Resource World Magazine

J U N E / J U L Y 2 0 1 7 www.resourceworld.com 27 I like companies that identify a niche in the market and work quickly to exploit it. Montan Mining, [MNY- TSXV; S5GM-FSE; MNYC-Shanghai SE] is just such a company. I'm not the only one who thinks this is the case. Cartesian Capital Group LLC, a corporation that manages over US $2.4 billion in capital, just inked a deal with Montan to invest up to US $10 million in an equity and gold stream facility. Basically, the deal helps fund the acquisition of an operating processing plant in Peru as well as bring Montan's wholly-owned Cerro Dorado gold processing plant into full commercial production. The streaming agreement (for about 15% of production) allows Montan to acquire a profitable 125 tonne-per-day (tpd) Mirador processing plant from Sino Energy and Resource Ltd. for US $3 mil- lion and 3 million Montan shares. The toll-milling plant is located in northern Peru and currently operates as one of the lowest-cost in the country at US $22 per tonne for its flotation circuit and $87 per tonne in its carbon-in-pulp (CIP) circuit. The Mirador plant is expected to gener- ate US $1.9 million EBITDA by the fourth quarter of 2017. The operation has a two- month waiting list for flotation processing from local miners. People are often the key to success in any company and that fact is no different at Mirador. That plant's success is due to its operational team which consists of four full time resident Korean engineers. This proven team will continue working at Mirador with Montan and will help guide the start-up process at Montan's Cerro Dorado plant. What excites me about Montan's Cerro Dorado plant is the fact that it is strate- gically located 700 km south of Lima in the mining district of Caraveli, Arequipa. There are no competing toll mills in this area and ore is currently being trucked right past Cerro Dorado to the Chala and Nazca toll mills 130 to 290 km further north, respectively. Local miners can potentially save US $25 to US $40 per tonne in transport costs by processing their ore at Cerro Dorado. The Cerro Dorado plant is permitted to 125 tpd and is capable of processing 45 tpd as is. The company plans to expand the operation to reach its permitted capacity. Montan's General Manager was the former commercial manager and buyer for Peru's largest private toll milling company and should make Montan very competitive at acquiring feed for the mill. The company also holds 10 mineral con- cessions in the vicinity of both its Mirador and Cerro Dorado plants as well as one fully permitted, high-grade, gold mine, known as Rey Salomon. The company will focus on processing contracted, permitted supply at both its plants. Montan's busi- ness plan aims at converting its suppliers into long term partners via joint ventures. This integrated mining and process- ing model will allow Montan to ensure a secure source of feed for its plants and to deliver cash flow. Montan's management team is also top notch. Ian Graham, CEO and director, has over 20 years of development and explo- ration experience. He has worked with companies like Rio Tinto, Anglo American and on well-known projects like the Diavik diamond mine in Canada's Northwest Territories. Luis Zapada, Executive Chairman, is a former partner and Head of Capital Markets at Seminario SAB and former Head of Latin America Institutional Equity Sales at Canaccord Genuity. With a market capitalization of just $4 million, a solid management and operating team, and recently secured financial back- ing, I believe Montan Mining is poised for success. n Shayne Nyquvest is an Investment Advisor with Mackie Research Capital Corporation (MRCC). This article was prepared, in part, under contract by Thomas Schuster. The opinions, estimates and projections herein are those of the author and may not reflect that of MRCC. The information and opinions con- tained herein have been compiled and derived from sources believed to be reliable, but no rep- resentation or warranty, expressed or implied, is made as to their accuracy or completeness. The issuer(s) mentioned in this article may not be suitable for all investors. Please consult an investment professional for advice regard- ing your particular circumstance. Neither the author nor MRCC accepts liability whatsoever for any loss arising from any use of this article or its contents. Information may be available to MRCC which is not reflected herein. This article is not to be construed as an offer to sell or a solicitation for an offer to buy any securi- ties. The information contained in this article is not intended to constitute a research report. Shayne Nyquvest is a beneficial owner of the company highlighted in this article. Broker's Picks by Shayne Nyquvest Montan to monetize small-scale mining industry in Peru People are often the key to success in any company and that fact is no different at Mirador.

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