Chairman's address to AGM

RNS Number:7206L
Monto Minerals Ltd
07 November 2006





8 November 2006



CHAIRMAN'S ADDRESS - ANNUAL GENERAL MEETING



The past year has been a successful one for your company. Importantly,
construction of the Goondicum multi-product industrial minerals project is now
under way and commercial production is now scheduled for the middle of next
year.

Site works at Goondicum began in earnest in August this year following a
successful fund raising on London's Alternative Investment Market in May.

The admission on AIM raised nearly GBP16.8 million (A$40 million net of fees and
costs) for the development of Goondicum.

Prior to the admission on AIM, Monto entered into an agreement with the highly
regarded Sentient Group, managers of two Global Resource Funds focussed
exclusively on mining industry investment.  Sentient's participation both as a
shareholder in Monto and as a direct investor in the Goondicum project has been
pivotal and was a catalyst for the successful outcome in London.

Site clearing and earth works for the processing plant site and initial tailings
facility have been completed and pouring of the concrete foundations at the
processing plant and mineral stockpile area will commence this week.

While the broader mining industry is facing widespread cost increases caused by
the resources boom, we have been able to contain construction costs for the
Goondicum project by negotiating a fixed price EPCM contract with R.J. Robbins
and Associates.  Under the contract Robbins will provide engineering,
procurement, construction, management and commissioning services to the project.
  The contract includes a bonus/penalty arrangement as an incentive for project
completion on time and within budget.

Construction at Goondicum is scheduled to be completed in April next year
followed by commissioning which is scheduled to be completed in May subject to
the availability of sufficient water from either the SunWater pipeline by that
time or rainwater from the tailings dam.  Given a reasonable wet season there
may be sufficient water available on site to commence commissioning prior to
completion of the pipeline.

The Queensland Government's SunWater has agreed to build, own and operate a 35km
pipeline to transport water to Goondicum from Monto's bores in the Mulgildie
Basin to the west of Monto.

As we have reported previously, the company has been negotiating financial
guarantees for the water and power infrastructure and we expect to have them
finalised in the next six weeks.  We expect to cover the $15 million in bank
guarantees with interim finance facilities to carry us through until production
is established when the guarantees can be secured against the project.


We have now decided to build the feldspar washing plant at Dakiel, 25 km from
Goondicum, rather than at the port of Gladstone.  The new location of the plant,
which will upgrade the project's feldspar to a high quality, low iron product,
is expected to provide operating advantages.  It will be situated at the rail
loading facility for direct haulage to Gladstone where the project's products
will be exported.  The Monto Shire Council has already commenced upgrade of the
road connecting Goondicum and Dakiel.

Let me remind shareholders that we have based the commercial development of the
Goondicum deposit on the sale of the multiple products that the project is
capable of producing - feldspar for use in glass making and as an industrial
abrasive and most recently in higher value, finely ground form with potential in
paint manufacture; ilmenite for manufacturing white pigment used in paint, paper
and plastics; and apatite as fertiliser.

A fourth mineral, titanomagnetite is scheduled for full scale testing later this
year as a coal washing agent in a commercial plant.  This follows successful
pilot testing earlier this year.  Sales of titanomagnetite would add materially
to the project's already robust economics.

As reported in this year's Annual Report, we have off-take agreements in place
for approximately 45% of the first year's planned production of ilmenite,
apatite and feldspar, with a similar tonnage committed for the second year.
This rises to 55-60% if initial estimated sales of titanomagnetite are secured.

Since the May fund raising, Monto has revisited all parties who had provided
conditional purchase commitments and they have confirmed their intentions to
sign off-take agreements in due course.

The immediate focus in the marketing of feldspar for glassmaking is being
directed to domestic and New Zealand customers since escalating international
shipping rates and unfavourable foreign currency exchange rates have added
significantly to costs for sales to Europe and affected our current
competitiveness there for a number of potential customers.

However, further marketing opportunities for Goondicum's ground feldspar have
been identified in Europe and USA together with potential ilmenite markets in
Japan and Europe.  Commercial testing and evaluation of ground feldspar are
continuing in the UK with encouraging results, and, because this is a high value
product, the logistics and costs of delivering it to markets in Europe and the
USA are less influenced by exchange rate and shipping costs.

We continue to seek additional markets for Goondicum's high quality products and
this year further bulk samples of feldspar, apatite and titanomagnetite products
were produced for commercial trials by potential customers.

In-situ mineral resources at Goondicum were increased during the year.  The
project's Inferred Resource of feldspar and apatite increased by 38 million
tonnes to 55 million tonnes containing an estimated 6.9 million tonnes of
feldspar and 1.1 million tonnes of apatite.  The increase followed a review
undertaken as part of extensive due diligence and independent expert studies to
meet the requirements of the AIM listing, and confirms the Goondicum deposit as
capable of sustaining a long life project of more than 25 years.

Our focus has been on delivering value to shareholders by bringing the Mount
Goondicum Project to production.  This will continue until we have achieved our
targets. We have not, however, ignored our other resources at Eulogie Park where
we have parties interested in the hard rock magnetite resources.

In July this year we announced that the management team to take us into
commercial production was in place with the appointment of experienced mining
executive Gayle Brown as Monto's Chief Financial Officer.

Following the company's admission on AIM the board of Monto was strengthened
with the appointment of two additional UK-based non-executive directors - Mr
Philip Holbeche and Mr Peter Freeman.  Both have excellent financial and
minerals industry experience and credentials and offer themselves for election
at this Annual General Meeting.

Ladies and gentlemen, your company will soon take its place among the industrial
minerals producers of the world.  Project finance has been raised with the
admission to AIM, a step that, despite current share price weakness, can be
expected to benefit Monto shareholders over the longer term through exposure to
a broader market and greater international recognition of the value of its
multiple industrial minerals products.  The company has a complete management
team, ably led by Managing Director Geoff Moore and fully capable of taking the
Goondicum project to fruition.

In these circumstances, I stood aside as an executive of the company in August
this year.  Subject to continuing shareholder support, I have undertaken to
remain as non-executive Chairman for a period of three years following the AIM
admission in May this year.  Geoff has also undertaken to commit to the Company
for a similar period of time.

With the development of the Goondicum industrial minerals project now
progressing I look forward to reporting to you on the successful commencement of
commercial production at next year's AGM.  Thank you for your on-going support.


Enquiries to:

Geoffrey Moore 
Monto Minerals Ltd        [phone]
 
Richard Brown 
Ambrian Partners Limited       020 7776 6400 







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