Monto Minerals Ltd (ASX:MOO) 29 AUGUST 2008
Monto Minerals Limited ('Monto' or 'the Company')
APPOINTMENT OF VOLUNTARY ADMINISTRATORS
The Board of Directors of Monto Minerals Limited has appointed Ian
Hall and David McEvoy of PricewaterhouseCoopers as Administrator of
the Company effective immediately.
Directors took that action following a detailed review of the
Company's Goondicum Industrial Minerals Project. That review was
undertaken to determine the future of the operation, and included the
identification of the project's limiting factors and how they might
be overcome in order to achieve an acceptable return, the potential
expansion of processing capacity and the additional funding
The project, which commenced production in October 2007, has not
reached the production targets for Stage 1 despite actions taken to
improve plant availability and production rates.
The key findings of the detailed review were:
* 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.
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.
* 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
The Company raised approximately $5 million in June 2008 in a
placement to institutional investors, an amount which the Company
considered sufficient to enable the operation to continue for not
less than three months while the review was being undertaken.
Having considered the outcome of the detailed review; investigated
funding options for the likely capital and operating requirements of
the company; and taken account of the current and forecast cash
position of the Company, Directors concluded that the appointment of
an Administrator was in the best interests of shareholders and other
Mr Ian Hall +61 (7) 3257 5000
Richard Brown, Ambrian Partners Limited - +44 (0) 20 7634 4700
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Monto Minerals Ltd
Stock Identifier: AIMX.MON