Dr. Tony Harwood reports

MONTERO EVALUATES EXTENSIVE OFF-SHORE PHOSPHATE DEPOSITS IN SOUTH AFRICA

Montero Mining and Exploration Ltd. has completed an initial review of geological data relating to extensive offshore sedimentary phosphate deposits within the Greenflash project area in South Africa. The Greenflash project is the second phosphate asset being advanced with financing partner Ovation Capital in South Africa. Ovation has committed to expenditures of roughly $2.7-million to acquire a 10-per-cent interest in Montero's Duyker Eiland project. At the Greenflash project, Ovation has agreed to co-fund due diligence with Montero, where, upon receiving a positive review, may elect to provide Montero 100 per cent of the financing to outline a resource for equity participation in the project (see press release Sept. 10, 2015). The Greenflash project could potentially provide additional feedstock to a fertilizer plant envisaged to be developed in Saldanha Bay by Montero and Ovation.

Montero and Ovation have until March 10, 2016, to complete the due diligence on the Greenflash project after which the parties may elect to immediately earn a 49-per-cent interest by committing to complete a resource estimate which may then increase to a 75-per-cent interest by completing a feasibility study.

Dr. Tony Harwood, president and chief executive officer of Montero, commented: "The Greenflash project area is located 30 kilometres from Saldanha Bay port where prior drilling was completed to investigate its diamond potential and covers approximately 10 per cent of the Greenflash project area. Our initial review of data confirms that an extensive area of phosphate-rich sediment has been outlined and warrants further investigation. The acquisition fits with Montero and Ovation's strategy of developing multiple phosphate rock assets to support a fertilizer plant in the Saldanha Bay area."

The Greenflash project area contains extensive phosphorite-rich sediment accumulation located on the sea bed of the continental shelf off the western coastline of South Africa. At its nearest point, the project area is 30 kilometres from Saldanha Bay and Montero's Duyker Eiland phosphate project (now fully financed by Ovation to prefeasibility stage). Within the Greenflash licence area, concentrations of phosphorite occur over an area of about 200 square kilometres off the coast of Saldanha Bay on the continental shelf at depths of between 100 metres to 400 metres below sea level. Phosphorite rock is the principal resource for phosphate (P2O5). The phosphorite is concentrated with glauconite in sediments that are referred to as greensands.

The phosphorite deposits have been concentrated over many millions of years by repeated cycles of deposition and reworking on the middle to outer continental shelf. Although greensand deposits occur over much of the outer continental shelf, the highest concentrations of greensand occur 50 kilometres offshore of Cape Columbine (just north of Saldana Bay) between 200 metres and 260 metres of water depth, and form a sedimentary layer on the sea bed between two metres and four metres thick.

Exploration in the Greenflash project area started in the 1980s for offshore diamonds. A major drilling program was carried out in the 1990s in a 200-square-kilometre target area located 50 kilometres from Saldanha Bay. In this target area, a total of 412 diamond drill holes were drilled, of which 359 returned core lengths of greater than one metre. The drill core was given to the University of Cape Town (UCT) for research purposes. Various research studies on the offshore geology and drill core samples were advanced by South Africa's Council for Geoscience and UCT's Marine Geoscience Group. An extensive area of phosphorite-rich sediment has been identified in these studies and this forms the principal evaluation target in Montero's investigation.

Montero is assessing the core and existing geological information to better understand the phosphate potential of the Greenflash project. This information will then be reviewed with Ovation in order to determine if Ovation will fund a phosphate resource study.

Qualified person's statement

Mike Evans, MSc, PrSciNat, who is a qualified person for the purpose of National Instrument 43-101 and a consulting geologist to Montero, has prepared, reviewed and approved the scientific and technical disclosure in this news release.

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