MANA Man.Assd.Csh

 

TIDMMANA 
 
RNS Number : 6026Q 
Mano River Resources Inc 
15 April 2009 
 
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15 April 2009 
 
 
TSX-V: MNO 
AIM:     MANA 
MANO RIVER RESOURCES INC. 
("Mano" or the "Company") 
 
 
Mano Announces Proposed Business Combination with African Aura Resources Ltd. 
 
 
Mano River Resources Inc ("Mano" or the "Company") the TSX Venture Exchange 
("TSX-V") and AIM listed exploration and development company focused on iron 
ore, gold and diamonds in West Africa is pleased to announce that the Company 
has entered into a legally binding Letter of Intent ("LOI") to conclude a 
broader agreement to merge with TSX-V listed African Aura Resources Ltd. 
("Africa Aura" TSX-V: AAZ) pursuant to which Mano will offer 1.57 Mano shares 
for every one African Aura share in order to acquire the entire issued share 
capital of African Aura. The obligation of Mano and African Aura to enter into 
the broader agreement is subject to certain conditions being met, including the 
approval of the TSX-V and satisfactory completion of due diligence. The 
merger will significantly strengthen Mano's position in West Africa, creating a 
well capitalised iron ore and gold exploration and development company. 
 
 
Highlights of the Agreement: 
 
 
  *  All share transaction whereby African Aura shareholders will receive 1.57 Mano 
  shares for each African Aura share, representing a premium of 18.7% to African 
  Aura's 60 day volume weighted average share price at market close on 14 April 
  2009, based on Mano's 14 April 2009 closing AIM price and an exchange rate of 
  C$1.80 to GBP1. 
 
 
 
  *  Merged entity to be renamed African Aura Mining Inc. which, at completion, will 
  be owned 75% by Mano shareholders and 25% by African Aura shareholders. 
 
 
 
  *  Proposed board of directors: 
  *  
    *  Luis da Silva - President and CEO 
    *  David Netherway - Non-Executive Chairman 
    *  David Evans, Guy Pas and Steven Poulton - Non-Executive Directors 
    *  Kirill Zimin, who was previously nominated by Severstal Resources to be its 
    representative on Mano's Board after their investment in the Putu Range project, 
    is expected to be appointed as a Non-Executive Director in the coming weeks and 
    will remain post-merger in light of Severstal's strategic investment. 
 
 
 
 
  *  A proposed 1 for 6 Mano share consolidation, as previously approved my Mano's 
  shareholders, expected to take place concurrently with the completion of the 
  proposed merger. 
 
Strategic Rationale for the Merger: 
 
 
  *  Strong operational synergies with highly prospective iron ore and gold assets in 
  West Africa which will considerably enhance Mano's presence in the region with 
  the addition of the following projects wholly-owned by African Aura: 
  *  
    *  12km long Nkout iron deposit in southern Cameroon. Reconnaissance sampling along 
    a 5km section returned an average grade of 54% iron. 
    *  Batouri gold project in western Cameroon. Intersections to date include 132g/t 
    Au over 1.0m and 49g/t over 1.5m. 
 
 
 
 
  *  Significantly strengthens Mano's financial position with the addition of C$5.9m 
  to treasury (as at 30 March 2009). 
 
 
 
  *  Geographic diversification and risk reduction by stepping out of Mano's 
  traditional operating countries. 
 
 
 
  *  The proposed Board of Directors of the combined company will be strengthened by 
  drawing on the skills and expertise of the African Aura management team. 
 
 
 
In a joint statement Luis da Silva, President & CEO of Mano and John Gray, 
President & CEO of African Aura commented: 
 
 
 
 
"We believe that the merger of Mano and African Aura to create African Aura 
Mining Inc. is a market leading transaction of two companies with similar strong 
cash positions and highly prospective assets. The transaction is consistent with 
our respective corporate strategies and will provide both companies with the 
opportunity for transformational growth. The merged company will on completion 
of the transaction have an approximate cash position of C$11m / GBP6.0m and a 
well diversified portfolio of advanced iron and gold assets in Liberia and 
Cameroon. We believe these two commodities create a compelling natural hedge for 
our shareholders in the current uncertain global economic climate. Furthermore, 
the combination will forge a strong Board of Directors and management team 
comprising individuals with notable track records in the discovery and 
development of significant resources, including Guy Pas who co-founded Addax & 
Oryx, Afren and SAMAX which was acquired in 1998 by Anglogold Ashanti and David 
Netherway who spearheaded Afcan until it was acquired by Eldorado Gold in 2005." 
 
