Information  X 
Enter a valid email address

Mano River Resources (MANA)

  Print      Mail a friend

Friday 02 May, 2008

Mano River Resources

Final Results

Mano River Resources Inc
02 May 2008


                           Mano River Resources Inc.

                     PUBLICATION OF YEAR END 2007 ACCOUNTS

The Board of Mano River Resources Inc. is pleased to release the Accounts of the
Company for the financial year ended December 31st 2007, together with the
Management Discussion & Analysis. The Accounts will be mailed to shareholders
during May and copies made available to the public at the offices of the
Company's Nominated Advisor, Panmure Gordon (UK) Limited, Moorgate Hall, 155
Moorgate, London, EC2M 6XB, UK.

On behalf of the Board of Mano River Resources Inc.

'Luis G Cabrita da Silva'
President and CEO

For further information on Mano River Resources and its exploration programme,
you are invited to visit the Company's website at www.manoriver.com or contact 
one of the following:

Mano River Resources Inc.
Luis da Silva                                  [email protected]                
Tel +44 (0) 20 7299 4212

GMP Securities Europe LLP,
James Hannon,                                  [email protected]
Tel +44 (0) 20 7459 3606

Pelham PR
Charles Vivian/James MacFarlane                [email protected]
Tel +44 (0) 20 7743 6670 / 6375


 The TSX Venture Exchange has not reviewed and does not take responsibility for
                    the adequacy or accuracy of this release



                                             Deloitte & Touche LLP
                                             2800 - 1055 Dunsmuir Street 
                                             4 Bentall Centre
                                             P.O. Box 49279
                                             Vancouver BC V7X 1P4 Canada

                                             Tel: 604-669-4466 
                                             Fax: 604-685-0395 
                                             www.deloitte.ca

Auditors' report

To the Shareholders of Mano River Resources Inc.

We have audited the consolidated balance sheets of Mano River Resources Inc.
(the 'Company') as at December 31, 2007 and January 31, 2007 and the
consolidated statements of income (loss) and comprehensive income (loss),
shareholders' equity, and cash flows for the eleven months ended December 31,
2007 and for the year ended January 31, 2007. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 2007
and January 31, 2007 and the results of its operations and its cash flows for
the eleven months ended December 31, 2007 and for the year ended January 31,
2007 in accordance with Canadian generally accepted accounting principles.

(Signed) Deloitte & Touche LLP

Chartered Accountants

April 29, 2008



Mano River Resources Inc.

 Consolidated statements of income (loss) and comprehensive income (loss) Eleven
                  months ended December 31, 2007 and year ended January 31, 2007

(Stated in U.S. dollars)
                                                   Eleven months   
                                                       ended        Year ended
                                                   December 31,    January 31,
                                                           2007           2007
-------------------------------                    --------------      ---------
                                                                $              $
Expenses                                                958,629        408,080
Professional fees
Depreciation                                            353,315
Management fees                                         283,753        105,500
Foreign exchange loss (gain)                            226,868       (126,677)
Stock-based compensation                                190,003        513,361
Interest on convertible debenture                       181,296              -
Unrealized loss on convertible debt                     168,130              -
Directors fees                                          122,789         35,800
Transfer agent and filing fees                           99,560         67,979
Administrative and office expenses                       63,236          8,747
-------------------------------                    --------------      ---------
                                                      2,647,579      1,012,790
-------------------------------                    --------------      ---------
Dilution gain on shares issued by controlled
company                                              (6,207,005)             -
Interest income                                        (148,041)       (53,181)
-------------------------------                    --------------      ---------
                                                     (6,355,046)       (53,181)
-------------------------------                    --------------      ---------
Income (loss) before non-controlling interest         3,707,467       (959,609)
Non-controlling interest                                310,175              -
-------------------------------                    --------------      ---------
Net income (loss) and comprehensive income (loss)     4,017,642       (959,609)
-------------------------------                    --------------      ---------
Basic and diluted earnings per share                       0.01              -
-------------------------------                    --------------      ---------
Basic and diluted weighted average number of        297,256,188    262,728,613
shares outstanding
-------------------------------                    --------------      ---------
-------------------------------                    --------------      ---------


Consolidated balance sheets
as at December 31, 2007 and January 31, 2007
(Stated in U.S. dollars)                              December 31,   January 31,
                                                            2007          2007
-------------------------------                    --------------      ---------
                                                                 $             $
Assets                                                 4,100,187     1,185,520
Current assets
Cash and cash equivalents
Accounts receivable                                      296,591        88,864
Due from joint venture partners (Note 4)                 112,281        61,847
-------------------------------                     --------------      --------
                                                       4,509,059     1,336,231
Investments (Note 5)                                     184,090       184,090
Property, plant and equipment (Note 6)                 2,002,120             -
Resource properties (Note 7)                           8,888,592     3,955,000
Deferred exploration costs (Note 7)                   29,918,050    23,391,394
-------------------------------                     --------------      --------
Total assets                                          45,501,911    28,866,715
-------------------------------                     --------------      --------
Liabilities                                            1,010,169       196,981
Current liabilities
Accounts payable and accrued liabilities
Interest payable on convertible debenture (Note 8)       181,296             -
Due to related parties (Note 11)                         174,367       133,707
Due to joint venture partners (Note 4)                   274,350       577,175
-------------------------------                     --------------      --------
                                                       1,640,182       907,863
Convertible debenture (Note 8)                         2,260,738             -
-------------------------------                     --------------      --------
Total liabilities                                      3,900,920       907,863
-------------------------------                     --------------      --------
Non-controlling interest (Note 12)                     7,147,317             -
-------------------------------                     --------------      --------
Shareholders' equity                                  34,596,114    34,158,278
Share capital (Note 9)
Equity component of convertible debenture (Note 8)     2,637,802             -
Share subscriptions                                            -       788,461
Contributed surplus                                    1,904,465     1,714,462
Accumulated other comprehensive loss                     (21,755)      (21,755)
Deficit                                               (4,662,952)   (8,680,594)
-------------------------------                     --------------      --------
Total shareholders' equity                            34,453,674    27,958,852
-------------------------------                     --------------      --------
Total liabilities, non-controlling interest and       45,501,911    28,866,715
shareholders' equity
-------------------------------                     --------------      --------
Nature of operations and continuation of business
(Note 1)
Approved by the Board
(Signed) Luis da Silva
-------------------------------
Luis da Silva, Director
(Signed) Bevan J. Metcalf
-------------------------------
Bevan J. Metcalf, Chief Financial Officer



Consolidated statements of cash flows
Eleven months ended December 31, 2007 and year ended January 31, 2007
(Stated in U.S. dollars)
                                                     Eleven months  Year ended
                                                         ended      January 31,
                                                     December 31,
                                                            2007          2007
-------------------------------                    --------------      ---------
                                                                 $             $
Operating activities                                   4,017,642      (959,609)
Net income (loss)
Items not involving cash:                             (6,207,005)            -
Dilution gain on shares issued by controlled company
Non-controlling interest                                (310,175)            -
Stock-based compensation                                 190,003       513,361
Interest on convertible debenture                        181,296             -
Unrealized loss on convertible debt                      190,003             -
Depreciation of fixed assets                             353,315             -
Change in non-cash working capital items                (207,727)      (41,230)
Accounts receivable
Due from joint venture partners                         (353,259)      309,996
Accounts payable and accrued liabilities                 107,065       116,451
---------------------------------                  --------------       -------
                                                      (2,038,842)      (61,031)
-------------------------------                    --------------      ---------
Investing activities                                  (7,611,481)   (7,866,626)
Resource properties
Deferred exploration expenditures
Purchase of capital assets                            (1,649,312)            -
-------------------------------                    --------------      ---------
                                                      (9,260,793)   (7,866,626)
-------------------------------                    --------------      ---------
Financing activities                                     437,836     5,514,791
Issuance of share capital, net of share issue costs
Share subscriptions                                            -       788,461
Convertible debenture                                  4,641,860             -
Cash acquired on consolidation of subsidiary           1,571,438             -
Proceeds from issue of shares of subsidiary            7,522,508             -
Due to related parties                                    40,660        28,665
-------------------------------                    --------------      ---------
                                                      14,214,302     6,331,917
-------------------------------                    --------------      ---------
Net cash inflow (outflow)                              2,914,667    (1,595,740)
Cash, beginning of period                              1,185,520     2,781,260
-------------------------------                    --------------      ---------
Cash, end of period                                    4,100,187     1,185,520
-------------------------------                    --------------      ---------


Supplemental disclosure of non-cash financing and
investing activities

(1)     During the eleven months ended December 31, 2007, the Company issued
2,100,000 common shares on exercise of stock options at a price of Cdn$0.11 per
share and 100,000 common shares at a price of Cdn$0.10 per share.

(2)     Issuance of 300,000 common shares of Stellar Diamonds Ltd., a
wholly-owned subsidiary, to GAIA Resources Fund Ltd. (a company related to Mano
by virtue of director in common) at £1 each for gross proceeds of £300,000
($591,140). As at December 31, 2007, the subsidiary's common shares were not yet
issued and proceeds received were recorded as share subscriptions.

