Monto Minerals - March 2002

OVERVIEW

GOONDICUM CRATER PROJECT

The feasibility study has addressed all major aspects for the production of ilmenite and titano-magnetite.
Investigations into feldspar and apatite are continuing regarding production and marketing.
Capital Expenditure reduced by lowering throughput to 600 tonnes per hour from 900 tonnes per hour, as well as revised pipeline costs.
Water supply confirmed for 21 years - Life of Mine.
Memorandum of Understanding signed with CS Energy to expand opportunities for secure long term ilmenite market through value added processing.

GOONDICUM CRATER PROJECT

Development Strategy

As reported previously, the ilmenite production rate is now calculated to average 210,000 tpa with 80,000 tpa of titano-magnetite. As a consequence nameplate capacity of the wet plant consisting of gravity and magnetic separation equipment has been reduced from 900 tph to 600 tph enabling a twenty year life of mine.

Under the development strategy, the planned mining rate and ilmenite production for the first 8 years are as shown in the following table:

	YEAR
	1	2	3	4	5	6	7	8
Ore treated (million tonnes)	3.35	3.74	3.89	4.10	4.08	3.94	4.19	4.02
Ilmenite (thousand tonnes)	197	210	210	210	196	204	181	200

Bulk sampling programs produced a recovered grade of apatite and feldspar of 1.5% and 12% respectively. The actual production of these two products will be dependent upon market demand.

Intensive investigation of markets for these products is being undertaken. A feldspar marketing exercise is about to commence for the Asian area and discussions are underway regarding feldspar marketing and distribution in Europe.

Tailings Placement and Rehabilitation

A second round of tailings testing (at a reduced solids content, allowing for ease of pumping the tails from the wet plant to the rehabilitation cells) is underway. This has produced better than expected water recovery. The lucerne growth trials are continuing to establish the rate and depth of dewatering of the tails.

Water Supply

The most critical issue of water supply for the Goondicum Crater Project has now been resolved. The Department of Natural Resources and Mines have granted Water Bore Licence 74220M for 21 years, in conjunction with Water Bore Licences 7421M and 7422M. Each water bore has a nominal annual water allocation of 1,000 megalitres. This is sufficient for mining and processing planned for the Goondicum Crater Project.

CS Energy Ltd and Monto Minerals NL - Memorandum of Understanding

Monto Minerals NL and CS Energy Ltd have signed a Memorandum of Understanding and Confidentiality Agreement on the Goondicum Project and Downstream Beneficiation regarding possible participation by Monto Minerals in the Callide Energy Park.

CS Energy and Monto Minerals are seeking participation by industry participants in the beneficiation of ilmenite to an upgraded titaniferous product at Callide.

The ability for Monto Minerals to commit to long term, lower cost production of ilmenite (due to the reduced materials handling requirement) is complemented by the ability of CS Energy to provide long term innovative and attractive energy and land packages at Callide Energy Park. Callide is approximately 100kms northwest of the Goondicum Crater Project. The concept is similar to the Stanwell Industrial Park and AMC's magnesium project.

Feasibility Study

Monadelphous Group Ltd have advised there are no further technical issues preventing the mining and mineral separation of the ilmenite and titano-magnetite from the Goondicum Crater deposit.

Monadelphous and their selected consultants provided a disciplined approach to utilise the pertinent information from previous studies carried out over the past six years, address outstanding issues and formulate a cohesive development plan for production of ilmenite and titano-magnetite.

The following significant issues were resolved:

Surface water storage has been replaced by a substantial long term licenced groundwater resource.
Tailings disposal and rehabilitation techniques, together with a mine plan for approximately 20 years have been developed. The mine plan provides an optimal balance between long term mining, available water supply and the anticipated market for ilmenite.
Mining techniques have been simplified to truck and shovel and thickening of fine tailings modified to allow pumping to the rehabilitation cells where process water will be recovered prior to consolidation and drying of tailings using natural processes and high transpiration pasture vegetation.

The completion of this work has enhanced the opportunity to develop the Memorandum of Understanding with CS Energy Ltd.

Monadelphous Group Ltd has confirmed substantial quantities of feldspar and apatite within the Goondicum Crater Project resource. The exploitation of these products, which may add significant value to the Project, will be further investigated by Monto Minerals with regard to reserve calculations, recoveries and markets and incorporated in the feasibility study. The timing for the completion of these studies will be announced once defined.

Share Purchase Plan - Placement of Shares

The offer to shareholders under the Monto Share Purchase Plan closed on 20 March, 2002.

The Directors are pleased to advise the offer attracted 112 acceptances, totalling 4,668,664 shares at an issue price of 4 cents, raising $187,146.56.

A separate placement of 2,500,000 shares at 4 cents per share has also been made to an existing shareholder, raising an additional $100,000.

The funds raised will be used as working capital.

By Order of the Board

L G JOHNSON (F. Aus.I.M.M., C.P. Geo)

Managing Director

16 April 2002

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 MARCH 2002

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	(31) (86)	(224) (271)
1.3	Dividends received
1.4	Interest and other items of a similar nature received	1	5
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows	(116)	(490)
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)	(116)	(490)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	340	680
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	340	680
	Net increase (decrease) in cash held	224	190
1.20	Cash at beginning of quarter/year to date	110	144
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	334	334

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	12
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

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	45
4.2	Development
a	Total	45

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	334	18
5.2	Deposits at call	0	92
5.3	Bank overdraft
5.4	Other (provide details)
a	Total: cash at end of quarter (item 1.22)	334	110

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	-	-	-	-
6.2	Interests in mining tenements acquired or increased	-	-	-	-

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	138,016,621	138,016,621	a	a
7.4	Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs	8,750,093 Nil	8,750,093 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)	4,293,750 450,000	Nil Nil	Exercise price 7 cents 4.8 cents	Expiry date 15/4/2003 15/4/2003
7.8	Issued during quarter	Nil Nil	Nil Nil	Exercise price Nil Nil	Expiry date Nil Nil
7.9	Exercised during quarter	Nil	Nil	Nil	Nil
7.10	Expired during quarter	625,000	Nil	10 cents	7/2/2002
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 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