Exploration and development in West Africa

Source: Energy Digital

Date :26/09/2007 16:13:23

In light of the company’s exploration of ‘highly prospective’ territory in West Africa, President of Mano River Resources Tom Elder talks to Exec UK

Mano River Resources is an exploration company focused on the discovery of world-class gold, diamond and iron ore deposits in the highly prospective, under-explored, West African Mano River Union countries of Sierra Leone, Liberia and Guinea.

The Mano River story began with Guido Pas, who had been a founder financier of Samax, a junior exploration company based in Tanzania, in 1989. That company was bought out by Ashanti in 1998 for $137 million. In setting up Mano, Pas was determined that his new company would follow that successful path.

Zicor Mining had been set up some years earlier and had as its sole project a lead zinc mine in Washington State, North Western US. It rehabilitated a mill and was set to go mining when metal prices collapsed in the early 90s.

That operation was put on care and maintenance, leaving Zicor as something close to a shell. Pas got together with the Zicor chairman, and they decided to merge, de-list and conclude the mechanics to change the name from Zicor to Mano River.

“They were on the Vancouver listing as their primary listing and to this day it’s still a Canadian company with a head office in Vancouver. But interestingly, Zicor had been one of the first resource companies to list on AIM,” explains Mano’s President and CEO Dr Tom Elder.

Liberian exploration

Mano quickly achieved licenses in all three of its target countries. “The initial commodities of interest were gold and diamonds and the fundamental geology of those countries is absolutely the right place to go looking for those two,” says Dr Elder.

A geology graduate of Durham University, Dr Elder has an extensive background in mineral exploration gained with major companies including BP and RTZ. He is multi-lingual and has worked as worldwide Exploration Manager for BP Minerals in the 80s. Following the take-over by RTZ, he had special responsibility for project development in the former Soviet Union.

After a listing on the Vancouver Stock Exchange and AIM in London, Mano obtained its first Liberian exploration licenses in 1997 and began a full scale programme in 1998, as Dr Elder explains: “The next thing that happened was that shooting stopped in Liberia so we were able to get going.

“We began drill testing at the start of 1999 and until 2001 we had considerable success with both gold exploration and diamonds. We drilled three projects, one of which now has a full bankable feasibility study completed on it.”

While the company was having success with its gold programme in Liberia, this was at a time when central banks were selling gold and the price was dropping towards $250 an ounce. “We were looking for an unfashionable commodity in an unfashionable country,” as Elder puts it.

Mano switched its focus in the country to diamonds and immediately made discoveries of the first ever kimberlite pipes to be found in Liberia, and Elder says work was “going very well” until the shooting restarted as rebel forces, backed by neighbouring countries, fought to oust Liberia's warlord-turned-president, Charles Taylor. For the company at least, this proved to be something of a blessing in disguise.

“At the end of 2001 we simply had to close down all our field operations and bring our guys back to the capital. Fortunately for us, at exactly the same time, the terrible civil war that has been going on in Sierra Leone came to an end and we simply moved as many people and materials as we could from Liberia into Sierra Leone and started our programme there.”

Stellar diamonds

Mano’s subsidiary Stellar Diamonds focuses on diamond exploration and production in West Africa. “The thing with diamonds is that if you’ve got a high grade diamond mine, it may have a tiny amount of diamonds in it per tonne of rock.

"The only way you can decide if you’ve got something economic is to bring the lab to the project. They are going to treat ten thousand tonnes of rock and the results will tell us which of the half dozen or so kimberlite pipes can make a nice diamond mine.”

In eastern Sierra Leone, Stellar -which Mano plans to list on AIM later this year - holds a 49 percent interest in a joint venture with Petra Diamonds on a kimberlite project in the Kono diamond field.

Unlike Trans Hex Group, Mano’s partners in Liberia, Petra judged that the best way to explore this prospect was to sink shafts underground and look at it in place. As such, a 75-tonne per hour processing plant has been built and ‘exploration shaft sinking’ is being conducted on numerous diamond bearing kimberlite dykes in the region.

More recently, Stellar obtained ex-De Beers ground in Guinea where it had high grade kimberlite dykes. “This held hundreds of carrots per hundred tonnes where a normal figure is more like 40 or 50. The flipside is that the value per carrot is fairly low, but we think that it’s a strong economic prospect. Overall, Stellar has assembled a significant portfolio of projects.”

Gold, iron ore and restructuring

The publication of a positive $1 million Bankable Feasibility Study for Mano’s New Liberty Gold project at the start of 2007 was a significant milestone for both the company and Liberia as a whole.

“This will become Liberia’s first ever major gold mine,” says Dr Elder. “An unusual combination of factors means that this project is unlikely to present us with any major problems in construction or subsequent operation.”

Mano also owns 80 percent of African Iron Ore Group (AIOG), which is targeting the Putu iron ore deposit in south eastern Liberia. “We got hold of one of ten iron ore prospects in the country. In the 70s and 80s, Liberia produced approximately a fifth of the world’s iron ore.

"The biggest of the mines shut down during the civil war is being developed by Mittal Steel, with the promise of investing $1 billion dollars to rehabilitate it. Partly as a result of our having brought BHP into neighbouring Sierra Leone, they are now also in Liberia in a big way and talking about doing thousands of meters of drilling on prospects that they have.

"Meanwhile little Mano has a license in the east of the country and is about to start drilling to discover the economics of what we have.”

Asked why these areas, so rich in natural and precious resources, have been so under explored, Dr Elder points to the turbulent social, political and economic history of many African countries.

“You could argue that outside of South Africa and Botswana, in the 70s and 80s, none of Africa was being explored. Ex colonial countries tended to align themselves with the Soviet block. They had socialist, one party state orientated governments which thoroughly discouraged foreign risk investment.

That policy was beginning to show cracks in the late 1980s and then the complete collapse of the Soviet system was the trigger for the Tanzania and Ghana to completely change their mind about western foreign investment.”

Of course, the countries and the politics have changed dramatically in the intervening years. Under President Ellen Johnson Sirleaf, Liberia is seen as an attractive destination for foreign investment and Sierra Leone has just completed its first ever internally organised democratic elections.

In the context of this stability, the company is now aiming to bring the New Liberty Gold project towards production and aims to add further mine development successes from its licenses. It is also implementing a corporate reorganization, which includes the planned listing of Stellar Diamonds, and aims to achieve “proper recognition” in the market of the value of Mano’s numerous assets.

Guido Pas has said that Mano plans to allow its divisions to assume an independent life so that its gold, diamonds and iron ore can be priced on their own merits, which will significantly boost Mano’s value.

Related Links

Mano River Resources