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Montero produces samples of RE saleable products from Wigu Hill

Last updated: 12:50 05 Mar 2012 EST, First published: 13:50 05 Mar 2012 EST

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Montero Mining and Exploration (CVE:MON) said Monday it has produced the first samples of concentrated rare earth chemical grade products from its Wigu Hill project in Tanzania.

The company said it believes it is one of the first companies to be able to produce samples of saleable rare earth products, which shows it is serious about securing an offtake agreement.

"The production of samples of Mixed Rare Earth and Cerium chemical products for marketing purposes is a major milestone as it will enable Montero to enter into advance discussions with off-take partners able to assist in the financing of mine and refinery operations," said president and CEO, Tony Harwood.

"Advancing the hydro-metallurgical flowsheet established by Montero and Mintek puts us on track to de-risk the project and is a significant milestone in achieving early production from the Wigu Hill Project.”

The products produced included a mixed rare earth carbonate, oxalate and hydroxide and importantly, an individual cerium hydroxide product. The products were generated from bastnaesite-rich carbonatite material at Wigu Hill.

The cerium hydroxide was produced using standard chemical separation processes and Montero said "it may be possible to further upgrade the product specification for additional sales value add". 

The news today gives Montero a viable hydrometallurgical process route to produce "high value" rare earth chemical products for potential sale from Wigu Hill.  

The “up-front” recovery of cerium from the leach plant solutions is expected to simplify the down-stream refining process and potentially reduce the refinery capital and operating costs, the company said. Further investigation with Mintek into the production of other value-added products is on-going, the company added, including the extraction of a potentially saleable strontium chemical product.

Strontium was determined as being of potential economic importance once it was found that the mineral could be leached into solution during acid leach testwork done by Mintek, South Africa's national mineral research organization and the company's research provider.

The samples of the saleable rare earths products were produced as Montero completed the third phase of hydro-metallurgical testwork by Mintek. The aim was to consider the design efficiencies of a multiple leach process and to produce a mixed rare earth product for assessment by potential off-take partners.

This process design has now been successfully tested on both a laboratory and bulk scale, Montero said.

The company also said it is undertaking discussions with interested off-take groups and customers in Asia, Europe, the Middle East, and the Americas.

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.

Rare earth elements, a group of 15 metals, 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.
 
Montero 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).

Montero is focused on upgrading the resource, and has hired Turgis Consulting to perform a scoping study on the property, due out in the first half of this year.

Last month, the company said that rare earth dike mineralization from its flagship property was proven to be amenable to upgrading by X-Ray sorting, with over 80 percent recovery.

Hydrometallurgical testwork also continues to advance with Mintek, including further optimization tests and development work to enhance the work to date and generate high purity rare earth products for sale.

A report on the results of the Stage 1 refinery Ttstwork, which includes results on leaching tests completed to date, is expected in the second quarter.

This report will provide sufficient data to form the design basis for a pre-feasibility study, Montero concluded.

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