Avispa

Overview

The Avispa Lithium Project is located in the Atacama region of northern Chile, west of the town of Calama and 220km north east of Antofagasta, Chile’s largest commercial deep-water port. The project is in the Atacama Region and is connected by asphalt road to the ports of Tocopilla and Antofagasta.

Montero has secured 138km2 of Exploration License in an almost contiguous area south of the main highway between Calama and Tocopilla. The area was previously held by Spence Mining a subsidiary of BHP.

Montero has a binding agreement with a private geological consortium (“Founders”) that has developed certain concepts for the exploration of unique lithium bearing deposits in Chile. Montero has 15 months to complete due diligence sampling program, and once completed, the Founders shall be granted a 1.5% net smelter royalty and $100,000 shares in Montero, subject to regulatory approval. The agreement also provides that when Montero has sufficient confidence that sufficient grade material can be mined and processed economically, the Founders shall be granted a further $600,000 of Montero shares, subject to regulatory approval.

History

The Avispa project area was previously held by Spence Mining, a subsidiary of BHP, that was exploring for porphyry copper-molybdenum mineralization in the area. Approximately 20 diamond drill holes have been observed where BHP have built access roads in the desert.

Geology

The geology of the Avispa Project consists of extensive sedimentary evaporite salt deposits intercalated with fine grained clastic sediments over 30m in thickness. The evaporite salt deposits are near horizontal and are well developed making up over 70% of the area of the Exploration licenses which cover 138km2. The evaporite salt deposits consist of three distinct stratigraphic contiguous horizons termed the L1, L2 and L3 horizons, they are each between 2m to 10m in thickness. The L3 horizon occurs at the base of the exposed evaporite sequence and this is overlain by the L2 horizon and the L1 horizon, respectively. The L3 horizon is the most consistently developed in terms of thickness and aerial extent on the Exploration License.

The lithium values reported by Montero have been obtained from the L1, L2 and L3 evaporite salt horizons exposed at surface in the Avispa project area.

Lithium Mineralisation

Montero has targeted the L1, L2 and L3 evaporite salt horizons exposed at surface for lithium, iodine, and potassium and sodium nitrate mineralisation in the project area.

Montero has undertaken a geological reconnaissance of the area and completed grab channel sampling program over selected portions of the exploration license. A total of 43 vertical channel samples from 24 sampling locations on the property have bene taken. At each of the sampling locations the L1, L2 and L3 horizons were identified and then each horizon individually channel sampled when exposed. Channel samples were taken as a vertical section over the total width of the evaporite horizon. The samples were submitted for chemical analysis at SGS, Chile, with the iodine and nitrate determinations being undertaken by the Servicio Nacional de Geología y Minería (“Sernageomin”), Chile.

The assay results received to date show elevated values of lithium, iodine and other minerals in the L3 evaporite salt horizon with anomalous values in the less developed L1 and L2 horizons. The channel samples taken from the L3 horizon gave lithium values that range from 65ppm Li2O to a high of 760 ppm Li2O. The L2 horizon gave lower lithium values from 19ppm Li2O to 226ppm Li2O. The L3 channel samples show anomalous values of iodine up to 273ppm iodine and strontium carbonate up to 3,621ppm.

The results to date are provided in Table 1 and the sample locations for lithium shown in Figure 2 and for iodine in Figure 3.