(3)     Transfer of the diamonds properties which had a book value of $8,276,081
in exchange of 19,239,541 shares of Stellar Diamonds Ltd.

(4)     Issuance of 2,809,828 shares of Stellar for mineral property interest in
the amount of $4,933,592.

Mano River Resources Inc.
Consolidated statements of shareholders' equity 
Eleven months ended December 31, 2007

(Expressed in U.S. dollars)
                                                                      
                                                                        Equity         Accumulated
                                                                     component of         other              Total
                           Common shares  Contributed      Share      convertible     comprehensive      shareholders'
                   Number     Amount        surplus     subscriptions  debenture     Deficit     income      equity

--------------- ----------- -----------   -----------     -----------  ----------    ---------  ---------- ------------ 
                                 $               $              $             $           $           $           $
Balance at
January 31,
2006            253,418,318  28,643,487     1,201,101           -           -       (7,720,985)   (21,755)   22,101,848
Net loss for
the year             -           -              -               -           -         (959,609)       -       (959,609)
Cash
transactions:    39,562,500   5,502,741         -               -           -             -           -       5,502,741
Private 
placement at
$0.08 per share
Exercise of
options at
$0.086              140,000      12,050         -               -           -             -           -          12,050
--------------- ----------- -----------   -----------     -----------  ----------    ---------  ---------- ------------ 
                 39,702,500   5,514,791         -               -           -             -                   5,514,791 
                                                                           
Non-cash
transactions:        -           -              -            788,461        -             -           -         788,461
Share subscription
Stock-based                                
compensation         -           -            513,361           -           -             -           -         513,361
--------------- ----------  -----------   -----------     -----------  ----------    ---------  ---------- ------------ 
Balance as at
January 31,
2007           293,120,818   34,158,278     1,714,462        788,461        -       (8,680,594)   (21,755)   27,958,852
Net income for
the period           -           -              -               -           -        4,017,642        -       4,017,642
Cash
transactions:        -           -              -               -      2,637,802          -           -       2,637,802
Equity component 
of convertible 
debenture
Exercise of
options at
$0.093           4,690,000      437,836         -               -           -             -           -         437,836
--------------- ----------  -----------   -----------     -----------  ----------    ---------  ---------- ------------ 
                 4,690,000      437,836         -               -      2,637,802          -           -       3,075,638
Non-cash
transactions:        -           -              -          (788,461)        -             -           -       (788,461)
Share subscription
Stock-based
compensation         -           -            190,003           -           -             -           -         190,003
--------------- ----------  -----------   -----------     -----------  ----------    ---------  ---------- ------------ 
Balance at
December 31,
2007           297,810,818   34,596,114     1,904,465           -       2,637,802   (4,662,952)   (21,755)   34,453,674
--------------- ----------  -----------   -----------     -----------  ----------    ---------  ---------- ------------ 

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

1. Nature of operations

Mano River Resources Inc. ('Mano River' or 'the Company') commenced operations
on July 10, 1996 and is engaged in the acquisition, exploration and development
of gold, iron ore and diamond properties. The Company is in the development
stage and has no source of cash flows other than loans from related parties,
equity offerings and convertible debentures.

These consolidated financial statements are prepared on a going concern basis
which assumes that the Company will be able to realize assets and discharge
liabilities in the normal course of business. The Company's ability to continue
on a going concern basis depends on its ability to successfully raise additional
financing. If the Company cannot obtain additional financing the

Company may be forced to realize its assets at amounts significantly lower than
the current carrying value.

Uncertainty also exists with respect to the recoverability of the carrying value
of certain resource properties. The ability of the Company to realize on its
investment in resource properties is contingent upon resolution of the
uncertainties and continuing confirmation of the Company's title to the resource
properties.

In August 2007, the Company announced its intention to change its fiscal year
end from January 31 to December 31, effective as of December 31, 2007.
Accordingly, for the new 2007 fiscal period, the Company has reported its annual
consolidated financial statements for the eleven month period ended December 31,
2007.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

2. Significant accounting policies

These financial statements have been prepared in accordance with generally
accepted accounting principles in Canada ('Canadian GAAP') and reflect the
following significant accounting policies. The United States dollar has been
identified as the Company's currency of measurement and is used for external
reporting purposes.

(a) Principles of consolidation

These financial statements include the accounts of Mano River Resources Inc. and
its principal subsidiaries, Mano Gold Investments Ltd. (formerly Mano River
Resources Ltd.) (including sub-group Mano River Iron Ore Holdings Ltd.), and
Mano Diamonds Ltd. These financial statements also include a number of
subsidiaries as detailed in the following list:

-------------------------              --------------                     ------
Company                                Place of incorporation         Percentage
                                                                       ownership
-------------------------              --------------                     ------
Mano Gold Investments Limited
(formerly Mano River                   British Virgin Islands            100.0%
Resources Limited) and its
subsidiaries:
Golden Limbo Rock Resources Limited
and its                                Tortola, British Virgin            93. 5%
                                       Islands
subsidiary:
Golden Limbo Rock Ressources SA        Conakry, Guinea                   100.0%
Golden Leo Resources Limited and
its branch:                            Tortola, British Virgin            98.8%
                                       Islands
Golden Leo Resources Limited
(Sierra Leone Branch)                  Freetown, Sierra Leone            100.0%
North West Minerals Ltd.               Mahe, Republic of Seychelles      100.0%
Mano Gold (Liberia) Ltd. (formerly
Lofa Goldiam, Inc.)                    Tortola, British Virgin           100.0%
                                       Islands
and its subsidiary:
Bea Mountain Mining Corporation        Monrovia, Liberia                 100.0%
Mano Nickel Corporation Ltd.           Mahe, Republic of Seychelles      100.0%
-------------------------              --------------                     ------
Mano Diamonds Limited and its
subsidiaries:                          Tortola, British Virgin           100.0%
                                       Islands
Friendship Diamonds Guinee S.A.        Conakry, Guinea                    70.0%
Stellar Diamonds Limited and its
subsidiaries:                          Guernsey                           68.5%
Diamants du Congo Oriental Ltd.        Tortola, British Virgin           100.0%
                                       Islands
Western Mineral Resources
Corporation Inc. and its               Tortola, British Virgin           100.0%
                                       Islands
subsidiary:
Western Mineral Resources Corp.
(Liberia)                              Monrovia, Liberia                 100.0%
Alpha Minerals Inc.                    Monrovia, Liberia                 100.0%
Weasua Diamonds Ltd and its
subsidiary:                            Mahe, Republic of Seychelles       50.0%
Kpo Resources Inc.                     Monrovia, Liberia                 100.0%
Mano Diamonds (Liberia) Inc.           Monrovia, Liberia                 100.0%
Basama Diamonds Ltd and its branch:    Mahe, Republic of Seychelles       49.0%
Basama Diamond Ltd Sierra Leone
Branch                                 Freetown, Sierra Leone            100.0%
Sierra Diamonds Limited and its
branch:                                Tortola, British Virgin           100.0%
                                       Islands
Sierra Leone Diamonds Limited
Sierra Leone Branch                    Freetown, Sierra Leone            100.0%
Mano Diamonds Sierra Leone Ltd.        Freetown, Sierra Leone            100.0%
Guinean Diamond Corporation Ltd.
and its subsidiaries                   Mahe, Republic of Seychelles      100.0%
Mano River Diamants Guinee S.A.        Conakry, Guinea                   100.0%
Ressources Mandala Guinee S.A. R.L.    Conakry, Guinea                   100.0%
East Sierra Diamonds Ltd and its
branch:                                Mahe, Republic of Seychelles      100.0%
East Sierra Diamonds Ltd. Sierra
Leone Branch                           Freetown, Sierra Leone            100.0%
Mandiamo Ltd.                          Mahe, Republic of Seychelles      100.0%
-------------------------              --------------                     ------
Mano River Iron Ore Holdings Ltd.
and its subsidiary:                                                      100.0%
African Iron Ore Ltd. and its
subsidiaries:                          Tortola, British Virgin            80.0%
                                       Islands
Mano River Iron Ore Ltd. and its
subsidiary:                            Tortola, British Virgin           100.0%
                                       Islands
Mano River Iron Ore (Liberia) Inc.     Monrovia, Liberia                 100.0%
Mano River Iron Ore (Guinea) Ltd.      Tortola, British Virgin           100.0%
-------------------------              Islands                            ------
                                       --------------

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

2. Significant accounting policies (continued)

(a)                  Principles of consolidation (continued)

African Iron Ore Ltd. is 80% owned by Mano. One-half of the remaining 20% is
held by Eastbound Resources Ltd., a company controlled by a director of the
Company.

The financial statements of entities which are controlled by the Company through
voting equity interests, referred to as subsidiaries, are consolidated. Variable
interest entities ('VIEs'), which include, but are not limited to, special
purpose entities, trusts, partnerships, and other legal structures, as defined
by the Accounting Standards Board in Accounting Guideline ('AcG') 15,
Consolidation of Variable Interest Entities ('AcG 15'), are entities in which
equity investors do not have the characteristics of a 'controlling financial
interest' or there is not sufficient equity at risk for the entity to finance
its activities without additional subordinated financial support. VIEs are
subject to consolidation by the primary beneficiary who will absorb the majority
of the entities' expected losses and/or expected residual returns. As of
December 31, 2007, the Company does not hold an interest in any VIEs.

