Press Release: Montero Mining and Exploration Ltd. – 19 hours ago
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TORONTO, ONTARIO–(Marketwire -02/28/12)- Montero Mining and Exploration Ltd. (TSX-V: MON.V –News) (“Montero”) announces the results of an initial NI 43-101 compliant Preliminary Economic Assessment (“PEA”) of its sedimentary phosphate Duyker Eiland Project located 30 kilometers north of the Port of Saldanha, in the Western Cape Province of South Africa.
The PEA is based on an initial Inferred Mineral Resource of 32.8 million tonnes, grading at 7.15% P2O5, as previously reported following an independent resource estimate prepared by AMEC Earth & Environmental (UK) Limited. Preliminary metallurgical test work indicated that an acid-grade phosphate concentrate of 33% P2O5to 35% P2O5 (72.1% BPL to 76.5% BPL) can be produced by flotation. (See News Release dated 14/12/2011). The independent PEA was conducted by Turgis Consulting (Pty) Ltd. (Turgis) who will also submit the NI 43-101 compliant report on SEDAR within 45 days. The PEA is preliminary in nature as it includes Inferred Mineral Resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as “Mineral Reserves”. There is no certainty that the PEA will be realized as Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Dr. Tony Harwood, President and Chief Executive Officer of Montero commented, “We are pleased the results of the PEA on the initial Inferred NI 43-101 Mineral Resource at Duyker Eiland has returned such robust economics with a NPV of CAD$ 150 million with a 10% discount rate. Montero is in discussions with a number of parties interested in commercializing our phosphate assets. Montero remains committed to establishing early production on our flagship Wigu Hill Rare-Earth Project in Tanzania while seeking partners to develop our phosphate assets.”
Highlights of the PEA
-- A NPV of CAD$ 150 million (at a discount rate of 10%) and an IRR of 41%
-- Average 4.5 million tonnes per annum rock mined at low stripping ratios
of 0.57:1
-- Average production of 490,000 tonnes per annum of 33% P2O5concentrate
-- 11 year Life of Mine (based on initial resource estimate)
-- Operating cash costs CAD$ 99 per tonne concentrate Free alongside Ship
("FAS") Port of Saldanha, South Africa
-- Capital costs of CAD$ 129 million
-- Opportunities to increase value of project through production of
fertilizers
Summary of the Project Economics
The PEA indicates that the project is expected to generate robust financial returns. All figures are presented pre-tax and before South African royalty deductions. All costs were estimated locally in South African Rand (ZAR) and converted to Canadian Dollars (CAD$) for reporting purposes. The average exchange rate for CAD/ZAR is based on a 12 month average from 01/02/11 to 31/01/12 (source: historical interbank rate at www.oanda.com). All revenues were estimated in USD and converted to ZAR. The average exchange rate for USD/ZAR is based on a 12 month average from 01/02/11 to 31/01/12 (source: historical interbank rate at www.oanda.com). The results and assumptions for the economic analysis are as follows:
