AGM CHAIRMAN’S ADDRESS


Fellow Shareholders, Ladies and Gentlemen

It gives me great pleasure to address you today at a time when your company is on the verge of significant advancement.

Our ability to deliver the Goondicum Crater Project has never looked more solid.

We have come a long way in the twelve months since the last Annual General Meeting.

There is no denying there have been some disappointments and set backs.

We faced some initial disappointments with Monadelphous not being able to deliver a project finance outcome under our agreement with them.

However some excellent engineering work was undertaken to resolve tailings disposal and mine planning issues.

But more importantly, I can now report that we have a very optimistic view of the project’s potential.

This is in no small way due to the efforts of a small group of people with us here today.

One of the factors which caused Monadelphous to baulk at a co product strategy for the Goondicum Project was a general belief – discussed at some length at last year’s AGM –that the project could not economically produce Feldspar and Apatite.

That resulted in a focus on Ilmenite and Titano-magnetite.

Whilst it appears that a project based on these two products would provide positive returns, it is also clear that it would be difficult to obtain project finance on the returns achievable.

It also became apparent that, in reality, the Titano-magnetite is not a major revenue source.

Following a hiatus surrounding this issue, I was approached, along with Mr Geoff Moore, to take a seat on the Board.

The then Chairman Terry Morris and non-executive director Mal Larkins, felt, along with the rest of the Board, it was an opportune time to get some additional industry experience.

After an extensive period of due diligence, Geoff Moore and I accepted invitations to join the board and did so in May this year.

I acknowledge the efforts Terry and Mal put into advancing the company’s business during their time on the Board, most particularly their sterling service from both a time and financing viewpoint.

At the same time, Laurie Johnson who has been with the Company since its formation as managing director stood aside from that position to facilitate my taking on the role of executive chairman.

Laurie remains on the Board and retains an executive role to assist me as we move forward.

Without Laurie’s persistence and belief that there was a project of substance at Goondicum, we would not be here today.

Peter Dowling has also been appointed deputy chair. His financial acumen and detailed knowledge in mining and resource projects has and will assist us greatly as we move toward this exciting new phase.

One of the strong views Geoff and I formed in joining the board was that for Monto Minerals to achieve its objective of developing Goondicum, we had to develop a successful co-product strategy to sell significant quantities of Feldspar and Apatite.

I have asked that Geoff address today’s meeting on our recent marketing efforts.

As we gather here today, we believe that there is every prospect of obtaining very good FOB apatite prices at the Mine gate as a result of working closely with an established Queensland company, the principal of which supported our last September fund raising.

Feldspar will have different challenges than Apatite because marketing will need to be to many customers in a range of countries.

The pleasing aspect to the enquiries on feldspar appears to be that the high Alumina content of our product will be a strong selling point as is the sandy nature of the product.

This latter feature, which really relates to grain size, assists in the feldspar mixing with other constituents in the glass furnace melt.

The next critical step is for us to establish a small plant, which can generate sufficient tonnage to allow selected customers the opportunity to trial our feldspar and other products in their full-scale plants.

Without such trials we will not get contracts and without contracts we cannot get finance for the project.

We are working on a variety of ways to progress this demonstration plant and are hopeful that we will be able to advance the concept in the very near future.

Your company has achieved much in the past year:
  • All Land owner compensation prior to production has been paid
  • We have relevant government approvals for Water Bore licences and our EMOS
  • Our Mining Lease is intact and in good order
  • We have improved the plant flowsheet by eliminating the need for a flotation plant
  • We have demonstrated the quality of our feldspar and apatite by the interest of customers in Australia and overseas
  • A substantial sum of money has been raised during the year from very supportive shareholders, enabling the Company to progress the Goondicum Crater Project towards feasibility.

We have yet to suffer a setback in our marketing campaign.

This is truly remarkable given the doubts that have been previously expressed about our products.

There are risks in pursuing a co-product strategy, not least of which is that we have to be able to deliver three quality products not just one.

However the advantages for Monto in achieving this include delivery of a very diverse product mix, which services three very different sectors.

Monto will be unique in being the only substantial producer globally to produce and market Ilmenite, Feldspar and Apatite from a single deposit.

The significance of this in our ability to defend a particular market sector has not yet dawned on most observers.

Monto’s current vision is for us to find a strong partner to assist us to develop the project.

To that end we retained the services of Richard Cottee on a part time basis. Richard was previously CEO of CS Energy and has a long and established track record in the resources sector.

Richard has assisted us in putting together a brief Information Memorandum, which we intend to use in marketing and to seek out suitable partners.

The secret to Monto’s success will be our ability to market all three products.

Our vision therefore has us continuing to retain responsibility for marketing, no matter how we decide to build and operate the mine.

Goondicum mining and processing is important but our marketing and on going customer relationships will be absolutely critical to our future success.

We must keep close to them and understand their needs and plans.

For that vital reason, we intend to retain marketing responsibility in house.

We will also retain responsibility for tenement administration and finance.

This will not require a large team but they will need to be committed and dedicated to ensure shareholder value is created and delivered.

Whether or not we need to become miners and processors as well will depend on a range of factors yet to be resolved.

In closing I want to thank my fellow directors who have worked well as a team. I want to pay credit to them for their untiring efforts.

I also want to thank Lesley Skipp who left us a little over a month ago for her dedication and loyalty since the company began.

Finally, I want to make some comments on corporate governance.

It is not generally accepted as best practice for Chairmen of public companies in Australia to be there in an executive role.

My appointment as executive chairman will not last long. I see it as important to get the Goondicum Crater Project moving, but until that has a high degree of probability in terms of finance, it is difficult to see us being able to attract a suitable person as CEO.

I am in the fortunate position of being a part time executive – in other words I have other income sources.

The company at this juncture cannot afford the right calibre of CEO.

The other matter for the Board to consider in the near future is the composition of the Board in terms of its skill mix.

We could certainly benefit from someone with a grounding in law. Your directors will be giving this some consideration in the coming month.

Thank you for your attendance here today and for your continued support for Monto Minerals.




PETER J SLAUGHTER

Executive Chairman