RNS Number : 0226W
Mano River Resources Inc
05 June 2008
NEWS RELEASE
5 June 2008
TSX-V: MNO
AIM: MANA
MANO RIVER RESOURCES INC
PUBLICATION OF 1Q 2008 ACCOUNTS
The Board of Mano River Resources Inc. is pleased to release the Accounts of the Company for the financial quarter ended March 31, 2008
together with the Management Discussion & Analysis.
On behalf of the Board of Mano River Resources Inc.
Luis da Silva
President and CEO
For further information on Mano River Resources Inc. and its exploration programme, you are invited to visit the Company's website at
www.manoriver.com or contact one of the following:
Mano River Resources Inc.
Luis da Silva, CEO +44 (0) 20 7299 4212
GMP Securities Europe LLP
James Hannon +44 (0) 20 7647 2803
Panmure Gordon (UK) Limited
Edward Farmer +44 (0) 20 7614 8384
Pelham PR
Charles Vivian/James MacFarlane +44 (0) 20 7743 6670 / 6375
The TSX Venture Exchange has not reviewed and does not take responsibility for the
adequacy or accuracy of this release
Interim Consolidated Financial Statements
Mano River Resources Inc.
For The Three Months Ended March 31, 2008
and Three Months ended April 30, 2007
(Stated in U.S. Dollars)
(Unaudited)
MANO RIVER RESOURCES INC.
6th Floor, 890 West Pender Street, Vancouver, B.C. V6C 1J9
Telephone: (604) 689-1700 Fax: (604) 687-1327
________________________________________
NOTICE TO READER
In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its
auditors have not reviewed the unaudited interim consolidated financial statements for the three months ended March 31, 2008.
The accompanying unaudited interim financial statements of the Company have been prepared by and are the responsibility of the Company's
management.
Mano River Resources Inc.
Consolidated balance sheet
As at March 31, 2008
(Stated in U.S. dollars)
Three months Year
ended ended
March 31, December 31,
2008 2007
$ $
Assets
Current assets
Cash and cash equivalents 5,188,940 4,100,187
Amounts receivable 355,524 296,591
Due from joint venture partners 112,281 112,281
(Note 3)
5,656,745 4,509, 059
Investments (Note 4) 230,590 184,090
Property, plant and equipment 1,937,574 2,002,120
Resource properties (Note 5) 8,888,592 8,888,592
Deferred exploration costs (Note 5) 31,903,641 29,918,050
48,617,142 45,501,911
Liabilities
Current liabilities
Accounts payable and accrued 1,129,500 1,010,169
liabilities
Interest payable on convertible 68,794 181,296
debenture (Note 8)
Due to related parties (Note 7) 255,367 174,367
Due to joint venture partners (Note 913,000 274,350
3)
2,366,661 1,640,182
Convertible debenture (Note 8) 1,873,317 2,260,738
Total Liabilities 4,239,978 3,900,920
Non-controlling interest (Note 9) 9,272,804 7,147,317
Shareholders' equity
Share capital (Note 6) 34,596,114 34,596,114
Equity component of convertible 2,715,413 2,637,802
debenture (Note 8)
Contributed surplus 3,219,220 1,904,465
Accumulated other comprehensive (21,755) (21,755)
loss
Translation reserve 3,973 -
Deficit (5,408,605) (4,662,952)
Total shareholders' equity 35,104,360 34,453,674
Total Liabilities, non-controlling 48,617,142 45,501,911
interest and shareholders' equity
Nature of operations and continuation of business (Note 1)
Approved by the Board
(Signed) Luis da Silva
Luis da Silva, Director
(Signed) Bevan Metcalf
Bevan Metcalf, Chief Financial
Officer
Mano River Resources Inc.
Consolidated statement of income/(loss) and comprehensive income/(loss)
For the three months ended March 31, 2008
(Stated in U.S. dollars)
Three months Three months
Ended Ended
March 31, April 30,
2008 2007
$ $
Expenses
Administrative and office expenses 189,043 1,854
Directors fees 153,027 8,500
Foreign exchange gain 4,971 (17,810)
Management fees 158,329 72,045
Interest on convertible debenture 94,219 -
Professional fees (Note 10) 559,927 98,869
Stock-based compensation 1,314,755 104,554
Transfer agent and filing fees 23,616 17,193
Depreciation 151,746 -
2,649,633 285,205
Dilution gain on shares issued by (1,387,780) -
controlled company
Unrealised gain on convertible (309,810) -
debenture
Interest income (18,225) ( 7,772)
Loss before non-controlling interest (933,818) (277,433)
Non-controlling interest 188,165 -
Loss and comprehensive loss (745,653) (277,433)
Basic and diluted loss per share (0.002) (0.001)
Basic and diluted weighted average
number of shares outstanding 297,810,818 296,440,706
Mano River Resources Inc.
Consolidated statements of cash flows
For the three months ended March 31, 2008
(Stated in U.S. dollars)
Three months Three months
Ended Ended
March 31, April 30,
2008 2007
$ $
Operating activities
Net loss (745,653) (277,433)
Items not involving cash:
Dilution gain on shares (1,387,780) -
issued by controlled company
Non-controlling interest (188,165) -
Stock-based compensation 1,314,755 104,554
Interest on convertible 94,219 -
debenture
Unrealised loss on convertible (309,810) -
debt
Depreciation of fixed assets 151,746 -
Change in non-cash working
capital items:
Amounts receivable (23,498) (84,151)
Due from joint venture - 104,250
partners
Accounts payable and accrued 119,329 (108,301)
liabilities
(974,857) (261,081)
Investing activities
Deferred exploration costs, net of related accounts (1,393,441) (667,529)
payable
Purchase of capital assets (87,200) -
(1,480,641) (667,529)
Financing activities
Issuance of share capital, net - 437,836
of share issue costs
Share subscriptions - 683,725
Interest paid on convertible (206,721) -
debenture
Proceeds from issue of shares 3,665,998 -
of subsidiary
Due to related parties 81,000 64,410
3,540,277 1,185,971
Foreign exchange differences
on translation of overseas 3,974 -
operations
Net cash inflow 1,088,753 257,361
Cash, beginning of period 4,100,187 1,185,520
Cash, end of period 5,188,940 1,442,881
Supplemental disclosure of financing and investing activities:
(1) During the period ended March 31, 2008 1,949,994 common shares of Stellar Diamonds Ltd., were issued at �1 each for gross proceeds
of �1,949,994 ($3,890,998). Associated costs charged to shareholders equity amounted to $225,000.
