Closes Deal With Severstal to Develop Iron Ore Asset & Mano to Receive US$12.5M to Progress Other Assets

Mano River Resources Inc, the TSX-V and AIM-listed exploration and development company focused on iron ore, diamonds and gold in west Africa, is pleased to announce that it has closed the transaction with Severstal Resources' indirect wholly-owned Dutch subsidiary, Lybica Holding B.V. ("Severstal") to finance and develop the Company's Putu Range iron ore project in south eastern Liberia ("Putu" or the "Project") which is held under African Iron Ore Group Ltd. ("AIOG").

Further to the agreement signed on 22 May 2008, Severstal has now acquired a 61.5% equity interest in AIOG while Mano's holding has been reduced from 80% to 38.5%. In light of Severstal's majority interest, AIOG will be re-named Severstal Liberia Iron Ore Ltd. and Severstal will become the operator on the Project. The parties have also entered into a shareholders' agreement to govern their relationship.

The Company had previously announced on 24 October 2008 the two year extension of Mano's Putu Range Iron Ore exploration licence, which satisfied all material legal requirements for the Company to close the deal with Severstal.

Putu Iron Ore Project

Severstal is investing US$30 million (US$15 million by way of a new subscription of shares in AIOG and US$15 million through a loan facility agreement) to advance Putu through to a definitive feasibility study. AIOG is currently in the final stages of an initial 4,000m drill programme aimed at further delineating the resource at Putu and establishing the quality and quantity of the resource. A technical update on the project will be provided in the coming weeks.

Terms

Additionally, based on the terms of the agreement, Severstal agreed to pay US$12.5 million directly to Mano in consideration for 25% of Mano's interest in AIOG. This sum will be paid partly on completion (US$8.3M), with the balance (US$4.2M) deferred for two years and its payment at that time subject to the continued advancement by the parties of the Project. These funds will advance other priority properties, with a particular focus on developing the gold division in Liberia in line with the Company's strategic direction. A further investment by the Company into Stellar Diamonds is also being considered in the immediate future.

In closing the transaction, the Company has also agreed to allow Severstal to optimise its own cash management by maintaining a minimum balance in the AIOG bank account of working capital that is no less than the quarterly work programme requirement. To implement this, it has been agreed that, from the funds invested, AIOG will provide a loan to Severstal's Cypriot affiliate of approximately US$11M.

Luis da Silva, Chief Executive Officer of Mano commented:

"We are extremely pleased to have closed the deal with Severstal. This is the culmination of many months of work which has taken place with Severstal to progress the Putu iron ore project. We are convinced Severstal brings the complimentary technical expertise and skills to develop an asset of this magnitude. Severstal's input will allow us to accelerate the development of Putu and realise value in the medium term."

"2008 has seen a number of significant developments in the Company as well as across the financial markets. The closing of this deal with Severstal, is a good example of a small cap company working closer with experienced partners. This will ensure that Mano embarks on a new phase of financial stability and growth to progress the Company towards development and production."

SOURCE: Mano River Resources Inc

Mano River Resources Inc Luis da Silva +44 (0) 20 7299 4212 Website: www.manoriver.com Pelham PR Charles Vivian/James MacFarlane +44 (0) 20 7743 6670 GMP Securities Europe LLP James Hannon +44 (0) 20 7647 2803 Panmure Gordon (UK) Limited Edward Farmer +44 (0) 20 7614 8384