April 5, 2007

Mano Plans Listing of “Stellar Diamonds” Subsidiary

Mano River Resources Inc. (“Mano” or “the Company”) the TSX-V and AIM-listed exploration and development company focussed on West Africa, provides an update on its corporate restructuring plans.

  • Diamond assets proposed to be listed on AIM through 100% owned subsidiary Stellar Diamonds Limited (“Stellar”)
  • Mano’s interest in Stellar will be diluted using independently assessed fair values, as a result of the Guinea acquisition and private funding, both referred to below.
  • Advice is being sought as to a tax efficient basis for subsequently distributing Stellar shares to existing shareholders

Rationale for the Restructuring
Mano’s CEO, Dr Tom Elder, comments: “The planned restructuring represents the culmination of ten years of pioneering exploration in West Africa by Mano, yielding a substantial portfolio of diamond projects and joint ventures with some major industry partners.

“With hard rock open pit gold production at the New Liberty Gold project in Liberia and underground diamond production on the Kono kimberlite dyke joint venture (“JV”) with Petra Diamonds, both scheduled for 2008, the board firmly believes that the creation of a separately listed diamond subsidiary will help to unlock significant value for our shareholders, currently not being ascribed by the market. Indeed, currently proposed funding arrangements for Stellar, if successful, are based on a valuation of around £16M or 60% of Mano’s current market capitalization.

Stellar Diamonds Limited
Stellar is to be the Company’s 100% owned subsidiary currently being incorporated in Guernsey. It is the Company’s intention to list Stellar separately on AIM within the next twelve months, with Mano’s Director and VP Exploration for Diamonds, Karl Smithson, being appointed CEO. Stellar will seek to hire a chairman independent from Mano.

Private funding of up to £1 million is being raised for Stellar’s subsidiary company, Mandiamo (holding Mano’s Sierra Leone and Liberia diamond assets), to meet co-funding obligations and exploration commitments from 31 January 2007 onwards, thus avoiding dilution of Mano shareholders’ interests in gold and iron ore assets..

Further brokered pre-IPO financing will be sought in order to maintain Stellar’s current equity interests in the most advanced diamond projects, being:

  1. Kono development and production JV with Petra Diamonds in Sierra Leone (where Stellar owns 49%),
  2. Weasua JV with Trans Hex where bulk sampling of diamond bearing kimberlites will shortly commence (Trans Hex acquiring a 50% interest),
  3. development of the Mandala alluvial mine in Guinea, and
  4. on-going exploration programmes on various other non-joint ventured projects.

An independent valuation report of Mano’s diamond assets has been commissioned, to underpin the valuations on a pre-IPO and IPO basis of Stellar. Mano’s current initial 100% equity position in Stellar will subsequently be diluted as a result of the Guinea acquisition described below, current private funding and future financings. It is projected that Mano’s equity holding in Stellar following planned pre-IPO funding of £4.5 million will be approximately 65%.

Subsequently, Stellar will seek to raise additional funds at IPO in order to finance further development at Kono and Mandala, to continue bulk sampling evaluation of the kimberlite pipes at Weasua and advance its exploration in the region, whilst seeking other high interest diamond opportunities in Africa.

Mano as a Canadian legal entity is seeking advice from Canadian tax specialists to review the implications of a transaction pursuant to strict tax rules, which would result in Mano shareholders receiving shares in Stellar (and, possibly at the same time — see previous News Release – Mano’s iron ore entity) in the most tax efficient manner for both Mano and its shareholders.

It is intended that Stellar will become an integrated diamond producer and explorer in Africa, given that its share of diamond production from its Kono JV with Petra diamonds and Mandala JV is expected to be in the region of 100,000 carats in 2008, increasing to over 150,000 carats in 2010.