(2) During the period ended April 30, 2007 the Company issued 2,100,000 common shares on exercise of stock options at a price of
Cdn$0.11 per share and 100,000 common shares at a price of Cdn$0.10 per share. Cash proceeds of $198,276 for exercise of these stock options
were received by the Company on January 31, 2007 and recorded as subscriptions under shareholders' equity.
Mano River Resources Inc.
Notes on consolidated financial statements
For the three months ended March 31, 2008
1. Nature of operations
Mano River Resources Inc. ("Mano River" or "the Company") commenced operations on July 10, 1996 and is engaged in the acquisition,
exploration and development of gold, iron and diamond properties. The Company is in the development stage and has no source of cash flows
other than loans from related parties or equity offerings.
These consolidated financial statements are prepared on a going concern basis which assumes that the Company will be able to realise
assets and discharge liabilities in the normal course of business. The Company's ability to continue on a going concern basis depends on its
ability to successfully raise additional financing. If the Company cannot obtain additional financing the Company may be forced to realise
its assets at amounts significantly lower than the current carrying value.
Uncertainty also exists with respect to the recoverability of the carrying value of certain resource properties. The ability of the
Company to realise its investment in resource properties is contingent upon resolution of the uncertainties and continuing confirmation of
the Company's title to the resource properties.
In August 2007, the Company changed its fiscal year end from January 31, to December 31, effective as of December 31, 2007.
2. Significant accounting policies
These financial statements have been prepared in accordance with generally accepted accounting principles in Canada and reflect the
following significant accounting policies. The United States dollar has been identified as the Company's currency of measurement and is used
for external reporting purposes.
(a) Principles of consolidation
These financial statements include the accounts of Mano River Resources Inc. and its principal subsidiaries, Mano Gold Investments Ltd.
(formerly Mano River Resources Ltd.) (including sub-group Mano River Iron Ore Holdings Ltd.), and Mano Diamonds Ltd.
African Iron Ore Ltd. is 80% owned by Mano. One-half of the remaining 20% is held by Eastbound Resources Ltd., a company controlled by a
director of the Company.
The financial statements of entities which are controlled by the Company through voting equity interests, referred to as subsidiaries,
are consolidated. Variable interest entities ("VIEs"), which include, but are not limited to, special purpose entities, trusts,
partnerships, and other legal structures, as defined by the Accounting Standards Board in Accounting Guideline ("AcG") 15, Consolidation of
Variable Interest Entities ("AcG 15"), are entities in which equity investors do not have the characteristics of a "controlling financial
interest" or there is not sufficient equity at risk for the entity to finance its activities without additional subordinated financial
support. VIEs are subject to consolidation by the primary beneficiary who will absorb the majority of the entities' expected losses and/or
expected residual returns. As of March 31, 2008, the Company does not hold an interest in any VIEs.
All intercompany balances and transactions have been eliminated upon consolidation.
The shares not legally owned by the Company in the listed subsidiaries, other than African Iron Ore (Liberia) Ltd., are held by one
third party company. This third party has no beneficial interest in the shares and is holding the shares for the Company's benefit until the
Company and the third party agree on their ultimate distribution. As the Company retains the beneficial interest in these shares no
non-controlling interest exists at March 31, 2008.
(b) Non-controlling interests
Non-controlling interests exist in less than wholly-owned subsidiaries of the Company and represent the outside interest's share of the
carrying values of the subsidiaries. When the subsidiary company issues its own shares to outside interests, a dilution gain or loss arises
as a result of the difference between the Company's share of the proceeds and the carrying value of the underlying equity.
(c) Cash
Cash and cash equivalents include cash, and those short-term money market instruments that are readily convertible to cash with an
original term of less than 90 days.
(d) Property, plant and equipment
Property, plant and equipment is comprised of office furniture, automobiles and various equipment used in the field, that are stated at
cost and amortised at 30% per annum on a declining balance basis.
(e) Long-term investments
Investments are recorded at cost, subject to a provision for any impairment that is determined to be other than temporary.
(f) Resource properties and deferred exploration costs
The Company follows the method of accounting for its mineral properties whereby all costs related to acquisition, exploration and
development are capitalised by property. The carrying value of pre-production and exploration properties is reviewed periodically and either
written off when it is determined that the expenditures will not result in the discovery of economically recoverable mineral reserves or
transferred to producing mining property, plant and equipment when commercial development commences.
The recoverability of amounts shown for pre-production and exploration properties is dependent upon the discovery of economically
recoverable mineral reserves, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to finance
the development of the properties and on the future profitable production or proceeds from the disposition thereof.
The success and ultimate recovery of the Company's exploration costs of its mineral exploration properties is influenced by significant
financial risks, legal and political risks, commodity prices, and the ability of the Company to discover economically recoverable mineral
reserves and to bring such reserves into future profitable production.
(g) Measurement uncertainty
The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant balances and
transactions affected by management estimates include the valuation of investments, resource properties, deferred exploration costs, future
income tax and stock-based compensation. Actual results could differ from those estimates.
The amounts used to estimate fair values of stock options issued are based on estimates of future volatility of the Company's share
price, expected lives of the options, expected dividends to be paid by the Company and other relevant assumptions.
By their nature, these estimates are subject to measurement uncertainty and the effect of changes in such estimates on the consolidated
financial statements of future periods could be significant.
(h) Loss per share
The basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the
year. The diluted loss per share reflects the potential dilution by including other common share equivalents, such as
outstanding stock options and share purchase warrants, in the weighted average number of common shares outstanding during the year.
Options and warrants as disclosed in Note 6 are anti-dilutive and therefore have not been taken into account in the per share calculations.
(i) Foreign currency translation
The Company's foreign currency transactions and the financial position and results of operations of the Company's integrated
subsidiaries are translated into U.S. dollars using the temporal method. Under this method, monetary assets and liabilities are translated
at the rate in effect at the balance sheet date. Other balance sheet items, revenues and expenses are translated at the rates prevailing on
the respective transaction dates.
(j) Stock-based compensation
The Company follows Canadian Institute of Chartered Accountants Handbook Section 3870, Stock-Based Compensation, which requires that all
stock-based awards made to non-employees and employees be measured and recognised using a fair value based method. Accordingly, the fair
value of options at the date of grant is accrued and charged to operations, with an offsetting credit to contributed surplus, on a
straight-line basis over the vesting period. If the stock options are ultimately exercised, the applicable amounts of contributed surplus is
transferred to share capital.
(k) Joint ventures
The Company has entered into certain joint venture agreements whereby the Company earns or allows a third party to earn an interest in
certain mineral properties. These joint venture agreements generally provide for the acquiring party to incur exploration costs to earn an
interest. Currently certain joint ventures in which the Company has an interest are used to hold the property interest solely; while certain
others have operations or exploration programs conducted by the joint venture.