All intercompany balances and transactions have been eliminated upon
consolidation.

The shares not legally owned by the Company in the listed subsidiaries, other
than African Iron Ore (Liberia) Ltd., are held by one third party company. This
third party has no beneficial interest in the shares and is holding the shares
for the Company's benefit until the Company and the third party agree on their
ultimate distribution. As the Company retains the beneficial interest in these
shares no non-controlling interest exists with respect to these shares at
December 31, 2007 or January 31, 2007.

(b)                  Non-controlling interests

Non-controlling interests exist in less than wholly-owned subsidiaries of the
Company and represent the outside interest's share of the carrying values of the
subsidiaries. When the subsidiary company issues its own shares to outside
interests, a dilution gain or loss arises as a result of the difference between
the Company's share of the proceeds and the carrying value of the underlying
equity.

(c)                   Cash and cash equivalents

Cash and cash equivalents include cash, and those short-term money market
instruments that are readily convertible to cash with an original term of less
than 90 days.

(d)                  Property, plant and equipment

Property, plant and equipment is comprised of office furniture, automobiles and
various equipment used in the field, that are stated at cost and amortized at
30% per annum on a declining balance basis.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

2. Significant accounting policies (continued)

(e)                  Resource properties and deferred exploration costs

The Company follows the method of accounting for its mineral properties whereby
all costs related to acquisition, exploration and development are capitalized by
property. The carrying value of pre-production and exploration properties is
reviewed periodically and either written off when it is determined that the
expenditures will not result in the discovery of economically recoverable
mineral reserves or transferred to producing mining property, plant and
equipment when commercial development commences.

The recoverability of amounts shown for pre-production and exploration
properties is dependent upon the discovery of economically recoverable mineral
reserves, confirmation of the Company's interest in the underlying mineral
claims, the ability of the Company to finance the development of the properties
and on the future profitable production or proceeds from the disposition
thereof.

The success and ultimate recovery of the Company's exploration costs of its
mineral exploration properties is influenced by significant financial risks,
legal and political risks, commodity prices, and the ability of the Company to
discover economically recoverable mineral reserves and to bring such reserves
into future profitable production.

(f)                    Measurement uncertainty

The preparation of financial statements in conformity with Canadian generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant balances and transactions affected by management
estimates include the valuation of investments, resource properties, deferred
exploration costs, future income tax and stock-based compensation. Actual
results could differ from those estimates.

The amounts used to estimate fair values of stock options issued are based on
estimates of future volatility of the Company's share price, expected lives of
the options, expected dividends to be paid by the Company and other relevant
assumptions.

By their nature, these estimates are subject to measurement uncertainty and the
effect of changes in such estimates on the consolidated financial statements of
future periods could be significant.

(g)                  Loss per share

The basic loss per share is computed by dividing the net loss by the weighted
average number of common shares outstanding during the period. The diluted loss
per share reflects the potential dilution by including other common share
equivalents, such as outstanding stock options and share purchase warrants, in
the weighted average number of common shares outstanding during the period.
Options and warrants as disclosed in Note 6 are anti-dilutive and therefore have
not been taken into account in the per share calculations.

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

2. Significant accounting policies (continued)

(h)                  Foreign currency translation

The Company's foreign currency transactions and the financial position and
results of operations of the Company's integrated subsidiaries are translated
into U.S. dollars using the temporal method. Under this method, monetary assets
and liabilities are translated at the rate in effect at the balance sheet date.
Other balance sheet items, revenues and expenses are translated at the rates
prevailing on the respective transaction dates.

(i)                    Stock-based compensation

The Company follows Canadian Institute of Chartered Accountants Handbook Section
3870, Stock-Based Compensation, which requires that all stock-based awards made
to non-employees and employees be measured and recognized using a fair value
based method. Accordingly, the fair value of options at the date of grant is
accrued and charged to operations, with an offsetting credit to contributed
surplus, on a straight-line basis over the vesting period. If the stock options
are ultimately exercised, the applicable amounts of contributed surplus are
transferred to share capital.

(j)                    Joint ventures

The Company has entered into certain joint venture agreements whereby the
Company earns or allows a third party to earn an interest in certain mineral
properties. These joint venture agreements generally provide for the acquiring
party to incur exploration costs to earn an interest. Currently the joint
ventures in which the Company has an interest are used to hold the property
interest solely; certain have operations or exploration programs conducted by
the joint venture.

(k)                  Income taxes

The Company accounts for income taxes whereby future income tax assets and
liabilities are computed based on differences between the carrying amount of
assets and liabilities on the balance sheet and their corresponding tax values
using the substantively enacted income tax rates at each balance sheet date.
Future income tax assets also result from unused loss carryforwards and other
deductions. The valuation of future income tax assets is reviewed annually and
adjusted, if necessary, by use of a valuation allowance to reflect the estimated
realizable amount.

(l)                    Adoption of new accounting standards and accounting
pronouncements

On February 1, 2007, the Company retrospectively adopted, without restatement of
prior periods, the recommendations included in the following sections of the
Canadian Institute of Chartered Accountants Handbook: Section 1530,
Comprehensive Income, Section 3251, Equity, Section 3855, Financial Instruments
- Recognition and Measurement, Section 3861, Financial Instruments - Disclosure
and Presentation, and Section 3865, Hedges.

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

2. Significant accounting policies (continued)

(l) Adoption of new accounting standards and accounting pronouncements
(continued)

Section 1530, Comprehensive Income, is the change in the Company's net assets
that results from transactions, events and circumstances from sources other than
the Company's shareholders and includes items that would not normally be
included in net loss such as unrealized gains or losses on available-for-sale
investments, gains or losses on certain derivative instruments and foreign
currency gains or losses related to self-sustaining operations. The Company's
comprehensive income, components of other comprehensive income, and accumulated
other comprehensive income are presented in the statements of comprehensive
income and the statements of shareholders' equity. Amounts previously recorded
in 'cumulative translation adjustment' have been reclassified to 'accumulated
other comprehensive income'.

Section 3855, Financial Instruments - Recognition and Measurement, establishes
standards for classification, recognition, measurement, presentation and
disclosure of financial instruments (including derivatives) and non-financial
derivatives in the financial statements. This standard requires the Company to
classify all financial instruments as either held-to-maturity,
available-for-sale, held-for-trading, loans and receivables or other financial
liabilities. Financial assets and liabilities held-for-trading will be measured
at fair value with gains and losses recognized in net income. Financial assets
held-to-maturity, loans and receivables and financial liabilities other than
those held-for-trading will be measured at amortized cost. Available-for-sale
investments are measured at fair value with unrealized gains and losses
recognized in other comprehensive income. The standard also permits the
designation of any financial instrument as held-for-trading upon initial
recognition.

The Company has implemented the following classification of its financial assets
and financial liabilities:

•                        Cash is classified as held-for-trading;

•                        Accounts receivables, due from and due to joint
venture partners are classified as 'loans and receivables' and are measured at
amortized cost using the effective interest rate method. At December 31, 2007,
the recorded amount approximates fair value;

•                        Long-term investments are classified as
'available-for-sale'; and

•                        Short-term and long-term liabilities and accounts
payable are classified as 'other financial liabilities' and are measured at 
amortized cost using the effective interest rate method. At December 31, 2007, 
the recorded amount approximates fair value.

Transaction costs directly attributable to the acquisition or issue of a
financial asset or financial liability are included in the carrying amount of
the financial asset or financial liability, and are amortized to income using
the effective interest rate method.

Derivatives may be embedded in other financial instruments (host instruments).
Embedded derivatives are treated as separate derivatives when their economic
characteristics and risks are not closely related to those of the host
instrument, the terms of the embedded derivative are the same as those of a
stand-alone derivative, and the combined contract is not classified as held for
trading. These embedded derivatives are measured at fair value on the balance
sheet with subsequent changes in fair value recognized in income. The Company
selected February 1, 2007 as its transition date for embedded derivatives. The
Company has not identified any embedded derivatives that are required to be
accounted for separately from the host contract.

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

2. Significant accounting policies (continued)

(l)                  Adoption of new accounting standards and accounting
pronouncements (continued)

Section 3865, Hedges, sets out standards under which hedge accounting can be
applied and how hedge accounting should be executed for each of the permitted
hedging strategies, including fair value hedges, cash flow hedges, and hedges of
a foreign currency exposure of a net investment in a self-sustaining foreign
operation. The Company does not have any derivatives that qualify as hedging
instruments.

(m)              Recent accounting pronouncements

(i)                    Section 1400, General Standards of Financial Statement
Presentation

In June 2007, the CICA amended Section 1400 to include requirements to assess an
entity's ability to continue as a going concern and disclose any material
uncertainties that cast doubt on its ability to continue as a going concern.
This new requirement will be effective January 1, 2008. The Company does not
anticipate any impact to its consolidated financial statements arising from the
accounting pronouncement.

