Mantra's pre-feasibility study lifts annual production by 48% and confirms
robust project economics for Nyota Prospect

    
    Highlights

    -  Average annual production of 3.7 million pounds of U(3)O(8);
    -  Initial mine life of twelve years, with strong potential to increase;
    -  Life of mine average operating cost of US$25.05 per pound of U(3)O(8);
    -  Capital cost, including all associated infrastructure, of US$298
       million;
    -  Study based on the January 2010 Mineral Resource Estimate; and
    -  Definitive Feasibility Study to commence immediately, targeting
       completion by the end of 2010.
    

PERTH, Western Australia, March 1 /CNW/ - Mantra Resources Limited ('Mantra' or 'the Company') (ASX: MRU, TSX: MRL) is pleased to announce that the Pre-Feasibility Study ('PFS') for the Company's Nyota Prospect ('Nyota'), part of the wholly owned Mkuju River Project ('MRP' or the 'Project') in Tanzania, has confirmed the technical and economic viability of the Project and its capacity to operate with strong cash margins.

Using the current Mineral Resource Estimate ('MRE') comprising 25.1 million tonnes averaging 515 ppm for 28.5 million pounds of U(3)O(8) classified into the Indicated Resource category, plus Inferred Resources of 57.3 million tonnes averaging 442 ppm for 55.8 million pounds of U(3)O(8), Nyota can support an average annual production of 3.7 million pounds U(3)O(8) over a minimum twelve year mine life. This represents a 48% increase in annual production over the results of the Scoping Study reported in June 2009 and there is strong potential to increase this further with ongoing exploration work.

The PFS is based on a contractor mining scenario and the processing plant is based on simple acid leach and resin-in-pulp technology. The operating cost averages US$25.05 per pound over the life of mine, a decrease of 5% from the Scoping Study results.

The capital costs (determined to a nominal accuracy of +/- 20%) for the Project are estimated at US$298 million; US$140 million for the process plant and US$158 million for project infrastructure. Any future increase in production rates will require minimal infrastructural capital as this is essentially sunk in this first phase of the Project.

The Project has the capacity to generate pre-tax cash margins of approximately US$115 million per annum at an average uranium price of US$60 per pound over the life of mine.

The Company will award the Definitive Feasibility Study ('DFS') shortly and commence immediately thereafter with a view to completing the DFS in the fourth quarter 2010. Two key elements of the DFS are the integrated pilot metallurgical testwork program which aims to further optimise the process flow sheet, and resource infill and exploration drilling programs.

A 17 tonne bulk sample, representative of the first seven years of production in the mine plan, has been delivered to ANSTO in Australia and will be used in a three month integrated piloting scale test campaign. The results from the program will be used in the detailed design phase of the DFS.

The drill programs have already commenced with the objective of upgrading portions of the current MRE to the Indicated and Measured categories and increasing the overall resource base. An increase in the overall resource base will facilitate future expansion in production rates and the contemplation of a longer mine life.

Commenting on the PFS, Mantra's CEO Peter Breese said "The positive results of the PFS for Nyota moves Mantra closer to fulfilling its objective of near-term, low cost production and early cashflow generation. We believe a production rate of 3.7 million pounds of U(3)O(8) is a sensible target at which to commence operations. We also believe that there is strong potential to increase this production rate as we continue to explore and unlock the significant prospectivity of the MRP".

A full version of this release complete with details of the work completed and the Company's QA/QC procedures is available on the Company's website (www.mantraresources.com.au), ASX (www.asx.com.au), and SEDAR (www.sedar.com).

Competent Person Statements

The information in this release is based on information compiled by Mr. Dave Dodd, who is a Chemical Engineer and a Fellow of the South African Institute of Mining and Metallurgy. Mr. Dodd is a Technical Consultant of MDM Engineering Ltd, a consultant of Mantra Resources Limited. Mr. Dodd 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' and is a "Qualified Person" under National Instrument 43-101 - 'Standards of Disclosure for Mineral Projects'.

Mr. Dodd consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this release that relates to in-situ Mineral Resources is based on information compiled by Mr Malcolm Titley of CSA Global Pty. Ltd. He is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity 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 release, including sampling, analytical and test data underlying the information contained in this release.

Mr Titley consents to the inclusion of such information in this release in the form and context in which it appears.

Forward Looking Statements

This report 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 the Company's business strategy, plans, objectives, performance, outlook, growth, cash flow, earnings per share and shareholder value, projections, targets and expectations, mineral reserves and resources, results of exploration and related expenses, property acquisitions, mine development, mine operations, drilling activity, sampling and other data, grade and recovery levels, future production, capital costs, expenditures for environmental matters, life of mine, completion dates, uranium prices, demand for uranium, and currency exchange rates. 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' and similar expressions. Persons reading this report 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, Tel: [phone]; Matthew Yates, Executive Director, Tel: [phone]; Alex Buck, Investor Relations, Tel: [phone]