(l) Income taxes
The Company accounts for income taxes whereby future income tax assets and liabilities are computed based on differences between the
carrying amount of assets and liabilities on the balance sheet and their corresponding tax values using the enacted income tax rates at each
balance sheet date. Future income tax assets also result from unused loss carryforwards and other deductions. The valuation of future income
tax assets is reviewed annually and adjusted, if necessary, by use of a valuation allowance to reflect the estimated realisable amount.
3. Due to/from joint venture partners
During the three month period ended March 31, 2008, certain exploration and development expenditures were carried out by joint venture
partners.
The amount owing to Petra Diamonds as at March 31, 2008, who is the operator of the Kono joint venture diamond project in Sierra Leone, is
$617,000.
The amount owing to Trans-Hex as at March 31, 2008, who is the operator of the KPO joint venture project in Liberia, is $296,000.
As at March 31, 2008 the amount due from joint venture partners amounted to $112,281.
4. Investments
March 31,2008 April 30,
2007
$ $
Mifergui-Nimba 230,590 184,090
The Mifergui-Nimba investment consists of 8,654 shares representing a 3.7% interest in a Guinean company that holds an interest in a
mining license over a Guinean iron ore property. The company is a private company with no available market value. Management has reviewed
the carrying value at March 31, 2008 and do not consider that there has been any indication of impairment.
5. Resource properties and deferred exploration costs
March 31, April 30,
2008 2007
$ $
Acquisition costs
Liberia, West Africa
Bea 210,000 210,000
Kpo 110,000 110,000
Sierra Leone, West Africa
Pampana, Sonfon and Nimini South 1,695,000 1,695,000
Guinea, West Africa
Missamana/Gueliban 1,940,000 1,940,000
Bouro/ Mandala 4,933,592 -
Closing balances 8,888,592 3,955,000
March 31, April 30,
2008 2007
Deferred Exploration Expenditures $ $
Feasibility - 4,992
Assays incl. shipment 32,292 19,865
Communications incl. equipment 32,543 19,608
Community relations 46,389 48,764
Consultants 104,069 31,952
Data, images, reports and maps 5,119 4,700
Drilling 353,497 -
Geologists support 8,457 18,905
Infrastructure incl. roads and bridges 44,077 14,135
Licenses and permit fees 1,832 20,542
Project/field office costs, incl. field 163,362 76,874
equipment
Reconnaissance and geochemical - 13,117
Salaries and wages 483,338 293,623
Subsistence - 37,117
Transportation incl. vehicles 118,466 63,338
Kono joint venture exploration expenditure 357,446 -
Trans-Hex joint venture exploration expenditure 281,204 -
Transfer to Mifergui-Nimba investment (46,500) -
Net expenditures during the period 1,985,591 667,532
Balance, Beginning of the period 29,918,050 23,391,391
Balance, end of period 31,903,641 24,058,923
6. Share capital
(a) Authorised
Unlimited number of common shares without par value
(b) Issued
Shares Amount
$
Balance at January 31, 2005 213,405,818 21,461,793
Shares issued on private placement (net of
costs) 40,000,000 7,180,800
Shares issued on exercise of warrants 12,500 894
Balance at January 31, 2006 253,418,318 28,643,487
Shares issued on private placement (net of
share issue costs) 39,562,500 5,502,741
Shares issued on exercise of stock options 140,000 12,050
Balance at January 31, 2007 293,120,818 34,158,278
Shares issued on exercise of stock options 4,690,000 437,836
Balance at December 31, 2007 & March 31, 2008 297,810,818 34,596,114
There were no share issues during the three month period ended March 31, 2008 in the shares of the Company. However, during the quarter
ended March 31, 2008 1,949,994 common shares of Stellar Diamonds Ltd., were issued at �1 each for gross proceeds of �1,949,994 ($3,890,998).
Associated costs charged to shareholders equity amounted to $225,000.
During the three month period ended April 30, 2007:
(a) 590,000 stock options were exercised at a price of CDN$0.10 per share and 15,000 options expired unexercised; and 2,000,000 stock
options were exercised at a price of CDN$0.11 per share and 1,000,000 options expired unexercised. Total option exercise proceeds were
$239,560.
(b) The Company issued 2,100,000 common shares on exercise of stock options at a price of Cdn$0.11 per share and 100,000 common
shares at a price of Cdn$0.10 per share. Cash proceeds of $198,276 for exercise of stock options were received by the Company on January 31,
2007 and recorded as subscriptions under shareholders' equity.
(c) The Company entered into private placement subscriptions for common shares of a wholly-owned subsidiary for gross proceeds of
�450,000 of which �100,000 was from GAIA Resources Fund Ltd. (a company related to Mano by virtue of a director in common). As at January
31, 2007, the Company had entered into private placement subscriptions for common shares of a wholly-owned subsidiary for gross proceeds of
�300,000 with GAIA Resources Fund Ltd. (a company related to Mano by virtue of director in common). As at April 30, 2007, the subsidiary's
common shares were not yet issued and proceeds received were recorded as share subscriptions.
(d) Stock options
As at March 31, 2008, the following stock options were outstanding:
Number of
stock options Exercise price
outstanding per share Expiry date
Cdn$
905,000 0.100 August 14, 2008
2,720,000 0.240 March 23, 2009
2,620,000 0.215 July 25, 2010
2,755,000 0.230 July 31, 2011
600,000 0.230 March 16,2012
300,000 0.230 May 20, 2012
9,045,000 0.230 January 17, 2013
18,945,000
7. Related party transactions
During the three month period ended March 31, 2008, the Company incurred billings of $81,000 (2007: $79,187) from related parties for
management fees and professional services. All transactions with related parties have occurred in the normal course of operations. As at
March 31, 2008, the amount due to related parties totaled $255,367. These balances have no fixed terms of repayment and have arisen from the
accrued provision of services and reimbursable expenses.
8. Convertible debenture
On September 27, 2007 the Company entered into convertible subscription agreements to raise �2.3 million with certain lenders. The
convertible debenture is repayable on August 1, 2010 and bear interest at 9% per annum. The principal amount is convertible by the holders
into common shares of the Company at a conversion price of �0.14 per share at any time prior to maturity. Alternatively, the Company has the
option to demand the conversion after a period of three years, if the common shares of the Company have traded at an average 30% premium to
the conversion price for a minimum period of 21 trading days previous to the conversion date.