The Company’s portfolio of diamond properties and joint ventures in West Africa is summarised as follows:

  • A 49% interest in a JV with Petra Diamonds on the Lion Kimberlite Dykes project in the Kono diamond fields of Sierra Leone, with underground diamond production planned to commence in late 2007. A processing plant is already built and exploration shaft sinking is ongoing with ongoing discoveries of new dykes and diamonds.
  • A 50% interest in a JV with Trans Hex Group in the Weasua cluster of diamondiferous kimberlite pipes in Liberia, where bulk sampling to determine diamond grades and value is currently underway.
  • A 50% interest in the Mandala alluvial and Bouro kimberlite dyke project in Guinea, where a non-43-101 indicated alluvial diamond resource of 550,000 carats has been established and where high grade kimberlite dykes are present. An agreement in-principle has been reached to acquire the remaining 50% interest from our JV partner, SearchGold Resources, in return for shares in Stellar (‘the Guinea acquisition’).
  • A 15,000km2 reconnaissance licence in west Liberia where diamond bearing kimberlites and numerous high interest mineral indicator anomalies have been discovered.
  • A joint venture with BHP Billiton, who are earning an initial 51% interest in the south-eastern Sierra Leone tenements. The joint venture has located a high-grade diamond bearing extension of the high grade Tongo dyke field.
  • Two licences in south east Sierra Leone where kimberlite has been discovered and abundant indicator mineral anomalies require further follow up work.
  • A joint venture with African Aura in Liberia where exploration is ongoing to earn a 78% interest in the north Bea exploration project.
  • A 100% held interest in the Bea MDA licence in Liberia where extensive indicator mineral anomalies have been generated and require further follow up work.
  • A Joint Venture with De Beers to access their regional Guinea database, where an independent consultant is currently reviewing the data and selecting high interest targets for further investigation.

For further information on Mano River Resources and its exploration programme, you are invited to visit the Company’s website at www.manoriver.com or contact:


Tom Elder, President and CEO
Mano River Resources Inc.
+44 (0) 1235 810 740

Justine Howarth / Clare Irvine
Parkgreen Communications
+44 (0) 207 851 7480

Jamie Cumming / Liz Kennedy
Bell Lawrie
+44 (0) 141 221 7733

Raz Hussein
Controller, Canada
+1 (604) 689 1700

Notes to Editors

Review of Mano’s non-diamond assets


  • Mano has completed a positive bankable feasibility (see release of 10 January 2007) on the 100% owned (though subject to government’s 10% free carried interest) 1.4Moz gold resource (13.533 million tonnes of measured and indicated resources grading 3.18 g/t, inclusive of reserves) at New Liberty Gold Project in Liberia, where open pit gold production of at least 100,000 oz in year one (from a reserve comprising 4.39Mt grading 3.8g/t proven and 0.17Mt grading 4.0g/t probable) is planned to commence in 2008, subject to financing and permitting.
  • A pipeline of highly attractive drilled prospects within its 1,000km2 Bea Mountain Licence in Liberia including Weaju (233,000 oz inferred resource of 663,000 tonnes grading 10.9g/t) and Gondoja.
  • A Joint Venture with Golden Star, who are earning an initial 51% interest in a portfolio of highly prospective licences in Sierra Leone.
  • A Joint Venture with Navasota Resources, who are earning up to a 60% interest in the Missamana/Gueliban gold project in Guinea.


African Iron Ore Group Ltd, 80% owned by MRRI, holds the following iron ore assets:

  • A 100% interest in the 12km long Putu Range Iron Ore project where historic reports from Mt Jide indicate a potential of 500 million tonnes (not yet in compliance with the NI 43-101 code) and excluding any potential resources on other ridges. Discussions with industry partners continue in respect of Putu Range. (The potential quantity is conceptual in nature and the grade is unknown. Furthermore, it is uncertain if further exploration will result in the discovery of a mineral resource).
  • A 3.68% minority interest in Mifergui Nimba, holder of a 5% interest (which is free carried for the first $100M invested) in the BHPBilliton-managed one billion tonne Nimba iron ore deposit in Guinea, which straddles the Liberian border where it is being redeveloped by Mittal Steel.

The TSX Venture Exchange has not reviewed and does not take responsibility for the adequacy or accuracy of this release