1st Quarter Activities & Cashflow Reports

29 October 2007 AIM ANNOUNCEMENT MONTO MINERALS LIMITED (the "Company") FIRST QUARTER ACTIVITIES AND CASHFLOW REPORT FOR THREE MONTHS TO 30 SEPTEMBER 2007 GOONDICUM INDUSTRIAL MINERALS PROJECT IN PRODUCTION * Construction completed at Goondicum * First production and sales delivery achieved October 2007 Construction of the processing plant at the Goondicum industrial minerals project in Queensland was completed during the September quarter. The final capital cost of the Goondicum plant and downstream Dakiel plant are expected to be within the original Project Budget of $38.5 million. The multi-product project has been developed to produce ilmenite (for paint, paper and plastic pigment), glass feldspar (for glass manufacture), ground feldspar (for paint and powder coating), apatite (for organic fertiliser) and titanomagnetite (for coal washing) for Australian and international markets. Production from the Goondicum plant commenced in mid-October and the first sales delivery, a consignment of apatite, was made last week. The project is now ramping up to full-scale production. Commissioning and production The final construction stages at Goondicum were completed during the quarter. Commissioning of the multi-stream processing plant continued throughout the quarter and into October, having entailed more modification and rectification work than anticipated. The feed preparation equipment has been augmented to improve the feed rate of ore entering the processing plant, resulting from vegetation and oversize material encountered in the initial mining area. The plant is now functioning satisfactorily for regular extended operating periods. The tonnage of ore being processed is being gradually increased towards full capacity and plant settings modified to suit the increasing throughput. Water is now being supplied as required for operations, and dams at Goondicum are being maintained at acceptable levels. The 35 km pipeline, developed and operated by the Queensland Government-owned corporation, SunWater, was previously the subject of supply interruptions caused by leaks during commissioning. Leaks in defective sections of pipes continue to be repaired as they are detected, with additional costs of rectification being met by the pipeline manufacturer. Construction continued throughout the quarter on the power line which will bring mains power to Goondicum. Mains supply is expected to be connected in November 2007, when two of the four interim diesel generators will be removed. It is proposed to remove the other two generators in January 2008 when the project's full power load is expected to be available via mains power. At Dakiel, 25 km by road from Goondicum, construction of the washing plant to upgrade the feldspar prior to sale is expected to be completed in November, a month later than previously expected due to a quality issue with steel fabrication. Sales and marketing There are now stockpiles of ilmenite, apatite, feldspar and titanomagnetite mineral concentrates at Goondicum. The first consignment of apatite was delivered to the fertiliser company, Ausmin Australia, on 23 October. Ausmin Australia has contracted to purchase all of the Goondicum project's production of apatite for fertiliser. Ausmin advises that it is progressing planning approvals to construct a phosphate fertiliser processing facility adjacent to the Dakiel Plant. This may result in some synergies and cost saving initiatives for both parties. Initial road haulage of ilmenite to the Port of Gladstone is expected to commence early in November and the first export shipment is likely before the end of the calendar year. With demand from pigment manufacturers at high levels for sulphateable ilmenite, a number of trial shipments are being scheduled for delivery in 2008 and the Company expects to contract all of its planned production of ilmenite. The supply of feldspar for domestic glass manufacture is expected to commence as soon as it can be upgraded in the new plant at Dakiel, now due for completion in November 2007. Titanomagnetite is being stockpiled for future grinding prior to supply for coal washing to the very large coal mining industry located nearby in central Queensland. Initial design for the proposed titanomagnetite refining and grinding plant at Goondicum has commenced. Funding As reported above, the capital cost of the Goondicum and Dakiel plants is expected to be delivered within budget of $38.5 million, a significant achievement in the current environment of increasing costs. The total project development cost, including cash-backed infrastructure guarantees and working capital requirements during the first year is forecast at $72 million. The $35 million fundraising approved by shareholders last May is taking the project through to full production. A further $6 million loan facility will provide for planned expansion to 2009. Board changes Mr Mark McCauley was appointed to the Board of the Company with effect from 25 September 2007. Mr McCauley is Managing Director of RMM Capital Pty Ltd, a Queensland-based private equity firm. A qualified mining engineer with a strong financial background, he worked for M.I.M. Holdings Limited and later as Chief Financial Officer of Felix Resources Limited during that company's period of substantial growth. Mr McCauley brings appropriate new experience to Monto as it moves into the full-scale commercial production phase. He has joined the Audit Committee. The resignation of Mr Peter Dowling AM from the Board of the Company as of 12 November, the date of the Company's Annual General Meeting, was also announced during the quarter. Mr Dowling is the Company's longest serving Director having been on the Board for eight years. An experienced accountant and professional company director, he made a significant contribution to the Company throughout the development of the Goondicum Project. Mr Dowling has agreed to remain on the Audit Committee until the 2008 Annual General Meeting and will chair the Audit Committee until a new Chairman is selected. Outlook The Goondicum project has now emerged from the development phase into commercial production and sales. The Company is looking forward to welcoming approximately 150 shareholders and other invited guests to the official opening ceremony on 12 November. Over the coming months, the Company expects production at Goondicum to move towards full design capacity. Deliveries of apatite will continue, and be despatched to Ausmin's Dakiel plant when it is ready to receive them in early 2008. Export sales of ilmenite and domestic sales of glass feldspar are expected to commence before year's end, the glass feldspar sales being contingent on the completion of the Dakiel upgrading plant now due in November 2007. Titanomagnetite production is scheduled for the first quarter of calendar 2008 subject to final decision to build a grinding plant at Goondicum. Transmission of mains power to Goondicum is due to commence in November 2007 upon completion of the power line. Following the achievement of full production within the initial project, the Company will move to implement the planned expansion in 2008/09. Enquiries to: +-----------------------------------------------+ | Geoffrey Moore | | |--------------------------+--------------------| | Monto Minerals Ltd | +61 (0)7 3034 3100 | |--------------------------+--------------------| | | | |--------------------------+--------------------| | Richard Brown | | |--------------------------+--------------------| | Ambrian Partners Limited | 020 7776 6400 | +-----------------------------------------------+ For further information on Monto Minerals please visit the Company's website at http://www.montominerals.com ---END OF MESSAGE---