(ii)                   Financial instrument disclosures

As of January 1, 2008, the Company will be required to adopt two new CICA
standards, Section 3862, Financial Instruments - Disclosures, and Section 3863,
Financial Instruments - Presentation, which will replace Section 3861, Financial
Instruments - Disclosure and Presentation. The new disclosure standard increases
the emphasis on the risks associated with both recognized and unrecognized
financial instruments and how those risks are managed. The new presentation
standard carries forward the former presentation requirements. The new financial
instruments presentation and disclosure requirements were issued in December
2006 and the Company is assessing the impact on its consolidated financial
statements.

(iii)                 Capital disclosures

As of January 1, 2008, the Company will be required to adopt CICA Section 1535,
Capital Disclosures, which will require companies to disclose their objectives,
policies and processes for managing capital. In addition, disclosures are to
include whether companies have complied with externally imposed capital
requirements. The new capital disclosure requirements were issued in December
2006 and the Company is assessing the impact on its consolidated financial
statements.

(iv)                 Goodwill and intangible assets

In February 2008, the CICA issued Section 3064, Goodwill and Intangible Assets,
replacing Section 3062, Goodwill and Other Intangible Assets, and Section 3450,
Research and Development Costs. The new pronouncement establishes standards for
the recognition, measurement, presentation, and disclosure of goodwill
subsequent to its initial recognition and of intangible assets by
profit-oriented enterprises. Standards concerning goodwill are unchanged from
the standards included in the previous Section 3062. This Section is effective
in the first quarter of 2009, and the Company is currently evaluating the impact
of the adoption of this new Section on its consolidated financial statements.

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

2.                     Significant accounting policies (continued)

(m) Recent accounting pronouncements (continued)

(v) Convergence with International Financial Reporting Standards

In 2006, Canada's Accounting Standards Board ratified a strategic plan that will
result in Canadian GAAP, as used by public companies, being evolved and
converged with International Financial Reporting Standards ('IFRS') over a
transitional period to be complete by 2011. The official changeover date from
Canadian GAAP to IFRS is for interim and annual financial statements relating to
fiscal years beginning on or after January 1, 2011. As the International
Accounting Standards Board currently has projects underway that should result in
new pronouncements and since this Canadian convergence initiative is very much
in its infancy as of the date of these statements, the Company has not yet
assessed the impact of the ultimate adoption of IFRS on its consolidated
financial statements.

3.                     Investment in Stellar Diamonds Limited

During the eleven months ended December 31, 2007 Mano River completed the launch
of a new diamond company, Stellar Diamonds Limited ('Stellar'), to maximize the
value of its diamonds properties. In exchange for the diamond properties which
had a book value of $8,276,081, the Company received 19,239,541 shares of
Stellar. The exchange was recorded at book value as it was a transaction between
companies under common control. The Company also recognized a recovery relating
to the sale of 5.93% of its interest on consolidation of Stellar in the amount
of $1,084,825. In addition, during the period Stellar entered into private
placements with unrelated parties and issued 8,843,762 shares for a total value
of $15,000,029, resulting in a dilution gain in the amount of $6,207,005, which
was recognized in the consolidated statements of income for the eleven months
ended December 31, 2007. Stellar is a 68.5% owned subsidiary controlled by the
Company and the results of operations and assets and liabilities have been
consolidated with the accounts of the Company with effect from the date of
acquisition.

4.                     Due to joint venture partners

During the eleven months ended December 31, 2007, the Company incurred
exploration expenditures on behalf of joint venture partners who are required to
fund the exploration expenditures to earn their interest in a group of gold and
diamond properties in Sierra Leone and Liberia. As at December 31, 2007 the
amount due from the joint venture partners is $112,281 ($61,847 as at January
31, 2007). In addition, other joint venture partners, Petra Diamonds Ltd. and
Trans Hex Group., incurred costs on behalf of the Company. The amount due to
these joint venture partners as at December 31, 2007 was $274,350 (January 31,
2007 - $577,175).

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

5.                     Investments                December 31, January 31,
                                                          2007       2007
                                                             $          $

Mifergui-Nimba                                         184,090    184,090

The Mifergui-Nimba investment consists of 8,654 shares representing a 3.7%
interest in a Guinean company that holds an interest in a mining licence over a
Guinean iron ore property. The investment is considered an 'available for sale'
financial instrument, which is recorded at cost as Mifergui-Nimba is a private
company with no quoted market price for its shares. Management has reviewed the
carrying value at December 31, 2007 and do not consider that th ere has been any
indication of impairment.

6.                     Property and equipment

                                           Cost $       December 31, 2007
                                                       Accumulated   Net book
                                                      Depreciation   value
                                                             $         $
Machinery and equipment                 2,355,435         353,315    2,002,120


Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

7. Resource properties and deferred exploration costs

                                                   December 31,    January 31,
                                                            2007          2007
--------------------------------                     -------------      --------
                                                          $                    $
                Acquisition costs                        210,000       210,000
               Liberia, West Africa
                       Bea
Kpo                                                      110,000       110,000
Sierra Leone, West Africa                              1,695,000     1,695,000
Pampana, Sonfron and Nimini South
Guinea, West Africa                                    1,940,000     1,940,000
Missamana/Gueliban
Bou ro/Ma nda la                                       4,933,592             -
--------------------------------                     -------------      --------
Closing balances                                       8,888,592     3,955,000
--------------------------------                     -------------      --------
Deferred exploration costs, by project                12,624,484    11,373,310
Liberia, West Africa
Bea - KGL
Kpo                                                    2,223,124     1,759,011
MCA                                                    3,665,227     2,676,519
Putu                                                   1,730,026       477,143
AAR                                                      388,741       238,672
M EA                                                      60,545        59,608
--------------------------------                     -------------      --------
                                                      20,692,147    16,584,263
--------------------------------                     -------------      --------
Sierra Leone, West Africa                              5,232,308     3,048,075
Kono/Nimini Central
Pampana, Sonfon and Nimini South                       1,524,975     1,516,016
Tongo and Gola                                           323,640        31,743
Zim mi/Gorah un                                           99,906             -
--------------------------------                     -------------      --------
                                                       7,180,829     4,595,834
                  --------------------------------   -------------      --------
Guinea, West Africa                                    1,874,833     1,871,734
Missamana/Gueliban
Guinea Iron Ore                                           46,500        46,500
Bouro                                                  1,028,442       293,063
Druzhba and ex De Beers                                   30,136             -
Mandala and Ouria                                         69,164             -
--------------------------------                     -------------      --------
                                                       3,049,075     2,211,297
--------------------------------                     -------------      --------
Democratic Republic of Congo                              80,824             -
Socerdemi/REMEC
--------------------------------                     -------------      --------
Recovery relating to sale of mineral property on      (1,084,825)            -
consolidation of Stellar
--------------------------------                     -------------      --------
Closing balances - see Schedule                       29,918,050    23,391,394
--------------------------------                     -------------      --------

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

7. Resource properties and deferred exploration costs (continued)

As mentioned in Note 3, during the eleven months ended December 31, 2007, the
Company completed a reorganization of its diamond assets consisting of the
following transactions:

(a)               pursuant to a share purchase agreement between Stellar
Diamonds and Mano Diamonds Limited ('Mano Diamonds'), a wholly-owned subsidiary
of the Company, Mano Diamonds transferred its diamond interests in Liberia and
Sierra Leone including a 49% interest in the Kono project, to Stellar Diamonds,
and in consideration Stellar Diamonds issued 15,442,021 of its shares to Mano
Diamonds;

(b)               pursuant to a second share purchase agreement among Stellar
Diamonds, Mano Diamonds and two arm's length parties, Searchgold Resources Inc.
('Searchgold') and Siafa Koulibaly ('Koulibaly'), Searchgold, Mano Diamonds and
Koulibaly transferred their Guinean diamond interests consisting of a 100%
interest in the Bouro/Mandala alluvial property to Stellar Diamonds, and in
consideration Stellar Diamonds issued 2,672,629 of its shares to Searchgold,
2,678,117 of its shares to Mano Diamonds, and 137,199 of its shares to
Koulibaly. The exchange was recorded at book value as it was a transaction
between companies under common control; and

(c)                pursuant to an assignment agreement between the Company and
Stellar Diamonds, the Company transferred certain contractual rights to a
Guinean diamond exploration database that it had obtained under an agreement
with Societe Debsam Guinee Sarl (a subsidiary of DeBeers) dated September 7,
2007 to Stellar Diamonds and in consideration Stellar Diamonds issued up to
1,119,403 of its shares to the Company. The exchange was recorded at book value
as it was a transaction between companies under common control.

In addition, during the period Stellar entered to private placements with
unrelated parties and issued 8,843,762 shares for a total value of $15,000,029,
resulting in a dilution gain in the amount of $6,207,005, which was recognized
in the consolidated statements of income and comprehensive income for the eleven
months ended December 31, 2007.

