: Visser, H.N. and Scholch, A.E., 1973. The Geology and Mineral Resources of the Saldanha Bay Area. Memoir 63, Department of Mines, Geological Survey of the Republic of South Africa.
The source of the historical information is an official publication of the Geological Survey of the Republic of South Africa and is thought to be reliable, however, original drill hole records have been lost. The assumptions, parameters and methods used to prepare the historical estimates are unknown and resources are not classified into a format compatible with Canadian Institute of Mining Definition Standards. In line with standards for disclosure of historical estimates, Montero states that a qualified person has not done work to classify the historical estimate as current mineral resources and Montero is not treating the historical estimate as such.
Given that the original drilling and pitting data is not available, it was decided that, as part of a due diligence program, a new drill program would be performed to validate and define a resource on the Duyker Eiland property. A summary of historical resources (from the above historical source) for the Duyker Eiland Property are presented in the table below:
| Duyker Eiland Project Area | Ore Tonnage (Mt) | Average Grade P O 2 5 (%) |
|---|---|---|
| Western Area | 8,000,000 | 8.3 |
| Central Area | 11,230,000 | 8.0 |
| Eastern Area | 7,141,000 | 5.0 |
| Skoongesig | 2,353,000 | 10.0 |
| Stompneusbaai | 1,200,000 | 9.5 |
| TOTAL | 29,924,000 |
The Montero due diligence assessment on the Duyker Eiland property includes the compilation of historic data, desktop studies, field visits, geological mapping and summary drilling data. A Reverse Circulation/Air Core drilling program was undertaken at Duyker Eiland during the 2011 due diligence period. A 400m x 200m grid was established and a total 26 vertical holes (613m) were drilled to an average depth of 23.6 m. A similar drilling program was also undertaken at Phillips Kraal during the 2011 due diligence period. A total of 10 vertical holes were drilled (369m).
The results of this program with assays and preliminary metallurgical testing from Duyker Eiland property is being compiled into a NI 43‐101 technical report by AMEC Earth and Environmental (UK) Limited. This report is expected shortly and will be filed on www.sedar.com upon completion.
Qualified Person’s Statement
The technical information contained in this press release has been reviewed by Mr. Mike Evans, M.Sc. Pr.Sci.Nat., who is a qualified person for the purpose of National Instrument 43‐101 and a consulting geologist to Montero.
About Montero Mining and Exploration
Montero Mining and Exploration Ltd. Is a mineral exploration and development company engaged in the identification, acquisition, evaluation and exploration of mineral properties primarily focused on rare earth elements (REE), phosphates and uranium in Tanzania, South Africa and Quebec, Canada. Montero is focused on adding value for all shareholders through the acquisition and exploration on properties, which have the highest potential for future discoveries or development of existing mineral resources into mineable reserves. We remain engaged in the development of our flagship Wigu Hill Rare Earth Element Project in Tanzania, which is a high‐grade, undeveloped Light Rare Earth Element deposit. The Company’s current focus is on further exploration drilling to add to our initial NI 43‐101 Mineral Resource Estimate. With the rising prices of REEs and China's control over export quotas, it is becoming imperative that the rest of the world develops new rare earth resources to meet the increasing demand from “green” technology and high‐tech applications.
Montero’s growth strategy is to develop the Wigu Hill Rare Earth Element project and to bring this to account through eventual rare earth production and cash flow, while operating in an environmentally and socially responsible manner. We will continue to add value for all stakeholders through the development of our portfolio of properties. Montero trades on the TSX Venture Exchange under the symbol MON.
Signed. Dr. Tony Harwood ‐ President and CEO
For more information, contact:
Montero Mining and Exploration Ltd. Renmark Financial Communications Inc.
Richelle Chapman, IR Communications Peter Mahzari : [email protected] E‐mail: [email protected] Arash Shahi: [email protected] Tel: +1 416 840 9197 | Fax: +1 866 688 4671 Tel.: (514) 939‐3989 or (416) 644‐2020 www.monteromining.com www.renmarkfinancial.com NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES
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