MONO Monto Options

RNS Number:1345L
Monto Minerals Ltd
27 October 2006



27 October 2006

LSE ANNOUNCEMENT

             FIRST QUARTER ACTIVITIES AND CASHFLOW REPORT 2006/2007
                     FOR THREE MONTHS TO 30 SEPTEMBER 2006


COUNTDOWN TO PRODUCTION......


      Construction commenced at the Goondicum Industrial Minerals Project


*    Site works commenced at Goondicum

*    Fixed price EPCM contract agreed

*    Trial plant production of additional bulk samples for commercial testing 
     completed

*    In October - Water Transport Agreement signed and water licence granted


Construction of Monto Minerals' $50 million industrial minerals project
commenced during the quarter at Goondicum near Monto in central Queensland.

Earthmoving equipment moved on to the Goondicum site in August and commenced
site works including land clearing and earth works for the plant site and
tailings facility.  The project comprises an open cut mine and processing plant.

R.J. Robbins & Associates (Robbins) will provide engineering, procurement,
construction management and commissioning services to the project under a fixed
price EPCM contract.  The contract includes bonus/penalty arrangements as an
incentive for project completion on time (April 2007) and within budget ($39
million).  Roads, tailings dam and working capital comprise the remainder of the
estimated $50 million project cost.

In October, Monto entered into a Water Transport Agreement with the Queensland
Government's SunWater for the transport of water to the Goondicum Project, and
the necessary water licence was approved.  Under the Agreement, SunWater will
build, own and operate a 35km pipeline to transport water to the Goondicum
project from Monto's bores in the Mulgildie Basin to the west of Monto.  A
cultural heritage survey of routes for power, water and access road to the
Goondicum mine site has been completed as a precursor to construction or upgrade
of these services.


Dakiel feldspar wash plant

An Environmental Authority for the Dakiel feldspar plant and rail loading
facility was granted in October and a Plan of Operations for the site has been
completed.  Approval of the Plan of Operations is expected in the December
quarter.

The Monto Shire Council has commenced the upgrade of the road connecting
Goondicum and the Dakiel plant.  Initial clearing has been completed and
drainage works commenced.


Trial Plant Activity

Operation of the trial processing plant at Goondicum ceased during the quarter
once the production of bulk samples for commercial testing had been concluded.

Production of a 50-tonne bulk sample of titanomagnetite was completed.  Initial
pilot scale trials have demonstrated that the titanomagnetite product could be
used to effectively wash coal. The sample will be used in full scale testing as
a coal washing agent in a commercial plant later this year.  Goondicum is close
to Queensland's premier coal mining region where there are significant potential
customers.  The plant also produced a 5-tonne sample of apatite for further
customer trials in the manufacture of organic fertiliser.

The trial plant has now been placed on care-and-maintenance.

Marketing Progress

Commercial development of the Goondicum deposit is based on the sale of the
project's multiple products.  Marketing continued during the quarter on each of
the product streams - feldspar for use in glass making, paint manufacture and as
an industrial abrasive; ilmenite for manufacturing white pigment used in paint,
paper and plastics; and apatite as fertiliser, with a fourth mineral,
titanomagnetite, now being tested as a coal washing agent.

Since completing the AIM listing in May of this year, Monto has revisited all
parties who had provided conditional purchase commitments and have confirmed
their intentions to sign off-take agreements in due course.

Further marketing opportunities for Goondicum's high value ground feldspar
product have been identified in Europe and USA together with potential ilmenite
markets in Japan and Europe.

Commercial testing and evaluation of ground feldspar are continuing in the UK
with encouraging progress. Testwork is due for completion by the end of 2006.
Investigations will continue into logistics and costs for delivering ground
feldspar to markets in Europe and the USA.


Outlook

Commercial production and supply of the project's various industrial minerals
are scheduled to commence by the middle of next year.

Planned project activities for the December quarter:

* Concrete works for the Goondicum processing plant are expected to be
  completed

* Construction works at the Dakiel feldspar wash plant to commence following
  approval of the site Plan of Operations

* Commencement of full scale testing of the Goondicum titanomagnetite product
  as a coal washing agent in a commercial plant.


Paste the following link into your web browser to download the PDF document 
related to this announcement: 

http://www.rns-pdf.londonstockexchange.com/rns/1345l_-2006-10-27.pdf

Enquiries to:

Geoffrey Moore 

Monto Minerals Ltd         +61 (0)7 3034 3100
 
Richard Brown 

Ambrian Partners Limited   020 7776 6400 


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

END
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