Montero Mining to acquire four phosphate projects in South Africa

Montero Mining and Exploration (CVE:MON) announced Friday that it has chosen to complete the acquisition of four phosphate exploration projects in South Africa, subject to regulatory approvals.
In October last year, the company's subsidiary inked a binding term sheet agreement, providing for the right to acquire Eurozone Investments, which hold interests in four phosphate exploration projects in South Africa. Montero paid $100,000 to the vendor in consideration for receiving an exclusivity period to conduct due diligence.
The purchase price for the assets is 2.5 million shares of Montero. In addition, Montero is required to complete an initial exploration program on one of the four projects, known as the Bierkraal project, within 18 months of closing, which includes drilling.
A further 1.0 million shares of Montero will be issued within the same time frame if Montero delivers a NI 43-101 report identifying a phosphate resource on all or part of the Bierkraal project, or if Montero otherwise chooses to maintain the project.
Upon closing, Montero will have 100% ownership of the other three projects and there is no further obligation to the vendor with respect to those projects after closing, the company said. Aside from Bierkraal, the assets cover the Duyker Eiland property, Phillips Kraal and Lamberts Bay in the Western Cape.
"We are very pleased to have extended the option period for the acquisition of the Phosco assets as it has provided time to complete the due diligence on the projects," said Montero president and CEO, Dr. Tony Harwood.
"We believe that the Phosco assets have the potential to be mineable resources and would be a great asset to the Montero portfolio. We look to create maximum value for shareholders through the acquisition and exploration of properties with huge potential and continue to strive to generate value through development at our flagship Wigu Hill Rare Earth Project in Tanzania as we focus on bringing this into production.”
Due diligence comprised the compilation of historic data, desktop studies, field visits, mapping and drilling. The results of a drilling program with assays and preliminary metallurgical testing from Duyker Eiland and Phillips Kraal is being compiled into an NI 43-101 technical report by AMEC Earth and Environmental, which is expected shortly, Montero said.
Montero Mining is primarily focused on rare earth elements (REE), phosphates and uranium in Tanzania, South Africa and Quebec, Canada, respectively. The company's flagship Wigu Hill Rare Earth Element Project in Tanzania is a high-grade, undeveloped light rare earth deposit, which hosts NI 43-101 compliant inferred resources of 3.3 million tonnes, on only a fraction of the deposit.