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Montero Mining & Exploration Ltd.: DEEP DIVE

Montero Mining adds Chilean upside to existing lithium portfolio

Montero Mining already has an attractive lithium portfolio in Namibia
Montero Mining adds Chilean upside to existing lithium portfolio
OVERVIEW: MON The Big Picture
The Chilean ground is in the world's leading area for lithium production

What’s next for Montero Mining (CVE:MON)?

The question is intriguing because the company is just about to add a potentially significant string to its bow, with the acquisition of new exploration ground in Chile, right in the heart of the lithium triangle.

Because the licensing hasn’t yet been completed, there’s not too much Tony Harwood, Montero’s chief executive can say about it, other than that it’s big and that it could be a gamechanger.

READ: Montero Mining and Exploration stakes potential new lithium discovery in Chile

“It’s a potential new lithium discovery in Chile,” he says.

“And Chile is probably the foremost lithium producer in the world. We’ve been fortunate because we were approached by a discovery group that wanted a technical partner. And so we’ve been staking and applying for exploration licences across 13,800 hectares of prospective ground.”

So far so good. But the licences haven’t all been signed off yet, so it won’t be until November that the market gets the full picture about the opportunity on offer in Chile.

For now, we’ll have to make do with two basic facts: it’s big, and it’s in one of the world’s most prolific lithium producing regions.

At this stage, Harwood can’t say either whether the Chilean lithium opportunity is likely to grab the focus away from the company’s existing portfolio of lithium assets in Namibia. That in itself is a sign that the Chilean project could really amount to something, but it’s worth remembering that while the Chilean ground represents grassroots exploration, in Namibia Montero is already sitting on established mineralisation.

The Namibian properties are more advanced, two out of the three have been drilled, and the thinking is that subject to metals prices, these projects will now be drilled further and taken on through to the feasibility stage.

Namibia is a good place for such an undertaking. Unlike many of the world’s mining jurisdictions now opening up to lithium, Namibia already has a past-producing lithium mine. The country is, in any case, a major destination for copper, gold and diamond miners, and Harwood calls it “probably the foremost mining jurisdiction in Southern Africa alongside Botswana.”

It is, in short, a good place to go mining and at the Uis tailings project, Montero looks quite likely to make an early start.

The Uis tailings come out of the old Uis tin mine, which is now being refurbished by Afritin Mining (LON:ATM). The tailings are owned separately and present an interesting lithium opportunity. Back in its heyday, no-one at the Uis mine was remotely interested in extracting lithium from the ore. It simply piled up in the waste rock and was left to stand there.

Enter Montero.

“There are 20mln tonnes of tin tailings there,” says Harwood. “These have been drilled and lithium values found. We are looking at an economic method of extracting the lithium. It’s on the surface and it’s easy to mine, albeit that it’s low grade. There’s no need for drilling and blasting.”

In time, concedes Harwood, it’s possible that Montero might team up with Afritin if the tailings do prove economic. For now, though, more test work is required, and drilling is planned before year-end.

Meanwhile, at the Soris project to the north, Montero has its feet on a former tin-tantalum project that was never really investigated for lithium. Nonetheless, says Harwood, Soris does have “some attractive lithium values.”

It’s helpful that Montero has a memorandum of understanding with a potential Chinese customer that’s looking to secure lithium supply from southern Africa.

Helpful too that Montero has two legacy assets on its books that if flipped could provide extra funds to help the company get on and develop its lithium portfolio.

Harwood regards the recent lithium price dip as a blip. Batteries in fully electrified vehicles are just likely to create too much demand, he reckons.

But even at these prices, Montero looks an intriguing proposition. And it will be interesting to see what kind of upside really is on offer when details of the Chilean deal are finally released to market in a few weeks time.

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