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)


   7.  Resource properties and deferred exploration costs (continued)

                                         January 31,                   December 31,
Properties                                        2007   Additions            2007
--------------------------                  -----------  ---------         ---------
                                                $              $                   $
                  Gold                      11,373,310     1,248,824    12,622,134
          Liberia, West Africa
                Bea Gold
M EA                                            59,608           937        60,545
--------------------------                   -----------     ---------     ---------
                                            11,432,918     1,249,761    12,682,679
Sierra Leone,
West Africa                                  1,161,878             -     1,161,878
Sonfon gold
Pampana gold                                   242,232             -       242,232
Nimini gold                                    111,906         8,959       120,865
--------------------------                   -----------     ---------     ---------
                                             1,516,016         8,959     1,524,975
--------------------------                   -----------     ---------     ---------
Guinea, West
Africa                                       1,871,734         3,099     1,874,833
Missamana/Gueliban
--------------------------                   -----------     ---------     ---------
                                            14,820,668     1,261,819    16,082,487
--------------------------                   -----------     ---------     ---------
Diamond                                      2,676,518       988,709     3,665,227
Liberia, West Africa
MCA
KPO Diamonds                                 1,759,012       464,112     2,223,124
Bea Diamond                                          -         2,350         2,350
AAR                                            238,672       150,069       388,741
--------------------------                   -----------     ---------     ---------
                                             4,674,202     1,605,240     6,279,442
Sierra Leone,
West Africa                                  3,048,075     2,184,233     5,232,308
Nimini-Kono Central
Tongo and Gola                                  31,743       291,897       323,640
Zimmi/Gorahun                                        -        99,906        99,906
--------------------------                   -----------     ---------     ---------
                                             3,079,818     2,576,036     5,655,854
Guinea, West
Africa                                         293,063       735,379     1,028,442
Bo u ro
Druzhba/ex De
Beers                                                -        30,136        30,136
Mandala/Ouria                                        -        69,164        69,164
--------------------------                   -----------     ---------     ---------
                                               293,063       834,679     1,127,742
--------------------------                   -----------     ---------     ---------
Democratic
Republic of
Congo                                                -        80,824        80,824
Socerdemi, REMEC
--------------------------                   -----------     ---------     ---------
Recovery
relating to
sale of
mineral                                              -    (1,084,825)   (1,084,825)
property on consolidation of
Stellar
--------------------------                   -----------     ---------     ---------
                                             8,047,083     4,011,954    12,059,037
--------------------------                   -----------     ---------     ---------
Iron ore                                       477,143     1,252,883     1,730,026
Liberia, West Africa
Putu
--------------------------                   -----------     ---------     ---------
Guinea, West
Africa                                          46,500             -        46,500
Guinea iron ore
--------------------------                   -----------     ---------     ---------
                                               523,643     1,252,883     1,776,526
--------------------------                   -----------     ---------     ---------
Total                                       23,391,394     6,526,656    29,918,050
--------------------------                   -----------     ---------     ---------

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

7. Resource properties and deferred exploration costs (continued)

(a) Liberia, West Africa

The Company holds two mineral development agreement ('MDA') licences in Liberia
for gold and diamond development. These MDAs are in Western Liberia and consist
of the Bea Mountains and Kpo Range and are valid for 25 years with an option to
renew for another 25 years. Both these MDAs are dated November 28, 2001 and were
approved on March 14, 2002. The MDAs will allow the Company to conduct
pre-feasibility work and bankable feasibility work including, if required, pilot
mining.

On April 22, 2004 the Company executed a Mineral Cooperation Agreement with the
Ministry of Lands Mines and Energy granting exploration rights over a 15,000
square kilometers licence in western Liberia. The effective operational date for
the three year licence was January 22, 2005, which can be extended by two years
at Mano's option. During the first half of 2007 the Company reduced its holding
down to 11,550 square kilometres. Subsequently, at the end of the MCA tenure the
Company submitted an application to convert 3,000 square kilometres to a Mineral
Exploration Agreement (MEA) with the balance being relinquished. This
application is currently with the Ministry of Lands, Mines and Energy. Mano is
not aware of any adverse impact on the licence, political or otherwise.

The Company acquired one Mineral Exploration Agreement ('MEA') licence on May
18, 2005, which is valid for five years and covers 425 square kilometers
centered over the Putu iron ore prospect in eastern Liberia.

(i) Trans-Hex Joint Venture

On June 6, 2002, the Company signed a heads of agreement for the creation of a
diamond exploration and development joint venture ('JV') in Liberia with Trans
Hex Group Limited ('THG') of South Africa. The full JV agreement was
subsequently signed on October 12, 2006.

The JV will focus on advancing the cluster of diamondiferous kimberlite pipes
discovered by Mano within the area designated in its 25 year MDA licence, which
covers a 200 square kilometer area of the Kpo Range in western Liberia. THG has
earned a 50% indirect interest in the MDA through Weasua Diamonds Ltd., by
completing an exploration and evaluation program involving a total expenditure
of approximately $2 million. Exploration continues to be jointly funded by the
joint venture partners. At Stellar's option, THG may be granted the right to
sole fund the feasibility study and construction, to the start of production
from one or more kimberlites, in order to earn an additional 19% interest in the
MDA. As at December 31, 2007, Trans-Hex has earned 50% interest and is the
operator of the joint venture.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

7. Resource properties and deferred exploration costs (continued)

(a) Liberia, West Africa (continued)

(ii) AAR Joint Venture

On March 23, 2005, the Company signed a Joint Venture ('JV') agreement with
African Aura Resources ('AAR') targeting diamonds over an area of 400 square
kilometers held by AAR in western Liberia.

The JV agreement entitles Mano to earn up to a 78% interest in the diamond
rights of the property through the completion of a four-year, four-phase
exploration program comprising:

Phase 1: Mano will commit to a minimum expenditure of $112,500 and make a cash
payment to AAR of $12,500, and upon completion of this phase of work will have
earned the right to proceed to Phase 2.

Phase 2: Within a period of 12 months complete an exploration program involving
minimum expenditure of $500,000 and make a cash payment to AAR of $25,000. Upon
completion of this phase, Mano will have earned a 46% equity interest in the
diamond rights of the property. This phase is ongoing and African Aura Resources
granted Mano an extension in order to complete this phase of work.

Phase 3: Mano may elect to increase its interest in the diamond rights of the
property to 64% through financing the completion of a bulk sampling program
within a further period of 12 months and make a cash payment to AAR of $25,000.

Phase 4: Mano can increase its interest in the diamond rights of the property to
78% through sole funding a feasibility study over one or more kimberlites
considered to have economic potential, within a further period of 12 months and
make a cash payment to AAR of $25,000.

Upon completion of the feasibility study, AAR may grant Mano the option to sole
fund mine construction, which will result in Mano's interest in the diamond
rights of the property rising to 90%. The Government of Liberia will have a 10%
free carried interest in the mining venture, as stipulated by the mining law,
and AAR will retain a 2.25% gross profits royalty on project diamond sales.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

7. Resource properties and deferred exploration costs (continued)

(b) Sierra Leone, West Africa

The Company holds nine prospecting licences and an exclusive reconnaissance
licence for diamonds, gold and base metals in Sierra Leone. The licences are
located throughout the eastern and northern provinces of the country and consist
of Sonfon, Sierra Leone South East, Pampana South, Pampana North, Pampana North
East, Nimini Central, Nimini South, Njaiama and Yengema.

(i)                    Petra Diamonds Joint Venture

On September 10, 2004, the Company and Petra Diamonds ('Petra') entered into a
joint venture for the production of diamonds from the underground mining of
diamond-bearing kimberlite dykes (the 'Lion' dykes) defined within Mano's three
contiguous licence areas (Yengema, Njaiama and Nimini South) that cover 260
square kilometers in the Kono diamond district ('Kono Licences') of Sierra
Leone.

Under the terms of the agreement Petra will earn a 51% interest in Mano's 100%
owned subsidiary, Basama Diamonds Ltd., by spending $3 million over three years.
As at December 31, 2007, Petra has earned this interest and is the operator of
the joint venture.

(ii)                   BHP Billiton Joint Venture

On May 7, 2004, the Company signed a memorandum of agreement ('MoA') with BHP
Billiton to explore for diamonds and other minerals over its 9,700 square
kilometers Regional Exclusive Prospecting Licence ('REPL') in the South Eastern
quadrant of Sierra Leone.

The MoA commits the partners to concluding a full joint venture agreement once
the first phase of a four-phase exploration and development program has been
completed as follows:

Phase 1: Commit to a minimum expenditure of $800,000 to earn the right to
proceed to Phase 2.

Phase 2: A minimum expenditure of $2,572,000. Upon completion of this
phase BHP Billiton will earn a 51% equity interest in the project.

Phase 3: Subject to satisfactory results, BHP Billiton may elect to earn an
additional 19% through financing the completion of a pre-agreed feasibility
program, over one or more kimberlites considered to have economic potential,
within three years of completion of Phase 2.

Phase 4: At Mano's option, BHP Billiton can earn an additional 10% through
financing to completion of mine construction. Mano may elect, however, to
co-finance Phase 4 and maintain the project equity at BHP Billiton 70% and Mano
30%.