The convertible debenture issued has been segregated into its debt and equity components. The financial liability component,
representing the value allocated to the liability at inception, is recorded as a long-term liability. The remaining component, representing
the value ascribed to the holders' option to convert the principal balance into common shares, is classified in shareholders' equity as
"Equity component of convertible debenture". These components have been measured at their respective fair values on the date the convertible
debenture was originally issued.
As the debentures are convertible into common shares at the option of the holder, they have been accounted for in their component parts.
The Company has determined the fair value of the liability to make future payments of principal and interest to be $1,873,317 and the fair
value of the holders' conversion option to be $2,715,413. The fair value of the conversion option was based on using the Black-Scholes
option pricing model with the following assumptions: no dividends were paid, a weighted average volatility of the Company's share price of
172%, a weighted average annual risk free rate of 4.64% and an expected life of three years. The residual was allocated to the debt.
During the three months ended March 31, 2008, the Company incurred interest expense relating to the convertible debenture of $94,219. As
at March 31, 2008 the entire balance remained payable as the payment date had not yet been achieved.
9. Non-controlling interest
Stellar Diamonds Ltd.African ManoOwnership % Carrying value of net equity March 31,
Iron Ore Ltd. 64.06 80.00 24,739,9521,907,195 2008
$8,891,365
381,439
9,272,804
(a) The Company transferred its diamonds properties which had a book value of $8,276,081 to Stellar in exchange of 19,239,541 shares
of Stellar. The exchange was recorded at book value as it was a transaction between companies under common control. In 2007, Stellar
completed two private placements in order to raise funds to finance the development of its diamond interests. The private placements took
place in two tranches. In the first tranche 1,211,890 shares were issued at an effective price of �0.87 per share. 918,484 of those shares
were issued for cash consideration, raising proceeds of �800,000 (US$1,571,438), while the remaining 293,406 shares were issued to the
subscribers in consideration for forfeiture of certain benefits as a result of the diamond reorganization. In the second tranche 4,822,044
shares were issued at a price of �0.87 1 per share for proceeds of �4,200,000 (US$8,611,361). In addition, the Company issued 2,411,022
warrants with two year term and exercise price of �1.20 pence per share as well as 260,390 adviser's options with a two year term and exercise price of �0.871 per share. As a result of these shares
issuances by Stellar, the Company recorded a dilution gain of $6,207,005 in the year ended December 31, 2007.
In March 2008 Stellar issues a further 1,949,994 common shares at a price of �1 per share for gross proceeds of �1,949,994 ($3,890,998).
As a result of this issuance, the Company recorded a dilution gain of $1,387,780 in the period.
Gains on shares issued by affiliated companies arise when the ownership interest of the Company in a controlled entity is diluted as a
result of shares issuances of the investee company. The Company does not receive any cash proceeds (nor is required to make any payments)
from these transactions
(b) African Iron Ore Ltd., the holding company for the Company's iron ore interests, is 80% owned by Mano. One-half of the remaining
20% is held by Eastbound Resources Ltd., a company controlled by a director of the Company.
10. Professional fees
This includes $225,000 related to the listing of Stellar Diamonds on London's Alternative Investment Market.
11. Fair value of financial instruments
The Company's financial assets and liabilities are cash, amounts receivable, investments, accounts payable and due to related parties.
The fair values of these financial instruments are estimated to approximate their carrying values due to their immediate or short-term
nature except for investments whose fair value is not readily determinable. Due to the nature of the Company's operations, there is no
significant credit or interest rate risk. As at March 31, 2008, the Company held approximately $3,079,726 cash in bank accounts denominated
in U.K. pounds. The Company has taken no action to reduce its exposure to foreign currency risk.
12. Subsequent Events
Mano River Resources Inc. has signed certain agreements with Severstal's indirect, wholly owned Dutch subsidiary, Lybica Holding BV.
Severstal is a leading Russian steel and natural resources company.
Terms of the agreement:
* Under a subscription agreement, an indirect, wholly owned subsidiary of Severstal will make an equity investment of approximately
$4 million (U.S.) in Mano (at 10 pence per share) on May 29, 2008, with an option to make an additional equity investment in Mano (at 14
pence share) in due course.
* Under a share purchase and subscription agreement (SPSA), an indirect, wholly owned subsidiary of Severstal will pay $37.5 million
for a 61.5 per cent stake in the Putu Range iron ore project held under African Iron Ore Group Ltd. (AIOG), Mano's existing 80 per cent
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 financing of up to $15 million (U.S.). 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.
Terms of the non-brokered private placement:
* An indirect, wholly owned subsidiary of Severstal has entered into a subscription agreement with Mano and subject to the
satisfaction or waiver of various standard conditions to completion, will make an initial investment into Mano on May 29, 2008, by
subscribing for 20 million common shares at 10 pence per share, raising approximately $4 million (U.S.) prior to expenses. This represents a
premium of 13.7 per cent on the current share price as at May 22, 2008. Following the private placement, Severstal will hold 6.29 per cent
of Mano's issued share capital.
* In addition, 20 million warrants will be granted to an indirectly, wholly owned subsidiary of Severstal at an exercise price of 14
pence, which shall be exercisable at any time over a period of 18 months from the completion of the private placement. Upon exercise of all
the warrants, Severstal's holding in Mano would increase to 11.84 per cent (assuming no further issuances of common shares prior to that
time) and provide the company with a further $5.54 million (U.S.) in financing (at the exchange rate of $1.98 (U.S.) per pound sterling at
close of business on May 22, 2008).
* Severstal will also have the right to appoint a nominee to the board of directors of Mano for a period of three years from the
date of closing of the private placement, provided it maintains a shareholding of at least 5 per cent in Mano and thereafter provided it
maintains a shareholding of at least 10 per cent in Mano. Any nominee of Severstal shall be subject to approval by the TSX Venture Exchange.
* The private placement is subject to customary conditions to closing, including approval of the TSX Venture Exchange and completion
is expected to occur on May 29, 2008.
Application will be made for the new common shares issued to be admitted to the Alternative Investment Market and dealings in the new
common shares is expected to commence on Sept. 30, 2008, as the new common shares are subject to a four-month hold period under Canadian
securities laws and the policies of the TSX Venture Exchange.
The total number of issued common shares in the company, including the new common shares, will be 317,810,818 common shares.
