The Feasibility Study for the open pit phase of the New Liberty Gold Project shows robust economics at current gold prices.

• Internal Rate of Return of 72% at $600 gold and assuming 70% debt financing at 6% over 5 years

• Projected 99,000 oz gold production in year one of operation, and averaging 84,000 oz/year over the first five years

• Start-up anticipated commencing H1, 2008, depending on permitting and financing

• Highly favourable metallurgy assists in keeping processing costs down

• Studies to be initiated on underground exploitation of the remaining resource aimed at extending mine life

Mano River Resources announced Wednesday the results of the Feasibility Study over its New Liberty Gold Project in western Liberia.

The Study was undertaken by independent consultants MDM Engineering Pty Ltd of Johannesburg, South Africa, together with Lower Quartile Solutions Pty Ltd of Perth, Australia. The tailings dam design was carried out by Golder Associates.

Subject to arranging production financing and obtaining required permits, production is anticipated to commence during the first half of 2008, the company said.

The New Liberty Project is located some 100km north west of Monrovia, the capital of Liberia, and is held as to 100% by Mano, subject to a 10% free carried interest and a 3% production royalty, both held by the government.

In October 2006, Mano announced that, as a result of the 2005/06 drilling campaign, the estimated gold resource at New Liberty had been increased to 1.4 million ounces (13.533 million tonnes of measured and indicated resources grading 3.18 g/t).

The proven and probable reserve figures should be considered in the context of this Feasibility Study having focused on the open-pittable gold mineralisation only, Mano said.

Studies will commence shortly on the scope for extending the life of the operation through underground exploitation of as much as possible of the balance of the measured and indicated resource, not economically recoverable in the open pits.

Dr Tom Elder, Mano's President and CEO, said: "The deposit displays simple geology, good grinding characteristics (i.e. the ore is relatively soft) and excellent metallurgy, resulting in high overall metal recovery of 93%.

Once the open pit phase of operation is completed, underground mining, probably via ramp access, of as much as possible of the balance of the resource should offer the scope to extend the life of the operation beyond the present 8 years.

"Studies of this potential are about to commence. In addition, within truckable distance, there are prospects such as Weaju which may have the potential to provide further feed to the New Liberty plant."

The base case for the Feasibility Study involves open pit contract mining from three pits, Larjor, Kinjor and Marvoe, over an initial estimated mine life of eight years. The average stripping ratio is 11.5 to 1.

Because the deposit exhibits very simple metallurgy and therefore does not require special treatment, processing will be via a gravity circuit, recovering almost half of the gold, followed by conventional Carbon-in-Leach (CIL) treatment, the company said.

The plant has a design capacity of 600,000 tonnes per annum. Metallurgical testwork indicates gold recovery of the order of 93%.

The initial Capital Cost of $59 million includes the sum of $4.7 million in pre-production operating expenditure, while operating costs average $35 per tonne of ore.

On the basis of anticipated 70% debt financing and a gold price of $600 per ounce, the post tax and royalty Internal Rate of Return (IRR) of the project is 72%. The breakeven gold price (at which the IRR is zero) for this base case is $452.

Mining will be by conventional open pit, on a contract basis. Bids are presently being considered from a short list of mining contractors.

Because of the straightforward metallurgy of the gold mineralisation, the processing plant comprises a conventional crushing and ball mill circuit with a split stream from the cyclone underflow delivering the coarse gold fraction to a centrifugal concentrator, with the concentrate being upgraded on a shaking table and then to direct smelt. The balance of the plant comprises a conventional CIL circuit, with tailings being deposited in a valley fill tailings facility situated less than one kilometre from the plant complex.

The metallurgical testing has demonstrated lower than average consumptions of cyanide and lime, and also low ball consumption due to the low abrasion index, all factors positively affecting operating costs.

The area is one of high rainfall, averaging +/-3 metres per annum, and the tailings dam and Marvoe Creek diversion are being designed for a 50 year flood event. Due to the lack of a power grid in Liberia, a Heavy Fuel Oil power plant has been included in the design and capital cost estimate.