Mano River lures BHP into Sierra Leone

Vancouver — Mano River Resources (MNO-V) has signed an agreement with BHP Billiton (BHP-N) to explore for diamonds on the former’s 9,700-sq.-km prospecting licence in southeastern Sierra Leone.

The deal allows BHP to earn up to an 80% interest in the project through a 4-phase exploration and development program with commitments to spend up to US$3.4 million. The major will operate and manage the project.

Mano River’s regional exclusive prospecting licence, awarded in January 2004, covers the southeastern quadrant of Sierra Leone and is underlain by the Archean Mano craton. At end of the first year, the company must relinquish at least half the ground covered by the regional prospecting licence; the ground will then revert to a standard prospecting licence.

Sierra Leone is a significant producer of diamonds. Extensive alluvial workings are found on the Kono Diamond Field, which produces 300,000-400,000 carats per year at an average value of greater than US$200 per carat. The Koidu kimberlite has produced about 9 million carats, or roughly two-thirds of Sierra Leone’s diamond production to date.

After years of political unrest, the country is seeing a return to foreign investment in mineral exploration.