Mano River aims to boost New Liberty gold tally

Vancouver–Mano River Resources (MNO-V, MANA-L) has begun a new round of drilling on its New Liberty gold project, in northwestern Liberia, aimed at increasing the resource.

The current resource estimate, part of a positive feasibility study completed in early 2007, pegged the measured and indicated resource at New Liberty at 13.5 million tonnes averaging 3.2 grams gold per tonne for about 1.38 million contained ounces gold using a 1-gram gold cutoff grade. Within the resource, proven and probable reserves of 4.6 million tonnes at 3.9 grams gold were reviewed for 573,000 contained ounces gold.

The company will focus on delineation and infill drilling to upgrade portions of the current resource, but will also test the depth extension of mineralization, with drilling reaching 500-600 metres below surface. Last year’s feasibility indicated an open-pit operation at New Liberty would be economic. The plan models eight years of production from three open pits with average annual output of 68,000 oz. gold.

Based on US$600-per-oz. gold and assuming 70% debt financing (at 6% interest over five years), the study estimated an internal rate of return of 72%, a net present value of US$28 million (at a 10% discount), and capital costs of around US$59 million. Payback is projected in 2.5 years.

The company is looking at revising its feasibility study to facilitate an integrated underground operation — boosting the mine life.

Mineralization at New Liberty occurs in an Archean greenstone belt environment with gold hosted in a steeply dipping zone up to 30 metres thick. Studies indicate simple metallurgy with overall gold recoveries of about 93%.

Since 2003 and the end of a civil war, Liberia is seeing significant growth in mineralization exploration. Companies are acquiring significant land positions in the country to evaluate the region’s geology, which is similar to that of neighbouring countries Guinea, Cote d’Ivoire and Sierra Leone.

Aside from gold projects in Liberia, Mano River holds significant diamond and gold projects in Sierra Leone and Guinea.

The company also has an iron ore project in eastern Liberia and holds a small stake in the Nimba iron ore deposit in Guinea, managed by BHP Billiton (BHP-N, BLT-L).