Terms of the SPSA
The SPSA provides for the acquisition by an indirect, wholly owned subsidiary of Severstal of 25 per cent of the issued and outstanding
shares of AIOG for $12.5 million (U.S.) from Mano River Iron Ore Holdings Ltd., a wholly owned subsidiary of Mano, and a further 20 per cent
of the issued and outstanding shares of AIOG from the minority interest parties in AIOG, for $10.0 million (U.S.). It also provides for the
subscription by the Severstal subsidiary for new ordinary shares in AIOG for a total price of $15 million. These acquisitions and the
subscription will give the indirectly, wholly owned Severstal subsidiary a 61.5 per cent stake in AIOG on completion of the SPSA. Completion
is conditional on, amongst other things, the approval of the TSX Venture Exchange, the completion of satisfactory due diligence by Severstal
and Mano converting its exploration licence into an MDA.
The SPSA envisages the provision of a facility, by the indirectly, wholly owned Severstal subsidiary to AIOG, of up to $15 million
(U.S.) to finance the Putu Range iron ore project through to bankable feasibility study (BFS). The parties have undertaken to negotiate in
good faith and use reasonable endeavours to enter into such facility agreement within 60 days after completion of the SPSA.
Company's holding in AIOG will be 38.5 per cent at completion. The parties have agreed to negotiate in good faith and use reasonable
endeavours to enter into a shareholders' agreement to govern the relationship between the parties on or prior to completion.
The SPSA contains customary warranties and indemnities provided by Mano to the indirectly, wholly owned Severstal subsidiary.
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 four months from the date of the agreement being signed.
Mano River Resources Inc.
Management's Discussion and Analysis
For the three months ended March 31, 2008
The following discussion is management's assessment and analysis of the results and financial condition of Mano River Resources Inc.
(the "Company" or "Mano") and should be read in conjunction with the accompanying unaudited consolidated financial statements for the three
months ended March 31st, 2008 and related notes. Unless otherwise indicated all amounts are in US dollars. The date of this management's
discussion and analysis is May 30, 2008.
Additional information relating to the Company is available on SEDAR at www.sedar.com or on the Company's website at www.manoriver.com.
OVERVIEW PERFORMANCE
Description of Business
Mano River Resources Inc. is an exploration and development company engaged in the acquisition, exploration and development of gold, diamond
and iron ore properties in Africa. The Company, through its subsidiaries, holds interests in mineral properties located in Liberia, Sierra
Leone, Guinea and the Democratic Republic of Congo (DRC), with the aim of developing them to a stage where they can be exploited
economically or arranging joint ventures whereby other companies provide the funding and expertise for development and exploitation.
Forward-looking statements
Certain information included in this discussion may constitute forward-looking statements. Forward-looking statements are based on current
expectations and entail various risks and uncertainties. These risks and uncertainties could cause or contribute to actual results that are
materially different from those expressed or implied.
Trends
In the recent past metal prices have increased significantly driven by burgeoning demand from Asia. However, supply difficulties may occur
in the near future as a result of the increased demand. Both the capital expenditure required to build and sustain new production and the
cash operating costs necessary to produce from new operations have risen substantially over the past two years. Increases in unit costs are
attributable mainly to higher prices for energy, labour, equipment, consumables and contractors. Obtaining skilled geologists and other
technicians is still difficult leading to higher operating costs especially for exploration companies. The current credit crunch and its
affects on the financial markets has meant fewer companies are listing and although there is limited funding in the market, companies with
highly prospective projects can still attract the investment community, like Mano has achieved with the agreement announced with Serverstal.
Risks and Uncertainties
The Company is subject to a number of risk factors due to the fundamental nature of the exploration business in which it is engaged, the
countries in which it primarily operates and not least adverse movements in commodity prices. Mano seeks to counter such risks as far as
possible by selecting exploration areas on the basis of their recognised geological potential to host high grade gold, diamond and iron ore
deposits. The area of under-explored Archaean terrain on which the Company focuses in West Africa is also subject to a second significant
risk, namely, political. While the region has suffered serious civil unrest and armed conflict in the past (which is the basic reason why it
remained under-explored), conditions have improved markedly in recent years.
Industry
The Company is engaged in the exploration of mineral properties, an inherently risky business, and there is no assurance that an
economic mineral deposit will ever be discovered and subsequently put into production. Most exploration projects do not result in the
discovery of commercially mineable ore deposits. The geological focus of the Company is on areas in which the geological setting is well
understood by management. The technological tools employed by the Company are regularly updated to better focus our exploration efforts.
Reserve and resource estimates
The estimation of mineral resources and reserves is in part an interpretive process and the accuracy of any such estimates is a function
of the quality of available data, and of engineering and geological interpretation and judgement. No assurances can be given that the volume
and grade of reserves recovered, and rates of production achieved, will not be less than anticipated.
Gold and diamond prices
The price of gold is affected by numerous factors totally beyond the control of the Company, including central bank sales, producer
hedging activities, the exchange rate of the U.S. dollar relative to other major currencies, demand, political and economic conditions and
production levels. In addition, the price of gold has been volatile over short periods of time due to speculative activities. The prices of
diamonds, and other mineral products that the Company may explore for, also have the same or similar price risk factors.
Cash flows and additional funding requirements
Mano currently has no revenues from operations. The Company has historically entered into joint venture agreements with partners to
share the risks and the associated cost of exploration. In addition the Company has raised finance through the sale of equity capital and
the placement of unsecured convertible debentures. Although Mano has been successful in the past in obtaining financing, there is no
assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the
Company. The agreement announced on May 23 2008, with Severstal provides for an immediate cash injection of $4m into the Company. The
agreement provides for a total investment by Severstal of $37.5m into African Iron Ore Group Ltd, Mano's 80% owned subsidiary. There are a
number of conditions to be met before completion.
Exchange rate fluctuations
Fluctuations in currency exchange rates can significantly impact cash flows. The U.S. dollar exchange rate in particular has varied
substantially over time. While the Company has historically raised a large proportion of its equity financing in UK pounds most of the
Company's exploration costs, are denominated in U.S. dollars. Fluctuations in exchange rates may give rise to foreign currency exposure,
either favourable or unfavourable, which may impact financial results. Mano does not engage in currency hedging to offset the risk of
exchange rate fluctuation.
Environmental
Mano's exploration and development activities are subject to extensive laws and regulations governing environmental protection. The
Company is also subject to various reclamation-related requirements. The Company takes extremely seriously its commitment towards the local
communities and the environment. Its unwritten policy is to be proactive when operating in order to exceed all applicable environmental
regulations. A failure to comply may result in enforcement actions causing operations to cease or be curtailed, and may include corrective
measures requiring significant capital expenditures.
Laws and regulations
Mano's exploration activities are subject to local laws and regulations governing prospecting, development, production, exports, taxes,
labour standards, occupational health and safety, mine safety and other matters. Such laws and regulations are subject to change and can
become more stringent, and
compliance can therefore become more costly. The Company applies the expertise of its management, its advisors, its employees and
contractors to ensure compliance with current laws.