 
Dave Evans, Chairman of Mano River, added: 
"In unanimously agreeing to merge, the Boards of Mano and African Aura are 
seeking to create shareholder value by capitalizing on the numerous corporate 
and exploration synergies that exist between our two companies and which will 
serve to reduce exploration risks by bringing together our complementary assets 
and technical expertise. We are confident that the resulting company with its 
larger capitalization will generate enhanced news flow and be more attractive to 
a greater number of potential shareholders. This in turn will serve to greatly 
improve the liquidity in the merged company's shares. We plan to create 
shareholder value by developing our existing assets, continuing to grow the 
resource base through cost efficient exploration, undertaking appropriate cost 
and risk sharing joint ventures with major partners and by pursuing further 
mergers and acquisitions in sub-Saharan Africa." 
 
 
For further information on Mano River Resources 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 
 
 
Evolution Securities Limited 
Simon Edwards / Chris Sim / Neil Elliot    +44 (0) 20 7071 4300 
 
 
Pelham Public Relations 
Charles Vivian / James MacFarlane        +44 (0) 20 7337 1500 
 
 
 
 
Summary of the Transaction 
 
 
The LOI provides the key elements by which Mano and African Aura will enter a 
broader transaction agreement to combine the two companies ("Transaction 
Agreement"). The transaction is currently expected to be structured as a merger 
under the corporate laws of the British Virgin Islands (the "BVI") whereby, 
subject to the approval of a majority of the votes cast by shareholders of 
African Aura at a shareholders meeting, a wholly-owned BVI subsidiary of Mano 
will merge with African Aura and Mano will thereby acquire all of the issued and 
outstanding common shares of African Aura. The consideration will be the 
issuance to shareholders of African Aura of 1.57 Mano shares for each African 
Aura share they hold (the "Exchange Ratio"). This represents a value of 
approximately C$0.099 per African Aura share, based on the closing price of Mano 
on the AIM market on 14 April 2009 at an exchange rate of C$1.80 to GBP1, 
representing an 18.7% premium to the 60-day volume weighted average African Aura 
share price. 
 
 
Mano will issue 105,264,638 new shares in exchange for the 67,047,540 issued 
outstanding common shares of African Aura on an undiluted basis. Former African 
Aura and former Mano shareholders will account for 25% and 75%, respectively, of 
the common shares of African Aura Mining Inc. on an undiluted basis. 
 
 
As well, all outstanding African Aura warrants and African Aura options will be 
converted into Mano warrants and Mano options, based upon the Exchange Ratio pro 
rata to the amounts held. At completion of the transaction, Mano intends to 
change its name to African Aura Mining Inc. Mano also intends to undertake a 
share consolidation at, or prior to, completion of the transaction - the 
Exchange Ratio will be adjusted accordingly if the consolidation takes place 
prior to completion.  Subject to regulatory approval, African Aura Mining Inc. 
will trade on the TSX-V and AIM. 
 
 
The proposed new Board of Directors will comprise six directors, Mano will 
nominate four directors, of which three will be existing directors of Mano 
(namely, Luis da Silva who will serve as President and CEO, Guy Pas and David 
Evans, who will both be non-executive directors) and African Aura will nominate 
two directors (namely David Netherway who will be appointed as non-executive 
Chairman and Steven Poulton who will serve as a non-executive director). In 
accordance with Severstal Resources' strategic investment in Mano and their 
investment in the Putu Range iron ore project, Kirill Zimin is expected to be 
appointed to Mano's Board of directors in the coming weeks. He will subsequently 
remain on the Board of Directors of the merged company making him the fourth 
Mano director. 
 
As a condition to Mano entering into the Transaction Agreement, the directors 
and officers of African Aura, holding, in total, 11.69% of the issued share 
capital of African Aura, will enter into an agreement to vote in favour of the 
transaction. 
 
 
African Aura will convene a meeting of its shareholders for the purpose of 
approving the transaction by no later than 30 June 2009. In the interim it will 
prepare and mail a circular and all other required documents to African Aura 
shareholders on or before 8 June 2009. The transaction is expected to complete 
on or around 15 July 2009. 
 
 
The obligation of Mano and African Aura to enter into the Transaction Agreement 
is subject to certain conditions precedent, including: 
 
 
      -   Each party being satisfied, acting reasonably, of the results of its 
legal, financial and technical due diligence 
 

          review of the other 

party; 
      -   Obtaining any necessary consents of the TSX-V to the transaction, on 
terms satisfactory to Mano; 
      -   Each party having determined that there does not exist and has not 
occurred any material adverse condition, 
 

         event or development 

related to the other party. 
 
