Mano River enters JV to mine Sierra Leone kimberlite dykes

Vancouver – Through a joint venture with Australian-listed diamond miner Crown Diamonds, west African explorer Mano River Resources (MNO-V) anticipates production from its Lion Kimberlite Dykes project, on the Kono licences in eastern Sierra Leone, in 2005.

Crown Diamonds, through an investment of US$3-million over three years, will earn a 51% interest and become operator in Mano River’s subsidiary, Kono Diamond Corporation, which will hold the three Kono licences.

The diamondiferous Lion kimberlite dyke swarm has been the target of extensive exploration by Mano River in the project area, and has included mapping, sampling and mini-bulk testing, resulting in the definition of at least ten dykes of up to 6 km in length each. Extensive artisanal mining of weathered kimberlite from the dykes, coupled with the mini-bulk testing, has shown areas of high grade and carat values. Grades of up to 94 carats-per-hundred-tonnes (cpht) have been returned from the Lion-5 dyke.

Underground mining of the dykes is expected to be aided by the very competent granitic host rock, which should result in stable walls and limited dilution. Stone values from current mine production at the adjacent Koidu pipe are in the range of US$200/carat.

The government of Sierra Leone, who are anxious for legal, commercial diamond production in the country, have thrown strong support behind the proposed operation.

Crown Diamonds has demonstrated experience as an underground miner, with significant diamond production from kimberlite fissure mining operations in South Africa. The Messina and Star operations, as well as the recently acquired Helam and Dancarl mines, are expected produce well over 150,000 carats of diamonds in 2005.

Sierra Leone is a significant producer of diamonds, particularly larger stones. Extensive alluvial workings are found throughout the Kono Diamond Field, which produces 300,000-400,000 carats per year at an average value of greater than US$200 per carat. The recently reactivated Koidu diamond mine, held by 40% each by Energem Resources (ENM-T) and private company Magma Diamond Resources, has produced about 9 million carats, or roughly two-thirds of Sierra Leone’s diamond production to date.

After several years of political unrest and violent civil war, the country has seen a return to foreign investment in mineral exploration.

ASX-listed Crown Diamonds reports 296-million shares outstanding and trades in the Aus$0.23 per share range, resulting in a market capitalization of about Aus$68-million.

Mano River reports 210 million shares outstanding, as of the latest figures, giving the company a market capitalization of about $53-million at its present trading range of 25 per share. Mano also has a listing on the London Stock Exchange – Alternative Investment Market (AIM).