Mano River to start mining gold in Liberia in 2008

Mano River Resources (MNO-V) has released a positive feasibility study for the New Liberty gold project in western Liberia, 100 km northwest of the capital, Monrovia.

Production is expected to start during the first half of 2008 at a projected rate of 99,000 oz. in the first year, averaging 84,000 oz. per year over the first five years.

Mano River shares were up more than 20% Wednesday, to 25 apiece on a volume of 55,000.

The feasibility study, which focused solely on gold mineralization suitable for open-pit mining, found proven and probable reserves of 4.6 million tonnes grading 3.9 grams gold per tonne. Average annual production is estimated at 68,000 oz. over 8 years from three pits Larjor, Kinjor and Marvoe.

The company plans to do further studies to extend the life of the operation through underground exploitation of the balance of the measured and indicated resource that can’t be economically recovered in the open pits.

A 2005-2006 drilling project found that New Liberty had a gold resource of 1.4 million oz. of gold — 13.5 million tonnes of measured and indicated resources grading 3.18 grams gold per tonne.

Underground mining is expected to start in year five to allow for deeper exploration drilling for stope definition. As well, Mano River is looking into other gold prospects in the area such as its Weaju property, which is within trucking distance of New Liberty.

Mano River holds 100% of the project, which is subject to a 10% free carried interest and a 3% production royalty, both held by the government.

The feasibility study put the internal rate of return at 72% for US$600 per oz. gold, assuming 70% debt financing at 6% interest over 5 years. The capital cost estimate is US$59 million, to be paid back in 2.5 years with an operating cost of US$35 per tonne and a break-even gold price of US$452.

New Liberty’s stripping ratio is projected at 11.5 to 1 and the plant will be able to process up to 600,000 tonnes of ore per year. The metallurgy of the deposit, which has a recovery rate of 93%, is very simple and does not require special treatment. A conventional crushing and ball mill circuit with a split stream from the cyclone underflow will deliver the coarse gold fraction to a centrifugal concentrator, with the concentrate upgraded on a shaking table and then sent to a direct smelt.

This process will recover almost half the gold, followed by conventional carbon-in-leach treatment. Tailings will be deposited in a valley fill tailings facility about 1 km from the plant. The area gets a lot of rain up to 3 metres per year, so the tailings damn and the Marvoe Creek diversion are being designed for a 50-year flood event.

Liberia does not have a power grid. Instead, the company is investigating the possibility of “mini-hydroelectric power” as it will be relying on a heavy fuel oil power plant.

Mano River is a Vancouver-based company, but the exploration office is located in London, England. The company is focused on gold, diamond and iron ore deposits in the West African Mano River Union countries of Sierra Leone, Liberia and Guinea. It was formed in 1998 by a reverse takeover involving the sale of Mano River Resources Ltd before it eventually became Mano River Resources Inc.