acquisition of uranium exploration project in

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ANNOUNCEMENT TO THE AUSTRALIAN SECURITIES EXCHANGE: 8 MARCH 2007
ACQUISITION OF MBAMBA BAY URANIUM EXPLORATION PROJECT IN TANZANIA
The Directors of Mantra Resources Limited (“Mantra” or “the Company”) are pleased to announce that the Company has entered into an agreement to acquire a 90% interest in the Mbamba Bay uranium exploration project (“Mbamba Bay Project”) located within a Karoo age basin in south-western Tanzania.
The Mbamba Bay Project compromises one granted licence (PL 4168/2007) covering an area of approximately 72 square kilometres. The geological setting of the project area is dominated by Karoo sediments and is considered to be prospective for sandstone hosted “roll-front” type uranium mineralisation. Previous exploration completed between 1979 and 1980 identified secondary uranium mineralisation in trench and rock chip sampling with values up to 0.68% U3O8.
Initial work on the Mbamba Bay Project will include a detailed review of historical data and compilation of a GIS database in preparation for field work planned during 2007. The exploration work program will compromise geological mapping, ground radiometric surveys, trenching and sampling with a view to generating drill targets.
The acquisition of the Mbamba Bay Project further consolidates Mantra’s strong ground position within the highly prospective Karoo basins of southern Tanzania, with the total area under licence or application increasing to over 6,100 square kilometres.
Enquiries: Robert Behets Managing Director
Contact Details: Phone: +61 8 9322 6322
Introduction
Mantra is pleased to announce that the Company has entered into a joint venture (“JV”) with a Tanzanian partner and acquired a 90% interest in the Mbamba Bay uranium exploration project. The JV will explore for and develop uranium and other mineral deposits on Prospecting Licence No. PL 4168/2007. Mantra will manage and sole fund exploration on the tenement with the Tanzanian partner retaining a 10% free carried interest through to a decision to mine.
Project Overview
The Mbamba Bay Project is located in the south-western corner of Tanzania, some 120 kilometres south-west of Songea (Figure 1). It comprises one granted tenement (Prospecting Licence No. PL 4168/2007) which covers an area of approximately 72 square kilometres.
Figure 1: Project Location Map
The geological setting of the project area is dominated by Karoo sediments (Figure 2) and is considered to be prospective for sandstone hosted “roll-front” type uranium mineralisation.
The Mbamba Bay Basin is underlain by the Mbamba Bay Granite (Lower Proterozoic). The outlines of the basin are controlled by block faults which are related to the East African Rift system. The Karoo sediments within the basin (classified Karoo K1 and K2 series) consist predominantly of sandstones, siltstones and shales. To the south-west, the Karoo sediments are overlain by younger sediments and alluvium. The present south-western margin of the Mbamba Bay Basin is defined by the coastline of Lake Nyasa.
Figure 2: Mbamba Bay Project - Geology and Anomaly Locations
The project area was part of a country-wide search for uranium conducted between 1978 and 1982 by a German company Uranerzbergbau GmbH (“UEB”). The exploration initiative commenced with a review of airborne geophysical data generated in a country-wide survey carried out by Geosurvey International Ltd between 1976 and 1979. Based on this work, three Karoo basins in Tanzania, including the Mbamba Bay Basin, were covered with exclusive prospecting licences in 1978.
Two anomalies in the Mbamba Bay area (interpreted from the airborne radiometric data) were ground checked by UEB in 1979 (Figure 2). Visible secondary uranium mineralisation was observed at one of the two anomalies (Anomaly 309/1B), with a grab sample returning 242ppm U3O8.
A limited ground follow-up program comprising geological mapping, radiometric surveying, trenching and sampling was completed during a 15 day field campaign in 1980. The area of Anomaly 309/1B was covered by a radiometric survey grid (UEB Grid 1), resulting in a further 13 anomalies (A309/2 to A309/14) being detected with surface radiometric responses ranging from 4 times background to a maximum of 60 times background (Figure 3).
Subsequent trenching and rock chip sampling showed all of the detected anomalies to be caused by secondary uranium minerals associated with siltstone clasts and lenses hosted within medium to coarse grained sandstone, and of limited apparent lateral or vertical extent. Assay results for the siltstone samples ranged from 90ppm to a maximum value of 0.68% U3O8 (Figure 3) with the uranium content of the sandstone environment between 65 and 100ppm U3O8.
A geological section mapped through the upper part of the K1 sediments (to the west of the uranium occurrences observed within the UEB Grid 1) revealed a 20 metre thick unit of medium grained sandstone with carbonaceous matter that is overlain and underlain by fine grained overbank sediments. This geological environment is considered favourable for sandstone hosted “roll front” type uranium deposits but was not followed up during the brief 1980 field campaign.
Figure 3: Mbamba Bay Project – Grid 1 and Anomalies
Initial work by Mantra on the Mbamba Bay Project will include a detailed review of historical data and compilation of a GIS database in preparation for field work planned during 2007. The exploration work program will comprise geological mapping, ground radiometric surveys, trenching and sampling with a view to generating targets for subsequent drill testing. Detailed geological mapping and radiometry of the favourable lithology within the upper part of the K1 sediments will be a priority, along with extending the UEB Grid 1 to the south to cover the K2 sediments.
The acquisition of the Mbamba Bay Project consolidates Mantra’s strong ground position within the highly prospective Karoo basins of southern Tanzania, with the total area under licence or application increasing to over 6,100 square kilometres. The joint venture also reflects the Company’s strategy to aggressively pursue other resource opportunities in Africa, including potential acquisitions, joint ventures, or investments in the resources sector, which can enhance Shareholder value.
Commercial Terms
Total consideration to acquire the 90% interest in the Mbamba Bay Project comprises the payment of US$50,000, reimbursement of licence fees incurred to-date (US$1,700) and the issue of 300,000 ordinary shares. The JV agreement also provides for the issue a further 1,000,000 ordinary shares (in total), subject to key project milestones being achieved. These project milestones include Mantra electing to proceed to a pre-feasibility study, electing to proceed to a feasibility study, and making a decision to mine. Mantra will manage and sole fund exploration on the tenement with the Tanzanian partner retaining a 10% free carried interest through to a decision to mine.
Mantra Resources Background
Mantra has direct and joint venture interests in a portfolio of uranium exploration tenements and applications in Tanzania. The existing tenements and applications cover a total area of approximately 7,700 square kilometres and include sandstone hosted roll-front type uranium targets in the highly prospective Karoo sediments of southern Tanzania (Mkuju River Project and Southern Tanzania Joint Venture) and paleochannel associated calcrete and sandstone hosted uranium targets within the Bahi catchment of central Tanzania (Bahi North Project).
The Company is implementing an aggressive exploration program, with a strong emphasis on the application of modern exploration technologies and targeted drilling, to evaluate the potential of these uranium exploration projects.