 
Pursuant to the LOI, African Aura has agreed not to solicit an alternative 
transaction prior to the earlier of the date of execution of the definitive 
Transaction Agreement or May 15, 2009. A compensation fee of C$250,000 will be 
payable to Mano by African Aura in the event that, among other events, African 
Aura enters into an agreement with a third party concerning an alternative 
transaction prior to such date. Furthermore, in the event that the Transaction 
Agreement has not be entered into on or before May 15, 2009 and either African 
Aura or Mano terminates the LOI, African Aura will be required to reimburse Mano 
for all documented expenses, costs and fees incurred by it in connection with 
the transaction, up to C$125,000. In addition, where Mano fails to provide 
information reasonably required by African Aura to complete its shareholders 
circular a reimbursement fee of C$75,000 is payable by Mano to African Aura. 
Completion of the transaction will be subject to customary conditions, including 
a favourable vote of at least 50% of the holders of African Aura common shares 
voted at a special meeting of shareholders and the receipt of all necessary 
regulatory approvals. 
 
 
Additions to the Mano Portfolio Post Transaction 
 
 
Iron Project 
 
 
  *  A 100% interest in the 12km long Nkout iron project in southern Cameroon being 
  advanced by African Aura. The project is defined by airborne geophysical data 
  and geological mapping, with drill testing scheduled to commence in May 2009. 
  Reconnaissance sampling undertaken by African Aura along a 5km section of the 
  prospect returned an average grade of 54% iron and a maximum of 65% iron from 
  hematitic banded iron and itabarite formations. 
 
 
 
Gold Project 
 
 
  *  A 100% interest in the Batouri gold project in western Cameroon being advanced 
  by African Aura. Sixty six holes of an initial resource drilling programme have 
  been completed to date which defines a significant gold stockwork system 
  covering an area up to 500m wide along 3 km of strike. Intersections to date 
  include 132g/t Au over 1.0m and 49g/t Au over 1.5m. 
 
 
 
Uranium Projects 
  *  A 70% interest in Ridgeway Energy Ltd which holds a total of 3,480km2 across 
  four exploration licences in Cameroon. Mapping by the BRGM and reconnaissance 
  exploration by African Aura have indicated the potential for new uranium 
  discoveries. 
 
 
 
About African Aura 
African Aura (TSX-V: AAZ) has a 'first-mover' exploration strategy, focused on 
the discovery of economic iron, gold, and uranium deposits in sub-Saharan 
Africa. The Company commenced exploration in 2004 and has established a 
portfolio of exploration licences totalling approximately 9,480km2, targeting 
areas of active artisanal gold mining within Archaean greenstone and Proterozoic 
volcano-sedimentary belts. The portfolio includes the 12km long Nkout iron 
project in southern Cameroon, the Batouri gold project in eastern Cameroon, the 
Fula Camp gold project in western Liberia, and a pipeline of significant 
prospects for drill testing as well as numerous other gold, uranium and iron ore 
targets that require follow up exploration. African Aura trades on the TSX-V 
under the symbol AAZ. More information can be found on line at 
www.african-aura.com and at SEDAR's website: www.sedar.com. 
 
 
African Aura Technical Information 
African Aura's Qualified Person under National Instrument 43-101 responsible for 
reviewing and approving the African Aura technical information in this release 
is its Chief Operating Officer, Mark Biddulph, who holds a BSc Hons in Geology, 
and GIS from Rhodes University, and a GDE in Mining Engineering (Mineral 
Economics) from the University of Witwatersrand in South Africa. Mark is a 
Professional Natural Scientist under the South African Council for Natural 
Scientific Professions (SACNASP).  The potential grades in this release are 
conceptual in nature. There has been insufficient exploration to define a 
mineral resources and it is uncertain if further exploration will result in the 
targets being delineated as a mineral resource. 
 
 
Forward-looking Statements 
This press release includes certain Forward-Looking Statements. All statements, 
other than statements of historical fact, included herein, including without 
limitation, statements regarding potential mineralisation and reserves, 
exploration results and future plans and objectives of Mano and/or African Aura, 
are forward-looking statements that involve various known and unknown risks and 
uncertainties as well as other factors. Such forward-looking statements include 
statements concerning the completion of the transaction (including the entering 
into of the Transaction Agreement), the cash position and market capitalization 
of the merged company, the merged company's ability to complete future mergers 
and acquisitions, improvements to the liquidity in trading of the merged 
company's shares, the merged company's objectives and plans and the intention of 
Mano to change its name and consolidate its shares. Such forward-looking 
statements are subject to a number of risks and uncertainties that may cause 
actual results or events to differ materially from current expectations, 
including the failure of Mano and African Aura to negotiate definitive 
agreements and delays in obtaining or failure to obtain required regulatory and 
shareholder approvals. There can be no assurance that such statements will prove 
to be accurate and actual results and future events could differ materially from 
those anticipated in such statements. Any forward-looking statements speak only 
as of the date hereof and, except as may be required by applicable law, Mano 
disclaims any obligation to update or modify such forward-looking statements, 
either as a result of new information, future events or for any other reason. 
 
 
 
 
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term 
is defined in the policies of the TSX Venture Exchange) accepts responsibility 
for the adequacy or accuracy of this release. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 MSCGGGMDMKGGLZM 
 

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