RNS Number : 8933J
  Mano River Resources Inc
  10 December 2008
   


    10 December 2008 

    TSX-V: MNO
    AIM: MANA

     MANO RIVER RESOURCES Inc.
    ("Mano" or the "Company") 

    CLOSES DEAL WITH SEVERSTAL TO DEVELOP IRON ORE ASSET
    &
      MANO TO RECEIVE US$12.5M TO PROGRESS OTHER ASSETS

    Mano River Resources Inc, the TSX-V and AIM-listed exploration and development company focused on iron ore, diamonds and gold in west
Africa, is pleased to announce that it has closed the transaction with Severstal Resources' indirect wholly-owned Dutch subsidiary, Lybica
Holding B.V. ("Severstal") to finance and develop the Company's Putu Range iron ore project in south eastern Liberia ("Putu" or the
"Project") which is held under African Iron Ore Group Ltd. ("AIOG").

    Further to the agreement signed on 22 May 2008, Severstal has now acquired a 61.5% equity interest in AIOG while Mano's holding has been
reduced from 80% to 38.5%. In light of Severstal's majority interest, AIOG will be re-named Severstal Liberia Iron Ore Ltd. and Severstal
will become the operator on the Project. The parties have also entered into a shareholders' agreement to govern their relationship.  The
Company had previously announced on 24 October 2008 the two year extension of Mano's Putu Range Iron Ore exploration licence, which
satisfied all material legal requirements for the Company to close the deal with Severstal.

    Putu Iron Ore Project 

    Severstal is investing US$30 million (US$15 million by way of a new subscription of shares in AIOG and US$15 million through a loan
facility agreement) to advance Putu through to a definitive feasibility study.  AIOG is currently in the final stages of an initial 4,000m
drill programme aimed at further delineating the resource at Putu and establishing the quality and quantity of the resource.  A technical
update on the project will be provided in the coming weeks.

    Terms

    Additionally, based on the terms of the agreement, Severstal agreed to pay US$12.5 million directly to Mano in consideration for 25% of
Mano's interest in AIOG.  This sum will be paid partly on completion (US$8.3M), with the balance (US$4.2M) deferred for two years and its
payment at that time subject to the continued advancement by the parties of the Project.  These funds will advance other priority
properties, with a particular focus on developing the gold division in Liberia in line with the Company's strategic direction. A further
investment by the Company into Stellar Diamonds is also being considered in the immediate future.

    In closing the transaction, the Company has also agreed to allow Severstal to optimise its own cash management by maintaining a minimum
balance in the AIOG bank account of working capital that is no less than the quarterly work programme requirement.  To implement this, it
has been agreed that, from the funds invested, AIOG will provide a loan to Severstal's Cypriot affiliate of approximately US$11M.
      
    Luis da Silva, Chief Executive Officer of Mano commented:
    "We are extremely pleased to have closed the deal with Severstal. This is the culmination of many months of work which has taken place
with Severstal to progress the Putu iron ore project.  We are convinced Severstal brings the complimentary technical expertise and skills to
develop an asset of this magnitude. Severstal's input will allow us to accelerate the development of Putu and realise value in the medium
term."

    "2008 has seen a number of significant developments in the Company as well as across the financial markets. The closing of this deal
with Severstal, is a good example of a small cap company working closer with experienced partners. This will ensure that Mano embarks on a
new phase of financial stability and growth to progress the Company towards development and production."



 Mano River Resources Inc            
 Luis da Silva, CEO                 +44 (0) 20 7299 4212
                                     
 Pelham PR
 Charles Vivian / James MacFarlane  +44 (0) 20 7743 6670
                                     
 GMP Securities Europe LLP
 James Hannon                       +44 (0) 20 7647 2803
 Panmure Gordon (UK) Limited         
 Edward Farmer                      +44 (0) 20 7614 8384

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


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
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