Subsequent to December 31, 2007, BHP Billiton joint venture was terminated. As
part of the termination agreement the Company retained 100% of the property and
charged deferred exploration costs for $291,897, the funds which were due from
the joint venture partner at termination.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

7. Resource properties and deferred exploration costs (continued)

(b) Sierra Leone, West Africa (continued)

(iii) Golden Star Joint Venture

On November 24, 2003, the Company signed a comprehensive letter of agreement
('LoA') with Golden Star Resources ('GSR'), which contains all the main terms of
a joint venture covering three licence packages ('the Joint Venture Licences')
within the highly prospective greenstone gold bearing belts in Sierra Leone.

Under the terms of the LoA, GSR can earn a 51% interest in the gold rights of
the licences currently held by Mano through its subsidiary, Golden Leo Resources
Limited, as follows:

1.                     Pampana North, Pampana South and Pampana North East
Licences;

2.                     Sonfon North and Sonfon South Licences; and

3.                     Nimini Central and Nimini South Licences.

The LoA provides for a 60 day period for due diligence and the completion of the
full joint venture agreement. Under the proposed joint venture, GSR will make an
investment of $6 million over a staged five year period in order to earn a 51%
interest in the Joint Venture Licences, earning a final interest of up to either
71% or 85% if Mano does not co-fund respectively the feasibility study nor mine
development.

The main terms of the LoA are as follows:

Stage 1: GSR commits to spend a minimum $1,000,000 by December 31, 2004, to earn
the right to proceed to Stage 2. No interest is earned by GSR at the end of this
stage. A decision to proceed with the next stage was made by December 31, 2004.

Stage 2: GSR commits to spend up to $1,750,000 on the project by December 31,
2006, with Mano operating an agreed program. No interest earned by GSR. A
decision to proceed with the next stage must be made by December 31, 2006.

Stage 3: GSR is committed to spend a further $2,500,000 on the project and may
elect to manage and operate at the beginning of this stage. The expenditure must
be completed by December 31, 2007.

Upon completion of this stage GSR will have earned a 51% interest in the Nimini
and Sonfon Licences, subject to having expended a minimum of $2 million and $1.5
million, respectively, on these two projects.

Stage 4: GSR may spend a further $750,000 on the Pampana Licences by December
31, 2008 to earn a 51% interest. A decision to proceed with this stage must be
made by December 31, 2007. At the end of this stage GSR will have earned a 51%
interest in the Pampana Licences.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

7. Resource properties and deferred exploration costs (continued)

(b)                  Sierra Leone, West Africa (continued)

(iii) Golden Star Joint Venture (continued)

Within 120 days of completing Stage 3 in the case of the Nimini and Sonfon
Licences, and Stage 4 in the case of the Pampana Licences, GSR may elect to
proceed to a feasibility study ('FS') for any or all of the projects. Mano has
the right to elect to contribute pro rata to the FS to retain its 49% equity. If
it decides not to do so, GSR may sole-fund the FS to earn a further 14%
interest, thereby taking its equity to 65%.

Golden Star has terminated the two Nimini licences from the agreement and the
Pampana licence. In a letter dated May 11, 2007, Mano agreed to a

12 month extension to the period for the completion of Stage 3 expenditures,
i.e. to December 31, 2008, now focused on the Sonfon licences. Therefore GSR
will have a total of 24 months to complete Sonfon phase 3.

Upon completion of a positive FS on any or all of the projects GSR may elect to
proceed to mine development. Mano has the right to contribute pro rata to any
mine development to retain its 49% interest or dilute to either a 15% or 29%
free carried interest depending on its earlier elections to co-fund the
feasibility study and mine construction. Mano will also retain a 2% net smelter
return ('NSR') royalty on production in excess of the first 1 million ounces of
gold from each project.

(c)                   Guinea, West Africa

The Company holds 498 square kilometers of exploration permits in eastern Guinea
through the contiguous Missamana and Gueliban properties.

The Company acquired three contiguous exclusive exploration licences on May 6,
2005, which cover a total of 405 square kilometers centered over the diamond
producing town of Bouro in the Kerouane district of south eastern Guinea.

(i) SearchGold Joint Venture

On January 26, 2006, the Company entered into a 50/50 Joint Venture ('JV') with
SearchGold Resources ('SearchGold') in Guinea. The objective of the JV is to
rapidly establish alluvial diamond production on the Mandala property of
SearchGold, whilst conducting bulk sampling to determine the economic potential
of Mano's adjacent high-grade Bouro kimberlite dykes. A budget of $4.2 million
was assigned for the first operating year program required (2007 and 2008), to
be funded equally by Mano and SearchGold.

Under the JV, a two-pronged program will be undertaken consisting of systematic
delineation and bulk sampling of the Bouro kimberlite dykes, with particular
priority emphasis on the Bouro North dyke, which Mano considers to have the
highest grade potential based on work to date. This dyke has a strike length of
5 kilometers, established by field mapping, drilling and geophysics.

During the eleven months ended December 31, 2007, the Company's majority owned
subsidiary Stellar Diamonds acquired the interests consisting of a 100% interest
in the Bouro/Mandala alluvial property.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

7. Resource properties and deferred exploration costs (continued)

(c)                   Guinea, West Africa (continued)

(ii)                   Navasota Joint Venture

On July 27, 2004, the Company and its subsidiary signed a Letter of Agreement
with Navasota Resources Ltd., for Navasota to acquire up to a 60% interest in
Mano's Missamana and Gueliban gold licences.

Pursuant to the Letter of Agreement between Navasota and Mano, Navasota may earn
an initial 51% interest in the properties by spending $125,000 over the first 12
months which Mano will match (Phase 1) and spending an additional $1,375,000
over a 24 month period following the completion of Phase 1 (Phase 2). Navasota
may, at its option, acquire a further 9% by:-spending a further $500,000 over a
12 month period following the completion of Phase 2 (Phase 3). Phase 1 has been
completed and Navasota are being granted a 12 month extension to complete Phase
2, on the understanding it commences work in the third quarter of 2007. During
the eleven months ended December 31, 2007, the Novasota joint venture was
terminated.

(iii)                 De BEERS Joint Venture

On September 7, 2006, an Agreement was signed with the De Beers subsidiary,
DEBSAM GUINEA, under which Mano gained exclusive access for 18 months to a
diamond exploration database for Guinea assembled by DEBSAM over the previous 13
years. In the event of a discovery which is subsequently put into production by
Mano, DEBSAM will have the right to a production royalty or back-in rights if
the scale of the project exceeds a threshold of US$70 million revenue per year.
In March 2008, the exclusive access to the diamond exploration database expired.
The Company had not recognized any value for these licences.

(d)                  Democratic Republic of Congo

(i) BHP Billiton Joint Venture

On December 4, 2007, Stellar Diamonds Ltd. ('Stellar'), the Company's
subsidiary, signed a memorandum of understanding with BHP Billiton over
exploration licences covering 10,852 square kilometres in the north of the
Democratic Republic of Congo.

The licences are subject to an existing option agreement between BHP Billiton
and Socerdemi SPRL, a Congolese registered company which holds the lice nces.

The memorandum of understanding entitles Stellar to earn 50 per cent of the BHP
Billiton entitlement in the project. Under the option agreement, BHP Billiton
has the right to either enter into a JV with Socerdemi and earn an 85-per-cent
participating interest through financing exploration to completion of a
feasibility study, or elect to purchase from Socerdemi 100 per cent of the
licences at any time during the five years option period by paying to Socerdemi
$100,000 (U.S.). Socerdemi would then retain a 2-per-cent net profits royalty in
any future diamond sales, which can equally be bought out by BHP Billiton for
$500,000.

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

8.                  Convertible debenture

On September 27, 2007 the Company entered into convertible subscription
agreements to raise £2.3 million ($4,641,860) with certain lenders. The
convertible debenture is repayable on August 1, 2010 and bear interest at 9% per
annum. The principal amount is convertible by the holders into common shares of
the Company at a conversion price of £0.14 per share at any time prior to
maturity. Alternatively, the Company has the option to demand the conversion
after a period of three years, if the common shares of the Company have traded
at an average 30% premium to the conversion price for a minimum period of 21
trading days previous to the conversion date.

The convertible debenture issued has been segregated into its debt and equity
components. The financial liability component, representing the value allocated
to the liability at inception, is recorded as a long-term liability. The
remaining component, representing the value ascribed to the holders' option to
convert the principal balance into common shares, is classified in shareholders'
equity as 'Equity component of convertible debenture'. These components have
been measured at their respective fair values on the date the convertible
debenture was originally issued.

As the debentures are convertible into common shares at the option of the
holder, they have been accounted for in their component parts. The Company has
determined the fair value of the liability to make future payments of principal
and interest to be $2,260,738 and the fair value of the holders' conversion
option to be $2,637,802. The fair value of the conversion option was based on
using the Black-Scholes option pricing model with the following assumptions: no
dividends were paid, a weighted average volatility of the Company's share price
of 172%, a weighted average annual risk free rate of 4.64% and an expected life
of three years. The residual was allocated to the debt.

