Explanatory Memorandum to Shareholders

Issue of Shares to Monadelphous Group Ltd

The Company is seeking approval to issue up to 18,450,000 ordinary shares in the capital of the Company to Monadelphous Group Ltd ("Monadelphous") at a notional issue price of 8 cents per share.

Agreement between Monto Minerals NL and Monadelphous Group Ltd

The issue is to be made in accordance with an agreement whereby Monadelphous will accept shares in exchange for feasibility work to be undertaken on the Goondicum Project. The agreement was announced on 3 July 2001 and is summarised as follows:

Monto Minerals NL (Monto) signed an agreement with Monadelphous to finalise the Feasibility Study, secure funding and develop the Goondicum Crater Project.

Monadelphous will finalise the feasibility study for the Goondicum Crater Project in exchange for equity in Monto. The amount of equity (Feasibility Fee) will vary depending upon the costs incurred by Monadelphous and will be between 12,300,000 and 18,450,000 shares. Monto has the option of making a cash payment in lieu of issuing shares.

Under the agreement Monadelphous will build upon the extensive work already completed by Monto by finalising testwork, evaluation, costing and documentation of all major engineering and environmental areas of the Project development as well as marketing and financial requirements. Several parties interested in purchasing the products have been identified.

Funding of the Project is likely to involve the introduction of additional equity partners and obtaining project finance.

Monadelphous will also be awarded an Engineering Procurement and Construction Contract, negotiated on commercial terms, for the development of the mine and will earn a Development Fee. The Development Fee will equate to approximately four percent of the estimated capital cost of mine and infrastructure development. Half of the Development Fee is payable when finance for development is secured and the balance is payable after the mine is constructed and commissioning tests have been completed.

As Monadelphous is committing to significant expenditure on the Project, a penalty applies if Monto withdraws from the agreement. That penalty would be the payment to Monadelphous of the Feasibility Fee and the Development Fee. Monto's withdrawal would only be likely if a more attractive proposal was received and accepted.

The target date for achieving closure on mine funding is 2 January 2002 and the agreement may be terminated by Monto if funding is not achieved by 2 April 2002.

At the time of the announcement Monto's Chairman, Mr Terry Morris, said: "this agreement with Monadelphous, a very successful, innovative and capable publicly listed company, is a most significant step towards production from the Goondicum Crater Project."

Whilst the agreement gives Monto the option to pay cash rather than issue shares, the directors do not believe that is a practical alternative for the Company at this time.

Timing of the Share Issues

The timing for the proposed share issues will be determined by with the terms of the agreement with Monadelphous. A minimum of 6,000,000 shares will be issued within 14 days of Monadelphous completing certain technical testwork, particularly in relation to treatment of mining tailings. The tests are likely to be completed by December 2001.

Depending upon costs incurred by Monadelphous, up to 6,150,000 additional shares , may be issued at the same time as the abovementioned 6,000,000 shares or at other times during the feasibility work. A final tranche of 6,300,000 shares will be issued within 14 days of finance facilities being made available for commencement of the Project. In any event the maximum number of shares to be issued under the agreement is 18,450,000. The final date for issue of shares is 16 April, 2002.

By order of the Board

GARRY M. EDWARDS

Company Secretary

MONTO MINERALS NL ACN 063 144 865 Explanatory Memorandum to Shareholders In relation to Agenda Item 1 on the Notice of General Meeting dated 25 July 2001
Issue of Shares to Monadelphous Group Ltd The Company is seeking approval to issue up to 18,450,000 ordinary shares in the capital of the Company to Monadelphous Group Ltd ("Monadelphous") at a notional issue price of 8 cents per share. Agreement between Monto Minerals NL and Monadelphous Group Ltd The issue is to be made in accordance with an agreement whereby Monadelphous will accept shares in exchange for feasibility work to be undertaken on the Goondicum Project. The agreement was announced on 3 July 2001 and is summarised as follows: Monto Minerals NL (Monto) signed an agreement with Monadelphous to finalise the Feasibility Study, secure funding and develop the Goondicum Crater Project. Monadelphous will finalise the feasibility study for the Goondicum Crater Project in exchange for equity in Monto. The amount of equity (Feasibility Fee) will vary depending upon the costs incurred by Monadelphous and will be between 12,300,000 and 18,450,000 shares. Monto has the option of making a cash payment in lieu of issuing shares. Under the agreement Monadelphous will build upon the extensive work already completed by Monto by finalising testwork, evaluation, costing and documentation of all major engineering and environmental areas of the Project development as well as marketing and financial requirements. Several parties interested in purchasing the products have been identified. Funding of the Project is likely to involve the introduction of additional equity partners and obtaining project finance. Monadelphous will also be awarded an Engineering Procurement and Construction Contract, negotiated on commercial terms, for the development of the mine and will earn a Development Fee. The Development Fee will equate to approximately four percent of the estimated capital cost of mine and infrastructure development. Half of the Development Fee is payable when finance for development is secured and the balance is payable after the mine is constructed and commissioning tests have been completed. As Monadelphous is committing to significant expenditure on the Project, a penalty applies if Monto withdraws from the agreement. That penalty would be the payment to Monadelphous of the Feasibility Fee and the Development Fee. Monto's withdrawal would only be likely if a more attractive proposal was received and accepted. The target date for achieving closure on mine funding is 2 January 2002 and the agreement may be terminated by Monto if funding is not achieved by 2 April 2002. At the time of the announcement Monto's Chairman, Mr Terry Morris, said: "this agreement with Monadelphous, a very successful, innovative and capable publicly listed company, is a most significant step towards production from the Goondicum Crater Project." Whilst the agreement gives Monto the option to pay cash rather than issue shares, the directors do not believe that is a practical alternative for the Company at this time. Timing of the Share Issues The timing for the proposed share issues will be determined by with the terms of the agreement with Monadelphous. A minimum of 6,000,000 shares will be issued within 14 days of Monadelphous completing certain technical testwork, particularly in relation to treatment of mining tailings. The tests are likely to be completed by December 2001. Depending upon costs incurred by Monadelphous, up to 6,150,000 additional shares , may be issued at the same time as the abovementioned 6,000,000 shares or at other times during the feasibility work. A final tranche of 6,300,000 shares will be issued within 14 days of finance facilities being made available for commencement of the Project. In any event the maximum number of shares to be issued under the agreement is 18,450,000. The final date for issue of shares is 16 April, 2002. By order of the Board GARRY M. EDWARDS Company Secretary