Wednesday, 13 June 2012

Montero Mining says latest trench results from Nyati confirm continuity of rare earth mineralization

Montero Mining and Exploration (CVE:MON) unveiled Wednesday what it called positive results from four additional surface trenches on the Lower Nyati target at its Wigu Hill rare earth project in Tanzania.
The target lies upslope from the Tubili target area at the site. The company said the trench results from Lower Nyati "substantiate" the results reported from the area earlier this year.
Highlights of the wide trench intersections included 2.24% total rarth earth oxides (TREO) over 112.4 metres in trench WTRN004, including 3.92% TREO over 14 metres and 3.65% TREO over 16 metres.
In addition, trench WTRN006 returned 3.04% TREO over 42.0 metres, including 3.8% TREO over 20 metres, and trench WTRN007 intersected 3.11% TREO over 44.0 metres, including 4.31% TREO over 14 metres.
Montero said these latest trench results continue to confirm the extent of the mineralization on the Lower Nyati target, and validate the high grade TREO values returned from the grab and panel sampling program, as well as from initial trenching and drilling results.

"The latest trenching results from the Lower Nyati Target confirm the continuity of mineralization and strengthens our confidence in that further drilling at the Nyati targets should increase the resource substantially," said Montero president and CEO, Dr. Tony Harwood, in a statement.

"Montero remains focused on de-risking the project to support the fast-track to market strategy while seeking non-equity funding via off-take or strategic partnerships.”

The company said its exploration undertaken to date has covered less than half of the anomalous area of rare earth interest.

And despite this, drilling and trenching have already identified an extensive zone of carbonatite-hosted bastnaesite-rich mineralization, with upside potential present.

Exploration will continue on the mineralized cabonatites zones identified at Lower Nyati, as well as their continuation to the north and west.

Further excavations are necessary, the company said, to follow up on the "encouraging" trench results. These results, together with previous trench and drill hole information, provide additional evidence on which to base a diamond drill exploration program to establish a resource at the target.

In early April, Montero announced the results from 1,030 metres of drilling at the Lower Nyati target,with highlights including boreholes NYT001 and NYT005, with NYT001 returning 3.01% TREO over 62.5 metres and NYT005 intersecting 3.13% TREO over 31.8 metres.

The company's flagship Wigu Hill property was first identified in the 1950’s as a high grade rare earth deposit recorded by the USGS, 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 in the US as the rare earth elements at the deposit are hosted in the mineral bastnaesite, found in carbonatite dikes.

Montero continues to de-risk its main project as part of its fast-track to production strategy.

Indeed, through hydro-metallurgical test work with consultants Mintek, Montero said in March that it produced the first samples of concentrated rare earth chemical grade products from its Wigu Hill project, with a tested process route now in place.

The making of not only Mixed Rare Earth, but also Cerium chemical products was a major milestone for the company, as it allows Montero to show indicative product when in discussions with potential off-take partners.

The accomplishment indeed proved beneficial, as these samples were instrumental in a non-binding off-take agreement signed with Star Earth Minerals in April, for the supply of light rare earths from its Wigu Hill project.

In the first phase of production from Wigu Hill, Montero is targeting output of 5,000 tonnes of mixed rare earth product per year, with Star Earth having the appetite for around 1,000 to 3,000 tonnes.

Last September, the company released a 3.3 million tonne inferred resource based on 2,225m of shallow drilling on only a fraction of the Wigu Hill complex. Only the Tembo and Twiga zones 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) with a higher grade portion of 510,000 tonnes at 4.4% LREO.

The company is initially targeting cash flow from a small mining operation at the Twiga Zone by 2013, while drilling on the remainder of the property and proving up a greater resource.

An updated NI 43-101 compliant resource estimate is on track, which will look to boost inferred resources to the measured and indicated category. A preliminary economic assessment will then follow, along with a feasibility study later in the year.

Rare 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 and X-ray machines, mobile devices and other computing equipment.

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