Monto Minerals - December 2000

REPORT ON ACTIVITY FOR THE QUARTER ENDED 31 DECEMBER 2000

OVERVIEW

PROJECT FUNDING

Monto Minerals and Multiplex Constructions have extended the Heads of Agreement to 4 March 2001.

GOONDICUM CRATER ILMENITE AND TITANO-MAGNETITE PROJECT

Plagioclase feldspar analysis indicates suitability for glass industry.
Major plagioclase feldspar consumer confirms analysis.
Land owners, including the Monto Shire Council, sign "in principle" agreements regarding water pipeline access.
Rehabilitation of pilot plant area proceeding well.

MARKETING

Ilmenite concentrates (minimum 54% TiO2 FOB Australia) continued to rise from $140 - $165 in June 2000 to about $155 - $200 in December 2000. Goondicum Ilmenite is in the 49% - 50% TiO2 range.
Certain grades of feldspar used in the ceramics and glass industry increased in price in the U.S.A. late in 2000.

METALLURGICAL PROGRAM

The Metallurgical Program completed in the fourth quarter of 2000 is being reviewed and refined at present. Flowsheets for ilmenite, titano-magnetite, apatite and plagioclase feldspar have been produced.

WATER SUPPLY ASSESSMENT

A report on the water supply from the Mulgildie Basin has been submitted to the relevant authority.

All stakeholders in the proposed route for the water supply pipeline have now signed "in principle" agreements. These stakeholders are three private landowners and the Monto Shire Council.

RESTORATION AND REHABILITATION TRIALS

The restoration and rehabilitation of the pilot plant area is being monitored on a regular basis. Natural regrowth of native grasses on the pit surface and surrounds has been substantial. Experimental plots within the pit will be used to test a variety of selected grasses for pasture development.

Volume and strength measurements to monitor the consolidation of the restored area are performed on a regular basis.

ADDITIONAL PRODUCTS

Confirmation of the analysis of the plagioclase feldspar has been provided by a major consumer. Controlled plant trials are now required to prove the suitability of the plagioclase feldspar for glass production.

Discussions are continuing with potential purchasers of Goondicum apatite following satisfactory tests at a fertilizer plant.

MARKETING

Ilmenite prices have increased substantially over the last half of 2000. The current price range quoted from London is US$85 to US$110 per tonne FOB Australia for ilmenite with a minimum TiO2 content of 54%.

Interest in Goondicum apatite remains strong and negotiations are proceeding regarding a long term arrangement for the sale of this product.

The application of Goondicum plagioclase feldspar to fertilizer production is being investigated by one of the fertilizer producers.

MULTIPLEX/MONTO MINERALS HEADS OF AGREEMENT

Monto Minerals and Multiplex Constructions have agreed to extend the Heads of Agreement to expire on 4 March 2001 to allow sufficient time for various contractors to complete their investigations regarding the capital and operating expenditure estimates for the Goondicum Crater Ilmenite and Titano-magnetite Project.

By Order of the Board

L G JOHNSON (F. Aus.I.M.M.)

Managing Director

31 January 2001

Information in this report insofar as it relates to ore or mineralisation is based on information compiled by Mr L G Johnson, a full-time employee of the Company, who is a Corporate Member of the Australasian Institute of Mining and Metallurgy and who has a minimum of five years experience in the field of activity being reported on.

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98.

Name of entity

MONTO MINERALS N.L.

ACN or ARBN

Quarter ended ("current quarter")

063 144 865

31 DECEMBER 2000

Consolidated statement of cash flows

Cash flows related to operating activities		Current quarter $A’000	Year to date (6 months) $A’000
1.1	Receipts from product sales and related debtors
1.2	Payments for (a) exploration and evaluation Payments for (b) development Payments for (c) production Payments for (d) administration	(432) (151)	(881) (254)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	12	34
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)		11
	Net Operating Cash Flows	(571)	(1090)
a	Cash flows related to investing activities	a	a
1.8	Payment for purchases of: (a) prospects Payment for purchases of: (b)equity investments Payment for purchases of: (c) other fixed assets
1.9	Proceeds from sale of: (a) prospects Proceeds from sale of: (b) equity investments Proceeds from sale of: (c) other fixed assets
1.10	Loans to other entities
1.11	Loans repaid by other entities
1.12	Other (provide details if material)
	Net investing cash flows	0	0
1.13	Total operating and investing cash flows (carried forward)	(571)	(1090)
1.13	Total operating and investing cash flows (brought forward)	(571)	(1090)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other (provide details if material) - Capital Raising Costs
	Net financing cash flows	0	0
	Net increase (decrease) in cash held	(571)	(1090)
1.20	Cash at beginning of quarter/year to date	896	1,415
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	325	325

Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities

		Current quarter $A’000
1.23	Aggregate amount of payments to the parties included in item 1.2	152
1.24	Aggregate amount of loans to the parties included in item 1.10	Nil

1.25	Explanation necessary for an understanding of the transactions

Refer attached note

Non-cash financing and investing activities

2.1	Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

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2.2	Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

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Financing facilities available
Add notes as necessary for an understanding of the position.

		Amount available $A’000	Amount used $A’000
3.1	Loan facilities	Nil	Nil
3.2	Credit standby arrangements	Nil	Nil

Estimated cash outflows for next quarter

		$A’000
4.1	Exploration and evaluation	10
4.2	Development	Nil
a	Total	10

Reconciliation of cash

	Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1	Cash on hand and at bank	(1)	16
5.2	Deposits at call	326	880
5.3	Bank overdraft		0
5.4	Other (provide details)		0
a	Total: cash at end of quarter (item 1.22)	325	896

Changes in interests in mining tenements

		Tenement reference	Nature of interest (note (2))	Interest at beginning of quarter	Interest at end of quarter
6.1	Interests in mining tenements relinquished, reduced or lapsed	Nil	Nil	Nil	Nil
6.2	Interests in mining tenements acquired or increased	Nil	Nil	Nil	Nil

Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1	Preference +securities (description)	Nil	Nil	Nil	Nil
7.2	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions	Nil	Nil	Nil	Nil
7.3	+Ordinary securities	107,379,028	107,379,028	a	a
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	Nil	Nil	a	a
7.5	+Convertible debt securities (description)	Nil	Nil	Nil	Nil
7.6	Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	Nil Nil	Nil Nil	Nil Nil	Nil Nil
7.7	Options (description and conversion factor)	600,000	Nil	Exercise price 6.7 cents	Expiry date 31/12/2001
7.8	Issued during quarter	Nil	Nil	Nil	Nil
7.9	Exercised during quarter	Nil	Nil	Nil	Nil
7.10	Expired during quarter	150,000	Nil	20 Cents	18/12/2000
7.11	Debentures (totals only)	Nil	Nil
7.12	Unsecured notes (totals only)	Nil	Nil	a	a

Compliance statement

1	This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Law or other standards acceptable to ASX (see note 4).
2	This statement does /~~does not~~* (delete one) give a true and fair view of the matters disclosed.

Sign here: .............................................................................. Date: ............................
(Director/Company secretary)

Print name: .............................................................................

Notes

1	The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2	The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3	Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
4	The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report.
5	Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

Appendix 5B - Notes