Montero Mining and Exploration (CVE:MON) said Thursday that it has hired an advisor to assist in the sale process of its phosphate assets, namely the Duyker Eiland, Phillips Kraal and Lamberts Bay projects, in South Africa.
The company hired AltaCorp Capital to help in the process, which the
company has launched in an effort to focus on its flagship Wigu Hill
rare earth project in Tanzania.
“The potential sale of the phosphate assets will allow the company to
focus on our flagship Wigu Hill Rare Earth Project in Tanzania as we
de-risk the project to demonstrate potential rare earth production in
the near term," said president and CEO, Dr. Tony Harwood.
proceeds from the proposed sale of the phosphate assets will be used to
advance our rare earth strategy. We are confident that AltaCorp have the
necessary experience and contacts to potentially realize a
A preliminary economic assessment was recently completed for the Duyker Eiland project.
PEA report, conducted by Turgis Consulting, is based on an initial
inferred mineral resource of 32.8 million tonnes, grading 7.15% P2O5,
and shows average production of 490,000 tonnes per year of 33% P2O5
concentrate over an 11-year mine life.
The company said that an
average of 4.5 million tonnes of rock would be mined per year at low
stripping ratios of 0.57:1. As reported late last year, preliminary
metallurgical test work has also indicated that an acid-grade phosphate
concentrate of 33%to 35% P2O5 can be produced by flotation.
has agreed to pay AltaCorp a percentage of the transaction value if
such a transaction is completed by AltaCorp. Transactions can include
the sale of one or more assets, a merger, or one more more joint venture
"Montero does not intend to make further announcements
or disclose developments with respect to the transaction unless the
evaluation has been completed and the Board has approved a definitive
transaction and the company has entered into a definitive agreement," it
said in a statement.
Earlier this week, Montero said it inked a non-binding agreement
with Star Earth Minerals for the supply of light rare earths from its
Wigu Hill rare earth element project in Tanzania - a move that
significantly de-risks the property.
Star Earth Minerals is a
manufacturer of light rare earth compounds based in Mumbai, India, and
is seeking a consistent supply of light rare earths for its customers in
the glass, ceramic and catalyst industries, located mainly in South
East Asia and Japan.
The Wigu Hill property was first identified
in the 1950s as a high grade deposit, with a large carbonatite complex
measuring 6.4 by 3.2 kilometres. The asset has bastnaesite
mineralization and is considered a "look-a-like" to Molycorp's (NYSE:MCP)
Mountain Pass project. The rare earth elements at the deposit are
hosted in the mineral bastnaesite found in carbonatite dikes, making it
similar to Molycorp's Mountain Pass deposit in the USA.
earth elements are critical in the development of emerging green
technologies and high-tech applications, from electric and hybrid
vehicles and wind and hydro power turbines, to LCD screens, MRI, X-ray
machines, mobile devices and other computing equipment.
is working to update the initial NI 43-101 compliant resource estimate
for its Wigu Hill project this quarter, and is targeting cash flow from a
small mining operation at the Twiga Zone.
Last September, the
company released a 3.3 million tonne inferred resource on only a
fraction of the Wigu Hill complex. Only the Tembo and Twiga deposits on
the eastern side were estimated to contain an inferred resource of 3.3
million tonnes at a grade of 2.6% light rare earth oxide (LREO5).
from the in-fill drilling completed at the Twiga Zone will be used to
update the existing NI 43-101 resource estimate, which is expected
during the second quarter.
Under the terms of the memorandum of
understanding with Star Earth, within three months of entering into the
agreement, Star and Montero will sign an off-take agreement for 1,000 to
3,000 tonnes per year of mixed rare earth and cerium, subject to price
and product specifications.
Montero said the non-binding deal will remain in effect for 12 months, and either party can terminate the agreement at any time.