Monto Minerals Ltd (ASX:MOO) Monto Minerals Limited ('Monto' or 'the Company')

          Goondicum Project Operating and Financing Update

The Board of Monto Minerals  Limited today announces its  conclusions
following a  detailed review  of the  Company's Goondicum  Industrial
Minerals Project (the 'Project').

The Project, which  commenced production  in October  2007 has  since
that time  fallen well  below targeted  Stage 1  production  targets,
culminating  in  an  increase   in  the  Company's  working   capital
requirements and the need for the Company to raise interim funding of
A$5 million via the issue of  new ordinary shares as announced on  16
June 2008.

That funding  was raised  to enable  the Company  sufficient time  to
conduct a  detailed investigation  into  how the  Project's  limiting
factors might be overcome in  order to achieve an acceptable  return;
the viability of the Company's  longer term expansion plans; and  the
Company's likely additional funding requirements.

The key findings of the investigation included the following:

*          While a number of actions have been taken with the aim of
  improving plant availability and production rates, these actions
  have been unsuccessful in achieving a significant increase in
  production which remains well below the target set for Phase 1.

*          A number of significant flaws in the design of the
  Project's feed preparation area have been identified and it is
  believed that these issues are the primary cause for the Project's
  poor operating performance to date.

*          The feed preparation area is currently only capable of
  delivering to the remainder of the plant around half of the
  material required to achieve the Phase 1 production target.

*          The Company's mining and processing activities at current
  levels of production are loss making and are likely to remain
  uneconomic unless the Phase 2 production rate target, which is
  double the Phase 1 production rate target, can be achieved
  following an expansion.

*          To achieve an economically viable level of production, a
  redesign of the Project's feed preparation area is required as part
  of a Phase 2 expansion.

*          While further work by third party consultants is required
  to determine the cost of a Phase 2 expansion and associated
  redesign of the feed preparation area to an appropriate level of
  accuracy, current estimates are that capital costs and working
  capital requirements would exceed A$30 million.

*          The economic returns of the Project are sensitive to a
  number of factors including forward looking selling prices,
  exchange rates and the level of demand for the Project's key
  products, and in particular, the demand for the Company's Feldspar

Having reached the conclusions set out above, the Board is  concerned
that it might  not be possible  to fund the  capital expenditure  and
working capital required to achieve a Phase 2 expansion and  redesign
of the feed preparation area through the equity capital markets.

The  Company  currently  has  limited   cash  resources  and  is   in
discussions with a limited number of potential strategic investors to
meet its funding requirements. Those discussions will be finalised by
Friday 29 August 2008  at which time the  market will be informed  of
their outcome.

If interim funding is  not secured by Friday  29 August 2008 then  in
order to protect the interests of shareholders and other stakeholders
as  a  whole,  the  Board  may  place  the  Company  into   voluntary
administration. This  would  allow  the Company  to  explore  further
funding and sale opportunities  whilst also managing its  obligations
to creditors.

Trading in the Company's ordinary shares has today been suspended  on
the AIM Market of the London Stock Exchange with immediate  effected.
Trading in the Company's ordinary shares was today also halted on the


Peter Slaughter, Non-Executive Chairman - +61 407 803 354

Richard Brown, Ambrian Partners Limited - +44 (0) 20 7634 4700


Monto Minerals Ltd

ISIN: AU000000MOO0

Stock Identifier: AIMX.MON

Related Companies

Shareroot Ltd             

ABN Newswire This Page Viewed:  (Last 7 Days: 7) (Last 30 Days: 24) (Since Published: 3684)