Title to mineral properties
While the Company has undertaken all the customary due diligence in the verification of title to its mineral properties, this should not
be construed as a guarantee of title. The properties may be subject to prior unregistered agreements or transfers and title may be affected
by undetected defects.
Competition
There is constant competition from other mineral exploration companies, with operations similar to those of the Company. Many of the
mining companies with which the Company competes have operations and financial resources substantially greater than those of Mano.
Dependence on management
Mano relies heavily on the business and technical expertise of its management team and there is little possibility that this dependence
will decrease in the near term. In 2007 changes were made to the management and the composition of the Board which should make the Company
stronger and better able to exploit the value of it exploration assets. Mano has no key-man insurance.
OPERATIONS - Overview
Mano's fundamental strategy is to unlock the value of its exploration assets. The Company has three divisions, namely gold, diamonds and
iron ore.
In 2007 all diamond assets were transferred into a new company named Stellar Diamonds Limited ("Stellar"). The intention is to list
Stellar on the London Stock Exchange's Alternative Investment Market (AIM). This process has been ongoing and the timing of the planned IPO
will be subject to market conditions. Mano currently owns 64.06% of Stellar Diamonds Ltd. On the ground the key focus is on progressing the
two near-term production projects at Kono in Sierra Leone and at Mandala in Guinea. The Kono joint venture project with Petra Diamonds has
moved into underground trial mining with good grades achieved to date. Valuations on the stones produced should be announced shortly. The
100% owned Mandala project, an alluvial deposit, has made considerable progress with a DMS plant now under construction.
The key asset in the Gold division is New Liberty Gold project (NLGM) in Liberia where Mano is currently drilling in order to expand the
resource. In January 2007 Mano announced the results of a Feasibility Study on an open pit operation at New Liberty Gold project. The
estimated gold resource at NLGM is 1.4 million ounces (13.533 million tonnes) of measured and indicated resource grading 3.18 g/t gold. A
2,700 metre drill programme was completed in March 2008 and Mano is currently waiting for the assay results from the laboratory.
A key objective of this programme is to test the mineralisation at depth. If the mineralisation is proven to extend at depth this should
have a significant impact on the overall resource base and an increase in the economics of an eventual mine. With the gold price at its
current levels gold assets such as NLGM are potentially very exciting.
The Company is currently targeting a deposit of up to 900 million tonnes at its 80% held Putu Iron Ore Project in southeastern Liberia.
With demand for iron ore, driven primarily by the Chinese market, the impact on prices has been significant. See "subsequent events" below
for details of the recent transaction affecting the Putu project.
Exploration Projects - Current Developments
GOLD
On January 22 2008, the Company reported it was starting a new drilling programme at the 100% owned NLGM. This programme which included
2,688m of resource/reserve delineation diamond drilling was completed in March 2008 and Mano is currently awaiting the results. This
programme included a number of deeper holes down to depths of 500-600 meters. The results of this programme will give a clear indication of
the continuity of the deposit at depth, and potentially change the project scope to an underground mining operation with a resultant
increase in the resource.
Soil/regolith sampling over Bea stream sediment anomalies has started over the Bea MDA. There was no activity on the Weaju project,
Liberia in the quarter.
Golden Star Resources identified a drill target in Sonfon South, Sierra Leone following a 3,846m drilling programme which reported
intersections of 7.40g/t gold over 9m and 2.35 g/t gold over 5m.
IRON ORE
The approximately 4,000m resource and grade delineation drilling programme, focused on the eastern zone of Mt Jideh at the 80% owned Putu
project, commenced at the end of the quarter. In addition, a series of widely spaced drill holes will be completed along the strike of the
Mt Jideh magnetic anomaly. The objective of the drilling programme will be to prepare an initial resource estimate in accordance with NI
43-101. In conjunction with the drilling programmes, bulk sampling and test work will be undertaken in order to evaluate grades, recovery
and ore characteristics.
In May 2008, Mano applied to convert its existing exploration licence on Putu into a 25 year Mineral Development Agreement (MDA) with
the Government of Liberia. This process is expected to take approximately four months.
DIAMONDS
On February 20 2008, the Company reported that its joint venture partner Petra issued its interim financial results and has made the
following statement regarding the Kono Joint Venture in which Stellar owns a 49% interest:
"Trial mining operations at the Kono project, a joint venture with Stellar Diamonds, continue with highly encouraging results at the Pol
K and Bardu test shafts. A total of 8,640 diamonds (760 carats) have now been recovered at Kono (bottom cut 1 mm). A parcel of 581 carats
has been shipped to South Africa and these are being cleaned, awaiting valuation."
In March 2008 BHP Billiton withdrew from the Sierra Leone diamond joint venture leaving Stellar with 100% control. BHP Billiton spent
over $3.3M on exploration on this joint venture but due to its nature and scale chose to exit. This means BHP Billiton retains no equity or
royalties in any of the projects and Stellar is at liberty to continue and if it so wishes find a new joint venture partner.
CORPORATE
On March 31 2008, the Company reported that its majority owned subsidiary Stellar Diamonds Ltd had completed a pre-IPO placing of
2,375,000 new ordinary shares of 1 pence each in Stellar at �1 per share, raising gross proceeds of �2.375 million. In addition, it is
announced that Guy Pas and Philippe Giaro have resigned from the Board of Stellar and that Denis Alexandrov will be appointed to the Stellar
Board as non-executive director, effective as of 1st April 2008. This will add greater independence to the Stellar Board going forward.
On February 14 2008, it was reported that Bevan Metcalf was appointed Chief Financial Officer.
On January 29 2008, the Company reported that, pursuant to its Stock Option Plan and subject to regulatory approval, it has granted
incentive stock options to certain directors, employees and consultants of the Company. The stock options were granted over a total of
9,045,000 common shares representing approximately 3.04% of the issued share capital of the Company at an exercise price of Cdn$0.20 per
share, exercisable for a period of five years. The stock options are exercisable immediately.
The allocation of stock options to directors was as follows: David Evans 2,000,000, Luis da Silva 600,000, Tom Elder 1,000,000, Guy Pas
750,000 and Malcolm Burne 1,000,000.
On January 21 2008, the Company reported the appointment of Lord Peter Daresbury as non-executive Chairman of its majority owned
subsidiary Stellar Diamonds Ltd.
SUBSEQUENT EVENTS
On May 23 2008, Mano River Resources Inc. signed certain agreements with Severstal's indirect, wholly owned Dutch subsidiary, Lybica
Holding BV. Severstal is a leading Russian steel and natural resources company.