During the eleven months ended December 31, 2007, the Company incurred interest
expense relating to the debentures of $181,296. As at December 31, 2007 the
entire balance remained payable as the payment date had not yet been achieved.

9.                  Share capital

(a)                Authorized

Unlimited number of common shares without par value

(b)                Issued

During the eleven months ended December 31, 2007:

(i)                  the Company issued 2,000,000 common shares on exercise of
stock options at a price of Cdn$0.11 per share and 100,000 common shares at a
price of Cdn$0.10 per share. Cash proceeds of $198,276 for exercise of these
stock options were received by the Company on January 31, 2007 and recorded as
subscriptions under shareholders' equity; and

(ii)                590,000 stock options were exercised at a price of Cdn$0.10
per share and 15,000 options expired unexercised; and 2,000,000 stock options 
were exercised at a price of Cdn$0.11 per share and 1,000,000 options expired
unexercised. Total option exercise proceeds were $239,560.

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

9. Share capital (continued)

(b)                  Issued (continued)

During the year ended January 31, 2007:

(i)                  the Company completed a brokered private placement of
39,562,500 common shares at £0.08 each for gross proceeds of £3,165,000
($5,852,085). A commission of 4% or £126,600 ($234,083) of the gross proceeds
was paid on the placement as well as a corporate finance fee of £45,000
($83,205) and out of pocket expenses of £12,645 ($23,380) to the broker on
closing of the placement. Other financing costs amounted to $26,400;

(ii)                140,000 stock options were exercised for proceeds of
$12,050; and

(iii)               the Company entered into private placement of 300,000 common
shares of a wholly-owned subsidiary with GAIA Resources Fund Ltd. (a company
related to Mano by virtue of director in common) at £1 each for gross proceeds
of £300,000. As at January 31, 2007, the subsidiary's common shares were not yet
issued and proceeds received were recorded as share subscriptions. Also in
January 2007, 2,100,000 stock options were exercised at $0.11 each. As at
January 31, 2007, the Company's shares were not yet issued, and proceeds
received were recorded as share subscriptions.

(c)                   Stock options

The Company has a stock option plan under which directors, officers, consultants
and employees of the Company are eligible to receive stock options. The Board of
Directors shall determine the terms and provisions of the options at the time of
grant. Options under the plan generally have a term of five years and are vested
at the date of grant. The exercise price of each option equals the market value
of the Company's common shares on the date of grant.

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

9. Share capital (continued)

(c) Stock options (continued)

A summary of the status of the Company's stock option plan as at December 31,
2007 and January 31, 2007 and changes during the periods then ended are as
follows:

---------------                --------    ----------     ---------      -------
                                        December 31,                 January 31,
                                               2007                       2007
---------------                --------    ----------     ---------      -------
                            Number of     Weighted      Number of     Weighted
                             options       average       options      average
                                          exercise                    exercise
                                            price                      price
                                          per share                  per share
---------------                --------    ----------     ---------      -------
                                             Cdn$                         Cd n$
Balance outstanding,       14,980,000          0.16    13,130,000         0.16
beginning of period
Activity during the           900,000          0.23     2,980,000         0.23
period
Options granted
Options exercised          (4,000,000)         0.11      (140,000)        0.10
Options exercised            (690,000)         0.10             -            -
Options expired            (1,000,000)         0.11             -            -
Options expired              (225,000)         0.23             -            -
Options expired               (50,000)         0.24             -            -
Options expired               (15,000)         0.10      (990,000)        0.22
---------------                --------    ----------     ---------      -------
Balance outstanding,        9,900,000          0.21    14,980,000         0.16
end of period
---------------                --------    ----------     ---------      -------


     As at December 31, 2007 the following stock options were outstanding:

          ------------                  ---------- ------------
             Number of              Exercise price Expiry date
         stock options                   per share
           outstanding
          ------------                  ---------- ------------
                                           Cd n$                       
             905,000                       0.100   August 14, 2008
           2,720,000                       0.240   March 23, 2009
           2,620,000                       0.215   July 25, 2010
           2,755,000                       0.230   July 31, 2011
             600,000                       0.230   March 16,2012
             300,000                       0.230   May 20,20 12
          ------------                  ---------- ------------
           9,900,000
          ------------                  ---------- ------------


The weighted average grant date fair value per share of stock options granted in
the year ended December 31, 2007 was $0.21 (2006 - $0.16) and total stock-based
compensation expense for the year was $190,003 (Jan 31, 2007 - $513,361). The
fair values of these options were determined on the date of grant using the
Black-Scholes option pricing model with the following assumptions: no dividends
were paid (January 31, 2007 - no dividends), a weighted average volatility of
the Company's share price of 146% and 172% (2007 - 134.1%), a weighted average
annual risk free interest rate of 3.92% and 4.11% (2007 - 4.103%) and an
expected life of five years (2007 - five years).

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

10. Income taxes

The provision for income taxes reported differs from the amounts computed by
applying the cumulative Canadian federal and provincial income tax rates to the
loss before tax provision due to the following:

                                                  December 31,     January 31,
                                                            2007          2007
----------------------------                         -------------      --------
                                                                 $             $
Statutory tax rate                                         34.1 2%       35 .62%
----------------------------                         -------------      --------
Expected income tax expense (recovery)                 1,370,819      (328,522)
Non-deductible expenses - stock based                     64,829       182,859
compensation
Unrealized dilution gain on shares issued             (2,117,830)            -
by subsidiary company
----------------------------                         -------------      --------
Tax losses not recognized in the period that the         682,182       145,663
benefit arose
----------------------------                         -------------      --------
                                                               -             -
----------------------------                         -------------      --------

The approximate tax effect of each type of temporary difference that gives rise
to the Company's future tax assets are as follows:

                                               December 31,        January 31,
                                                       2007               2007
----------------------------                    -------------           --------
                                                            $                  $
Operating loss carryforwards                      2,008,940          1,367,354
Less: Valuation allowance                        (2,008,940)        (1,367,354)
----------------------------                    -------------           --------


The Company has reduced the value of the potential future income tax asset to
$Nil through the application of a valuation allowance as the Company does not
have any current source of income to which the tax losses can be applied.

At December 31, 2007, the Company had the following loss carryforwards available
for tax purposes:

                                                       Amount      Expiry
                                                         $

Country
Canada                                              3,623,648    2008 - 2027


Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

11.                 Related party transactions The following table summarizes
the Company's related party transactions for the period:

                              -------------                             -------
                               December 31,                         January 31,
                                     2007                                 2007
                              -------------                              -------
                                          $                                    $
(a) incurred management 
services fees with a 
company related by a 
director in common                 95,000                              105,500

(b) incurred management 
fees by directors                 188,753                                    -

(c) incurred directors fees       119,789                               35,800

(d) incurred professional 
services with a law firm in 
which a director of the 
Company is a principal               -                                  98,696
                              -------------                              -------

These transactions are in the normal course of operations and are measured at
the exchange amount, which is the amount of consideration established and agreed
to by the related parties.

At the end of the period, the amounts due to related entities are as follows:


                                                December 31,        January 31,
                                                       2007               2007
----------------------------                    -------------           --------
                                                       $                   $
Director's companies                                154,414             76,509
Various directors                                    19,953             46,306
Director's partnership                                    -             10,892
----------------------------                    -------------           --------
                                                    174,367            133,707
----------------------------                    -------------           --------

These balances are payable on demand and have arisen from the provision of
services referred to above.

12.                 Non-controlling interest

                                     Mano Ownership  Carrying value December 31,
                                          %           of net equity     2007 $

Stellar Diamonds Ltd.                       68.51     21,597,518     6,801,312     
African Iron Ore Ltd.                       80.00      1,730,025       346,005         
                                                                     7,147,317
                                                                      

Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

12. Non-controlling interest (continued)

(a)               As described in Note 3, the Company transferred its diamonds
properties which had a book value of $8,276,081 to Stellar in exchange of
19,239,541 shares of Stellar. The exchange was recorded at book value as it was
a transaction between companies under common control. After that, Stellar
completed two private placements in order to raise funds to finance the
development of its diamond interests. The private placements took place in two
tranches. In the first tranche 1,211,890 shares were issued at an effective
price of £0.87 per share. 918,484 of those shares were issued for cash
consideration, raising proceeds of £800,000 (US$1,571,438), while the remaining
293,406 shares were issued to the subscribers in consideration for forfeiture of
certain benefits as a result of the diamond reorganization. In the second
tranche 4,822,044 shares were issued at a price of £0.87 1 per share for
proceeds of £4,200,000 (US$8,611,361). In addition, the Company issued 2,411,022
warrants with two year term and exercise price of £1.20 pence per share as well
as 260,390 adviser's options with a two year term and exercise price of £0.871
per share. As a result of these shares issuances by Stellar, the Company
recorded a dilution gain of $6,207,005. Gains on shares issued by affiliated
companies arise when the ownership interest of the Company in a controlled
entity is diluted as a result of shares issuances of the investee company. The
Company does not receive any cash proceeds (nor is required to make any
payments) from these transactions

(b)               African Iron Ore Ltd., the holding company for the Company's
iron ore interests, is 80% owned by Mano. One-half of the remaining 20% is held
by Eastbound Resources Ltd., a company controlled by a director of the Company.

