MANTRA SIMPLIFIES RESIN-IN-PULP FLOWSHEET AND IMPROVES METALLURGICAL RECOVERY

PERTH, Western Australia, Oct. 20 /CNW/ - Mantra Resources Limited ('Mantra' or 'Company') (ASX:MRU, TSX:MRL) is pleased to announce the final, optimised process flowsheet for the Mkuju River Project ('MRP' or 'the Project') Definitive Feasibility Study ('DFS'). This follows both extensive, integrated pilot plant metallurgical testwork and various stand-alone testwork campaigns undertaken during the year and incorporates the earlier process optimisations (refer announcement dated 29 April 2010) from the first pilot plant campaign at ANSTO in Sydney.

The final outcome is a highly simplified, single stream metallurgical flowsheet that maximises uranium recovery. This modified flowsheet has increased overall uranium recovery to 82% from the Pre-Feasibility Study ('PFS') figure of 79%, whilst significantly reducing acid consumption from the PFS figure of 12 kilograms per tonne to 6 to 10 kilograms per tonne of plant feed.

Commenting on today's announcement, Peter Breese, CEO, said "We are pleased to publish the final DFS process flowsheet, which demonstrates that the Nyota orebody's leach characteristics are exceptionally good. As a result of the extensive, integrated metallurgical testwork program we have been able to simplify the flowsheet, capturing into a single stream process an improvement in overall uranium recovery in excess of 3%, whilst incorporating the earlier optimisations we announced. These substantial improvements are expected to result in the reduction of direct processing operating costs in the DFS."

Simplified Resin-in-Pulp ('RIP') Flowsheet

The simplified flowsheet (Figure 1 - available at www.sedar.com) will result in increased uranium recovery and production during the first phase of operations.

The modified flowsheet has been designed to process five million tonnes per annum. Prior to the leach circuit, all material greater than 1.2 millimetres will be wet screened and rejected. After leaching, classification will take place at a size of 120 micron. The -120 micron material will go to the RIP circuit and the +120 micron material will be filtered, washed to recover dissolved uranium, and then discarded. This process significantly enhances uranium recovery compared to the PFS as it reduces the amount of uranium being discarded to waste.

The reduction in the size of the material going to the RIP circuit, from the PFS level of -250 micron to -120 micron, improves the movement of slurry through the RIP circuit and the separation of resin from the slurry prior to elution. This facilitates the use of smaller resin beads, thereby reducing the consumption of resin in the circuit.

The second pilot plant campaign at ANSTO successfully confirmed that the elution process could be conducted at ambient temperature and that locally sourced limestone is of high quality and will be used in the process.

This modified process flowsheet will be included in the DFS, which will also detail updated Project operating and capital costs. The DFS remains on track for completion by the end of the fourth quarter 2010 and Mantra expects to announce the outcomes during the first quarter 2011.

ABOUT MANTRA RESOURCES LIMITED

Mantra is an emerging uranium producer with a portfolio of quality projects in southern Tanzania. The Company is dual listed on the Australian Securities Exchange ('ASX') under the code 'MRU' and the Toronto Stock Exchange ('TSX') under the code 'MRL'. Mantra is focused on aggressively pursuing the potential development and ongoing exploration of the Mkuju River Project in Tanzania in order to fulfil its strategic objective of becoming a significant uranium producer in the near-term.

Regulatory Disclosures:

A full complete version of this news release is available on the Company's website (www.mantraresources.com.au), ASX (www.asx.com.au), and SEDAR (www.sedar.com).

For further information regarding the Mkuju River Project, including a description of Mantra's quality assurance program, quality control measures, the geology, samples collected and testing procedures in respect of the Mkuju River Project please refer to the technical reports prepared in accordance with NI 43-101 entitled "January, 2010 Resource Update - Mkuju River Project, located in Tanzania, Africa" dated 10 March 2010, "December, 2009 Resource Update - Mkuju River Project" dated 7 December 2009 and "Technical Report on the Mkuju River Project located in Tanzania, Africa" dated 18 September 2009, which are available under the Company's profile at SEDAR.

Competent Person/Qualified Person Statements

The information in this release that relates to the Resin-In-Pulp metallurgical testwork results is based on information compiled by Mr Stuart Lawrence, who is a Metallurgist and a Fellow of the South African Institute of Mining and Metallurgy. Mr Lawrence is a Director of DRA's parent company, the EPCM contractor for the Mkuju River Project. Mr Lawrence has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code) and is a "Qualified Person" under National Instrument 43-101 - 'Standards of Disclosure for Mineral Projects'. The Qualified Person has verified the data disclosed in this report, was satisfied with the verification process and consents to the disclosure in this release. Mr Lawrence consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Forward-Looking Statements

This news release contains 'forward-looking information' that is based on the Company's expectations, estimates and projections as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to pre-feasibility and definitive feasibility studies, the Company's business strategy, plans, development, objectives, performance, outlook, growth, cash flow, projections, targets and expectations, mineral reserves and resources, results of exploration and related expenses. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as 'outlook', 'anticipate', 'project', 'target', 'likely', 'believe', 'estimate', 'expect', 'intend', 'may', 'would', 'could', 'should', 'scheduled', 'will', 'plan', 'forecast', 'evolve' and similar expressions. Persons reading this news release are cautioned that such statements are only predictions, and that the Company's actual future results or performance may be materially different.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to the risk factors set out in the Company's Annual Information Form.

This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. The Company disclaims any intent or obligations to update or revise any forward-looking statements whether as a result of new information, estimates or options, future events or results or otherwise, unless required to do so by law.

For further information: Peter Breese, Chief Executive Officer, Telephone: [phone]