Mano River Resources Inc (MANA)

Mano River Resources Inc (MANA) – Mano signs agreements with Severstal for investment in Mano and funding to develop the Putu Range Iron Ore Project in Liberia

Mano, the TSX-V and AIM-listed exploration and development company focussed on gold, diamonds and iron ore in west Africa, is pleased to announce that it has signed certain agreements with Severstal’s indirect wholly-owned Dutch subsidiary, Lybica Holding B.V..  Severstal is a leading Russian steel and natural resources company.

• Under a subscription agreement, an indirect wholly-owned subsidiary of Severstal will make an equity investment of approximately US$4m in Mano (at 10p per share) on 29 May 2008 with an option to make an additional equity investment in Mano (at 14p share) in due course; and

• Under a share purchase and subscription agreement, an indirect wholly-owned subsidiary of Severstal will pay $37.5m for a 61.5% stake in the Putu Range Iron Ore Project held under African Iron Ore Group Ltd. (“AIOG”), Mano’s existing 80% owned subsidiary. In addition, the indirect wholly-owned Severstal subsidiary has agreed to enter into a facility agreement after completion under which it will provide AIOG with further funding of up to US$15m. The SPSA is conditional, on customary conditions to completion, on the completion of satisfactory due diligence by Severstal Resurs (which manages all Severstal’s mining assets) and on Mano converting its exploration licence into a Mineral Development Agreement (“MDA”).

The agreements with Mano represent Severstal’s entry into Africa using Mano as its conduit.   Severstal is a leading Russian steel and natural resources company with a strong global presence.  Currently Severstal Resurs (Severstal’s mining division) has significant iron ore production of 14.7 million tonnes per annum.  The share purchase and subscription agreement between Mano and Severstal is dependent on a number of customary conditions, including Mano’s successful conversion of its exploration licence into a full 25 year Mineral Development Agreement with the government of Liberia, which is expected to take approximately 4 months from the date of the agreement being signed.

Mano is targeting a potential resource of 900 million tonnes on the Putu Range Iron Ore Project with an aggressive 4,000m drill programme ongoing to further delineate the resource and to further establish the quantity and quality of the resource.  The funds raised through the share purchase and subscription agreement with Severstal would be used to invest solely into Liberia.  The inhabitants in the county of Grand Gedeh (where Putu is located) as well as neighbouring counties are expected to benefit significantly as investment into the project increases, creating substantial employment opportunities and boosting the local economy.  It is expected that in excess of US$1bn will be invested into surrounding infrastructure and mine construction, which will provide large economic benefits to Liberia.  As well as fast tracking development of the Putu Range Iron Ore Project through to production, the investment into the Company, following the agreements with Severstal, would accelerate development of the New Liberty Gold Project through to production. As at 31 December 2007 the balance sheet of AIOG showed a gross assets total of US$2,429,514 and a net assets total of US$1.00. AIOG has not been revenue generating since incorporation.

Luis da Silva, Mano CEO commented:
“We are delighted to have entered into this agreement with Severstal. Mano’s expertise in West Africa, coupled with Severstal Resurs expertise in developing iron ore deposits will be critical in bringing the Putu Range Iron Ore project to production.  We see this as a very positive partnership and a significant step forward for Mano as the Company looks to enter the next phase of growth.  We look forward to working closely with Severstal and believe that this deal will be the catalyst for economic and social development for eastern Liberia. This direct investment into Grand Gedeh will make it the growth engine of the region.”

For further information on Mano River Resources please visit www.manoriver.com