Montero Mining and Exploration Ltd

Montero Mining and Exploration Ltd

October 04, 2011 09:00 ET

Montero Increases Its Interest to 70% in Wigu Hill REE Project in Tanzania

TORONTO, ONTARIO--(Marketwire - Oct. 4, 2011) - Montero Mining and Exploration Ltd. (TSX VENTURE:MON) ("Montero") is pleased to announce that it has increased its interest in the Wigu Hill Rare Earth Element Project in Tanzania by a further 10% and now holds a 70% interest in the project. Montero has entered into a Shareholders Agreement with the joint venture partner, RSR (Tanzania) Limited with respect to the Wigu Hill REE Project whereby the Wigu Hill property is being 100% transferred to a newly formed subsidiary where Montero will retain a 70% equity interest.

Dr. Tony Harwood, President and Chief Executive Officer of Montero commented, "Increasing our interest in the Wigu Hill REE Project to 70% and entering into a shareholders agreement is crucial to the advancement of the project to the mining licence stage and secures our equity position in our flagship Rare Earth Project. We remain focused on adding to our initial NI 43-101 Resource Estimate by further drilling and advancing the metallurgical and hydrometallurgical test-work, driving to our target of building a mine and producing the Light Rare Earth Elements for sale"

Pursuant to the Shareholders Agreement, Montero has agreed to pay to RSR (Tanzania) Limited ("RSR"), USD$ 1,500,000 as consideration for the additional 10% interest in the project. A sum of USD$ 800,000 was paid to RSR on signing of the Shareholders Agreement, following the lodging with the Commissioner for Mines of Tanzania of transfers of the Wigu Hill REE Project licences. The remaining USD$ 700,000 is to be paid following the grant of a Mining Licence for the Wigu Hill REE project, the grant of a development agreement for the area and the grant of a retention licence for the portion of the Project not subject to the Mining Licence. The Shareholders Agreement contains an acknowledgement from RSR that Montero has satisfied its obligation under the Option Agreement between Montero and RSR to incur not less than USD$ 3,500,000 in exploration expenditures on the Wigu Hill REE Project. The Shareholders Agreement otherwise incorporates the applicable terms of the Option Agreement and all expenditures moving forward will be subject to the dilution formula.

About Montero Mining & Exploration

Montero Mining and Exploration Limited is a mineral exploration and development company focused on the development of our flagship Wigu Hill Rare Earth Element Project in Tanzania. The Wigu Hill project is a high grade undeveloped Light Rare Earth Element deposit where the company's current focus is further exploration drilling to add to our initial NI 43-101 Mineral Resource Estimate.

Rare Earth Elements (a group of 15 metals) are critical in the advancement and development of emerging "green" technologies and high-tech applications. Currently China produces 97% of world supply of REEs and these are becoming increasingly critical to both 21st Century technological progress and environmentally sustainable development. With the rising prices of REEs and China's control over export quotas, it is becoming imperative that the rest of the world develops new rare earth resources to meet the increasing demand from "green" technology.

Montero's growth strategy is to develop the Wigu Hill Rare Earth Element project and to bring this to account through eventual rare earth production and cash flow. Montero plans to operate in an environmentally and socially responsible manner, adding value to all stakeholders. Montero trades on the TSX Venture Exchange under the symbol MON.

Signed. Dr. Tony Harwood - President and CEO

CAUTIONARY STATEMENT: This News Release includes certain "forward-looking statements". These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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