Terms of the agreement:
* Under a subscription agreement, an indirect, wholly owned subsidiary of Severstal will make an equity investment of approximately
$4 million (U.S.) in Mano (at 10 pence per share) on May 29, 2008, with an option to make an additional equity investment in Mano (at 14
pence share) in due course.
* Under a share purchase and subscription agreement (SPSA), an indirect, wholly owned subsidiary of Severstal will pay $37.5 million
for a 61.5 per cent stake in the Putu Range iron ore project held under African Iron Ore Group Ltd. (AIOG), Mano's existing
80-per-cent-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 financing of up to $15 million (U.S.). 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.
Terms of the non-brokered private placement:
* An indirect, wholly owned subsidiary of Severstal has entered into a subscription agreement with Mano and subject to the
satisfaction or waiver of various standard conditions to completion, will make an initial investment into Mano on May 29, 2008, by
subscribing for 20 million common shares at 10 pence per share, raising approximately $4 million (U.S.) prior to expenses. This represents a
premium of 13.7 per cent on the current share price as at May 22, 2008. Following the private placement, Severstal will hold 6.29 per cent
of Mano's issued share capital.
* In addition, 20 million warrants will be granted to an indirectly, wholly owned subsidiary of Severstal at an exercise price of 14
pence, which shall be exercisable at any time over a period of 18 months from the completion of the private placement. Upon exercise of all
the warrants, Severstal's holding in Mano would increase to 11.84 per cent (assuming no further issuances of common shares prior to that
time) and provide the company with a further $5.54 million (U.S.) in financing (at the exchange rate of $1.98 (U.S.) per pound sterling at
close of business on May 22, 2008).
* Severstal will also have the right to appoint a nominee to the board of directors of Mano for a period of three years from the date of
closing of the private placement, provided it maintains a shareholding of at least 5 per cent in Mano and thereafter provided it maintains a
shareholding of at least 10 per cent in Mano. Any nominee of Severstal shall be subject to approval by the TSX Venture Exchange.
* The private placement is subject to customary conditions to closing, including approval of the TSX Venture Exchange and completion
is expected to occur on May 29, 2008.
Application will be made for the new common shares issued to be admitted to the Alternative Investment Market and dealings in the new
common shares is expected to commence on Sept. 30, 2008, as the new common shares are subject to a four-month hold period under Canadian
securities laws and the policies of the TSX Venture Exchange.
The total number of issued common shares in the company, including the new common shares, will be 317,810,818 common shares.
Terms of the SPSA
The SPSA provides for the acquisition by an indirect, wholly owned subsidiary of Severstal of 25 per cent of the issued and outstanding
shares of AIOG for $12.5 million (U.S.) from Mano River Iron Ore Holdings Ltd., a wholly owned subsidiary of Mano, and a further 20 per cent
of the issued and outstanding shares of AIOG from the minority interest parties in AIOG, for $10.0 million (U.S.). It also provides for the
subscription by the Severstal subsidiary for new ordinary shares in AIOG for a total price of $15 million. These acquisitions and the
subscription will give the indirectly, wholly owned Severstal subsidiary a 61.5 per cent stake in AIOG on completion of the SPSA. Completion
is conditional on, amongst other things, the approval of the TSX Venture Exchange, the completion of satisfactory due diligence by Severstal
and Mano converting its exploration licence into an MDA.
The SPSA envisages the provision of a facility, by the indirectly, wholly owned Severstal subsidiary to AIOG, of up to $15 million
(U.S.) to finance the Putu Range iron ore project through to bankable feasibility study (BFS). The parties have undertaken to negotiate in
good faith and use reasonable endeavours to enter into such facility agreement within 60 days after completion of the SPSA.
Company's holding in AIOG will be 38.5 per cent at completion. The parties have agreed to negotiate in good faith and use reasonable
endeavours to enter into a shareholders' agreement to govern the relationship between the parties on or prior to completion.
The SPSA contains customary warranties and indemnities provided by Mano to the indirectly, wholly owned Severstal subsidiary.
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 four months from the date of the agreement being signed.
SELECTED FINANCIAL INFORMATION
The following selected annual financial information is derived from the audited consolidated financial statements for the three most
recently completed financial years and is prepared in accordance with Canadian generally accepted accounting principles ("GAAP").
Years ended:
US Dollars December 31 January 31 January 31
2007 2007 2006
Interest income 148,041 53,181 117,927
Dilution gain 6,207,005 - -
Net income/(loss) 4,017,642 (959,609) (1,348,265)
Basic and diluted 0.014 (0.004) (0.006)
income/(loss) per
Share
Stock option compensation expense 190,003 513,361 397,829
Working capital *2,868,877 428,368 3,015,165
Total assets 45,501,911 28,866,715 22,287,420
Total exploration expenditures* 6,526,656 8,443,801 4,291,377
* After deducting negative goodwill
SUMMARY OF SELECTED QUARTERLY INFORMATION
The following is the selected financial information of the Company for the last eight quarters: (unaudited)
US Dollars March 31 December 31 October 31 July 31
2008
2008 2007 2007 2007
Interest income 18,225 79,784 47,500 12,985
Dilution gain 1,387,780 6,207,005 - -
Net income/(loss) (745,653) 5,257,878 (489,597) (473,206)
Basic and diluted (0.002) 0.018 (0.001) (0.001)
income/(loss) per share
Total assets 48,617,142 45,501,911 46,105,356 46,672,577
April 30 January 31 October 31 July 31
2007 2007 2006 2006
Interest income 7,772 14,496 13,322 7,229
Dilution gain - - - -
Net Income/(loss) (277,433) (139,287) (486,319) (199,679)
Basic and diluted (0.001) (0.001) (0.001) (0.001)
income/(loss) per share
Total assets 29,813,909 28,866,715 27,404,088 27,545,680
RESULTS OF OPERATIONS
During the first quarter ended March 31, 2008, the Company realised a net loss of $745,653, or $0.002 cents per share as compared to a
loss of $277,433 or $0.001 per share in the quarter ended April 30, 2007. A "dilution gain" was recognised in the quarter amounting to
$1,387,780 arising from the issue of further shares in majority owned Stellar Diamonds Ltd to private investors at a price higher than the
initial price at which the Company transferred its diamond properties to Stellar Diamonds Ltd in 2007. Expenses in the quarter at $2,649,633
are $2,364,428 higher than quarter last year. This increase has arisen for a number of reasons. First, certain costs, namely, the interest
on the convertible debenture of $94,219 and depreciation of $151,746, did not feature in expenses in quarter one last year. In addition
stock based compensation of $1,314,755 (2007:$104,554); directors and management fees of $311,356 (2007:$80,545); professional fees of
$559,927 (2007:$98,869) and administrative expenses of $189,043 were all significantly higher than quarter one last year. Professional fees included expenses related to the proposed listing of
Stellar Diamonds Ltd on London's Alternative Investment Market. Office expenses include the cost of the London office not in the figures
last year. Directors and management fees are higher as a result of the reorganisation of the board and the recruitment of key new personnel
in 2007. Income from interest during the quarter is $18,225 (2007: $7,772) and an unrealised gain on the convertible debentures was
recognised in the period of $309,810.
