MNA Monterrico

RNS Number:6799C
Monterrico Metals PLC
23 August 2007



                             Monterrico Metals plc
                        ("Monterrico" or the "Company")

                                                                        AIM: MNA



            MONTERRICO LAUNCHES US$80 MILLION PRIVATE FUND PROPOSAL
                  FOR COMMUNITIES WITHIN AREA OF INFLUENCE OF
                             THE RIO BLANCO PROJECT



LONDON: 23 August 2007. Monterrico, the AIM listed copper company, announces
that it has formally proposed to each of the two principal local communities in
the area of influence of Rio Blanco, their participation in two US$40 million
private Funds (the "Funds"), to be established for the benefit of each of these
communities. This initiative is part of the Company's ongoing Social Programme
designed to strengthen links with the local communities surrounding its Rio
Blanco mining project in northern Peru. The Funds will be met from a combination
of seed funding from Monterrico and from a share of the profits of the mining
operation, and are expected to reach a total value of US $80m over the life of
the Project.



The Funds represent a voluntary initiative by the new management of the Company
to share the benefits of the Rio Blanco Project with the communities in the area
of influence of the proposed mine.  The Funds will be in addition to the share
of revenues that these communities will receive from taxes and royalties paid by
the Company and remitted to them by the National and Provincial governments once
the mine comes into production.



The $80 million for these Funds will be accumulated progressively, starting
immediately upon acceptance of the proposed offer by the communities, and
augmented at various stages during project development and over the projected 20
year life of the Project. Each of the two peasant communities (Yanta and Secunda
y Cajas) located within the area of influence of the proposed mine site, will
have its own US$ 40 million Fund, which will be used for community projects of
their choice. The funds will be managed by a recognized financial entity in
Peru, specifically regulated by Peruvian legislation for this task. The
beneficiary of each Fund will be a non-profit entity created for each community,
with its own management and a non-voting Advisory Board, composed of a
non-governmental entity, financial and legal advisors and representatives from
the local and national governments. This is an innovative legal structure which
aims to facilitate the involvement of the community and the development of
community selected projects.



To meet the initial financial requirements for these Funds, Monterrico has
entered into a loan facility agreement (the "Loan Facility") with Xiamen Zijin
Tongguan Investment Development Co., Ltd ("Zijin Consortium"), the majority
shareholder of the Company.  The Loan Facility is for an aggregate amount of up
to US$6 million at an interest rate of not greater than 1 per cent above LIBOR,
as published by the British Bankers Association (BBA). Additional finance for
these Funds will be met from shareholder loans, other forms of financing and
profits from the mining operation. The total for these two Funds is capped at
U$80 million.



The Loan Facility constitutes a related party transaction for the purposes of
the AIM Rules. The Directors of Monterrico (other than Shan Shan (Susan) Li,
Wenzhou Huang and Xiaodong Huang who are also directors of the Zijin Consortium,
and Guobin Hu, who is General Manager of Zijin Consortium) consider, after
having consulted with Monterrico's nominated adviser, Ambrian Partners, that the
terms of the Loan Facility are fair and reasonable insofar as the Company's
shareholders are concerned.



Richard Ralph, Non-Executive Chairman of Monterrico Metals, commented: "I am
delighted to announce the proposal of these Funds. This initiative is part of
our pro-active Social Programme which is designed to achieve Sustainable
Development of this very poor area of Peru and to generate amicable and mutually
productive working relationships with the local communities".



Ends



For further information, please contact:



Monterrico Metals plc                                     Tel: + 44 20 7776 2900
Richard Ralph, Non-Executive Chairman
Susan Connolly, Investor Relations Manager

Ambrian Partners                                          Tel: + 44 20 7776 6421
Tim Goodman

Parkgreen Communications Limited                          Tel: + 44 20 7851 7480
Simon Robinson/Beth Harris/Laura Llewelyn




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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