BALANCE SHEET, LIQUIDITY AND CAPITAL RESERVES
Resource properties amounted to $8,888,592 and are unchanged from December 31, 2007. During the three months ended March 31, 2008 the
Company incurred $1,985,591 of deferred exploration expenditure on its mineral properties as compared to $667,532 during quarter one last
year. The significant increase was mainly due to the activity at NLGM. The Company had property, plant and equipment with a net book value
of $1,937,574 mainly comprising plant and equipment associated with the Company's diamond operations.
The Company had working capital at March 31 2008 of $3,290,084 compared with $2,868,877 at 31 December 2007. The increase in working capital
of $421,207 is due to higher cash and cash equivalents of $5,188,940 up $1,088,753 on the year end figure. The higher cash and cash
equivalents is partly off-set by higher amounts owing to joint venture partners of $913,000 versus $274,350 at the end of December 2007. As
at March 31, 2008, the Company had total assets of $48,617,142 as compared with $45,501,911 at December, 2007.
During the quarter Mano's subsidiary, Stellar Diamonds Ltd completed a Private Placement in order to raise funds to finance the
development of its diamond interests. The Private Placement involved the issue of 1,949,994 common shares at a price of �1 per share raising
�1,918,484 of gross proceeds ($3,890,998). The non-controlling interest at the end of March 2008 increased from $7,147,317 to $9,272,804,
the majority of this being Stellar Diamonds Ltd of $8,891,365. Subsequent to the quarter end the Company entered into a significant
transaction to finance its Putu Iron ore project.
As at March 31, 2008 the outstanding share options are outlined below. This includes 9,045,000 share options issued during the quarter.
Number ofCommon Shares Exercise price Expiry date
Per share
(Cdn$)
0.100 August 14, 2008
905,000
$
0.240 March 23, 2009
2,720,000
$
0.215 July 25, 2010
2,620,000
$
0.230 July 31, 2011
2,980,000
$
0.230 March 16, 2012
600,000
$
0.230 May 31, 2012
300,000
$
0.200 Jan 23, 2013
9,045,000
$
18,945,000
Cash used for operating activities during the three months ended 31 March 2008, is $974,857 (2007: ($261,081) after adjusting for the
non-cash activities. Cash outflow on investing activities included $1,985,591 spent on exploration projects off-set by the increase in
amounts owing to joint venture partners. The additional exploration activity versus last year has been mainly at the New Liberty Gold
project where a resource delineation programme was completed. The comparative figure spent on investing activities during quarter one 2007
was $667,529. Cash inflow from financing activities for the period of $3,540,277 is $2,354,306 higher than quarter one last year due to the
private placement of shares in Stellar Diamonds Ltd.
OTHER INFORMATION
Outstanding share data
The Company is authorised to issue an unlimited number of common shares without par value. As at May 30, 2008 there were 297,810,818
common shares outstanding.
Off balance sheet arrangements
The Company does not have any off-balance sheet arrangements and does not contemplate having them in the foreseeable future.
Related party transactions
During the three months ended March 31, 2008, the Company incurred billings of $81,000 (April 30,2007 - $79,187) from related parties
for management fees, directors fees and professional services. All transactions with related parties have occurred in the normal course of
operations. As at March 31, 2008, the amount due to related parties totaled $255,367. These balances have no fixed terms of repayment and
have arisen from the accrued provision of services referred to above and reimbursable expenses.
Disclosure controls and procedures
Management is responsible for establishing and maintaining a system of controls and procedures over the public disclosure of financial
and non-financial information regarding the Company. Management is also responsible for the design and maintenance of effective internal
control over financial reporting to provide reasonable assurance regarding the integrity and reliability of the Company's financial
information and the preparation of its financial statements in accordance with the Canadian generally accepted accounting principles.
Management maintains appropriate information systems, procedures and controls to ensure integrity of the financial statements and maintains
appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and
reliable.
Management of the Company, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls
and procedures of our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within Mano River have been detected.
However, given the nature of the business and geographical displacement, the management is committed to continuously mitigate any risks
and systematically improve operating controls where and when possible in the cost effective manner.
As at March 31, 2008, management recognised the limitation of segregation of duties due to the size of the organisation. The management
is mitigating such risks by introducing compensatory controls to detect and remediate control deficiencies.
OUTLOOK
The listing of majority owned Stellar Diamonds in 2008 is under review due to market conditions. Mano will still retain a significant
stake in Stellar Diamonds post listing.
In the gold division, the Company reviewed its approach to NLGM and the current drill programme will confirm the potential for
increasing the resource. When confirmed, the objectives will be to upgrade the current 1.4M oz resource to Measured category and define a
new substantial resource in the Indicated category. Following this, a new updated feasibility study will be prepared with the objective of
taking NLGM to a production decision. The Board now has the skills to take projects like NLGM into production with a Chairman that has
proven experience in successfully bringing developments to fruition and a mining engineer as CEO.
On the Putu iron ore project, the Company made the decision in 2007 to purchase its own rig from Canada to assist the drilling
contractors. A 4,000m drilling programme has started and initial results will be available towards the middle of 2008. The intention of the
Company is to apply for a 25 year Mineral Development Agreement in May 2008. This process will take up to four months in the mean time the
Company is targeting a deposit of up to 900Mt at Putu.
The Board is considering all options for taking the Company forward including Corporate transactions. The recently announced deal with
Severstal a leading Russian steel and natural resources company gives Mano an excellent partner to take the Putu project forward to
feasibility and ultimately production. The additional funds that will become available once the conditions of the transaction are met will
also give the Company sufficient cash resources to implement its operational objectives at New Liberty.
On Behalf of the Board,
MANO RIVER RESOURCES INC.
LUIS G. CABRITA da SILVA (signed)
LUIS G. CABRITA da SILVA President
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRFUSVORWNRNRUR
Grafico Azioni Man.Assd.Csh (LSE:MANA)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Man.Assd.Csh (LSE:MANA)
Storico
Da Giu 2023 a Giu 2024