13. Segmented information

(a)                  Industry in formation

The Company operates in one reportable operating segment, being the acquisition
and exploration and development of resource properties.

(b)                  Geographic information

Revenues from operations in the eleven months ended December 31, 2007 were
derived from interest income of which $3,951 (January 31, 2007 - $3,950) was
earned in Canada and $144,090 (January 31, 2007 - $144,091) was earned in the
United Kingdom.

The Company's non-current assets by geographic location are as follows:

                                               December 31,          January 31,
                                                      2007                2007
-------------------------                      -------------            --------
                                                           $                   $
Liberia                                         21,012,147          17,481,438
Guinea                                          11,024,052           4,335,387
Sierra Leone                                     8,875,829           5,713,659
Democratic Republic of Congo                        80,824                   -
-------------------------                      -------------            --------
                                                40,992,852          27,530,484
-------------------------                      -------------            --------



Mano River Resources Inc.

Notes to the consolidated financial statements December 31, 2007 and January 31,
2007

(Stated in U.S. dollars)

14.              Financial instruments

Fair value estimates of financial instruments are made at a specific point in
time, based on relevant information about financial markets and specific
financial instruments. As these estimates are subjective in nature, involving
uncertainties and matters of significant judgment, they cannot be determined
with precision. Changes in assumptions can significantly affect estimated fair
values.

The Company's financial assets and liabilities are cash, amounts receivable,
investments, accounts payable and due to related parties. The fair values of
these financial instruments are estimated to approximate their carrying values
due to their immediate or short-term nature except for investments whose fair
value is not readily determinable. Due to the nature of the Company's
operations, there is no significant credit or interest rate risk. As at December
31, 2007, the Company held approximately $2,191,085 cash in bank accounts
denominated in U.K. pounds. The Company has taken no action to reduce its
exposure to foreign currency risk.

The Company places its cash and cash equivalents with high credit rated
financial institutions.

The Company does not engage in trading or other speculative activities with
respect to financial instruments.

15.                 Subsequent events Subsequent to eleven months ended December
31, 2007:

(a)               In March 2008 BHP Billiton withdrew from the Joint Venture on
Togo/Gola. The Company retains 100% of the property. The Company charged the
deferred exploration costs for the funds which were due from the joint venture
partner on termination.

(b)               On January 29, 2008 the Company granted incentive stock
options to certain directors, employees and consultants to purchase up to an
aggregate of 9,045,000 common shares in the share capital of the Company
exercisable for a period of five years at a price of Cdn$0.20 per share.

(c)                On March 31, 2008, the Company reported that its majority
owned subsidiary Stellar Diamonds has completed a non-brokered private placement
of 2,375,000 new ordinary shares of 1 pence each in Stellar at 100 pence per
share, raising gross proceeds of £2.375 million

Mano River Resources Inc.

Consolidated schedules of deferred exploration costs as at December 31, 2007 and
January 31, 2007

(Stated in U.S. dollars)
                                                                                                                      

                                                                                                           December 31,
                             Bea        MCA       Putu      AAR     Bouro Kono/Nimini      REPL      Other        2007
------------------    ---------- ---------- ----------  -------- --------- ----------  --------  --------- -----------
                               $          $          $        $          $          $                    $           $
Assays and
geochemical               92,203     29,231        391        -                     -     6,194      2,103     130,122
Communications            12,925     20,416        969      908                     -     1,954          -      37,172
Community
relations                      -          -          -        -      4,298          -     3,386      1,839       9,523
Consultants              122,534     36,654     96,381        -    377,166          -    57,676     31,867     722,278
Data, images,
reports and
maps                       4,200          -          -        -          -          -         -        140       4,340
Drilling                 166,658          -    690,344        -          -          -   160,007          -   1,017,009
Feasibility                4,992          -          -        -          -          -         -          -       4,992
General
operating
costs                     96,379     76,305     96,693   11,582     84,021    168,570         -     68,616     602,166
General field
costs                     86,282     74,376     86,562   10,368    146,412     57,731         -     48,941     510,672
Geologists'
support                   38,610     23,997      9,272    4,532        245          -       121        955      77,732
Geophysics
including
imagery                    6,889      5,875      2,973    2,022     19,639                    -      7,595      44,993
Infrastructure           104,239        632      3,935        -          -          -         -          -     108,806
Licenses and
permit fees               19,768    144,035     46,506   24,769     11,218     18,258         -     80,505     345,059
Metallurgy                14,887          -          -        -          -          -         -          -      14,887
Exploration
advances                       -          -          -        -          -  1,939,674         -    396,228   2,335,902
Project/field
office costs,
other                    116,991     84,445     43,471    3,688      6,892               14,228     43,881     313,596
Reconnaissance
and
geochemical                    -     56,225      8,028    2,710          -          -         -          -      66,963
Recovered
expenses                       -    (71,180)         -        -          -          -         -          -     (71,180)
Rehabilitation            11,998        637      7,584        -          -                    -          -      20,219
SA&T -
selection,
acquisitions
and permits                    -     12,995     15,500        -          -          -         -          -      28,495
Salaries and
wages                    246,689    329,225     69,341   77,570     59,472          -    38,203     39,642     860,142
Subsistence               12,829     40,077     13,672    3,095      5,752          -     3,252      7,582      86,259
Transportation,
including vehicles        92,101    124,763     61,261    8,825     20,264          -     6,876     27,244     341,334
Recovery relating 
to sale of
mineral property 
on consolidation
of Stellar (Note 3)            -          -          -        -          -          -         - (1,084,825)  (1,084,825)

------------------    ---------- ---------- ----------  -------- --------- ----------  --------  ---------  -----------
Net expenditures
during the year        1,251,174    988,708  1,252,883   150,069   735,379  2,184,233   291,897   (327,687)   6,526,656
Balance,
beginning of
year                  11,373,310  2,676,519    477,143   238,672   293,063  3,048,075    31,743  5,252,869   23,391,394
------------------    ---------- ---------- ----------  -------- --------- ----------  --------  ---------  -----------
Balance, end
of year               12,624,484  3,665,227  1,730,026   388,741 1,028,442  5,232,308   323,640  4,925,182   29,918,050
------------------    ---------- ---------- ----------  -------- --------- ----------  --------  ---------  -----------



                                                                                                           January 31,
                             Bea        MCA       Putu      AAR     Bouro Kono/Nimini      REPL      Other        2007
------------------    ---------- ---------- ----------  -------- --------- ----------  --------  --------- -----------
                               $          $          $        $          $          $                    $           $
African Aura
Resources JV                   -          -          -   25,000          -          -         -          -      25,000
Assays and
geochemical              202,216     31,591        943   47,954        387          -         -          -     283,091
Communications            21,903     12,051      1,625       79        312          -         -        146      36,116
Community
relations                 35,373      3,522      1,189      140          -          -         -          -      40,224
Consultants               74,894     25,376    139,348        -     72,428          -         -          -     312,046
Data, images,
reports and
maps                      26,636         95        300      175          -          -         -          -      27,206
Drilling               1,049,173     87,451     12,481        -          -          -         -          -   1,149,105
Feasibility            1,167,598          -          -        -          -          -         -          -   1,167,598
General
operating
costs                    662,251    140,406     58,431   29,918     22,720      6,684         -      15,466    935,876
Geologists'
support                   64,387     30,997      9,506    3,925          -          -         -          -     108,815
Infrastructure             5,755      3,216     39,160        -          -          -         -          -      48,131
Licenses and
permit fees               19,768    136,000     46,506        -          -          -         -      5,146     207,420
Metallurgy               379,253          -          -        -          -          -         -     22,780     402,033
Petra Joint
Venture
exploration
expenditures                   -          -          -        -          -  2,174,627         -          -   2,174,627
Project/field
office costs,
other                     75,002     53,571      4,419    2,789        781          -         -      4,076     140,638
Reconnaissance
and
geochemical              246,018     87,715      6,065    4,110          -          -         -     28,054     371,962
Recovered
expenses                 (81,217)   (31,248)         -        -          -          -         -          -    (112,465)
Salaries and
wages                    342,356    240,630     18,403   51,208     14,254          -         -     10,089     676,940
Subsistence               34,458     17,882     11,687    1,794      2,051          -         -        610      68,482
Transportation,
including vehicles       167,333    114,643     46,910   36,166      7,262          -         -      8,642     380,956
------------------    ---------- ---------- ----------  -------- --------- ----------  --------  ---------  -----------
Net expenditures
during the year        4,493,157    953,898    396,973  203,258    120,195  2,181,311         -     95,009    8,443,801
Balance,
beginning of
year                   6,880,153  1,722,621     80,170   35,414    172,868    866,764    31,743  5,157,860   14,947,593
------------------    ---------- ---------- ----------  -------- --------- ----------  --------  ---------  -----------
Balance, end
of year               11,373,310  2,676,519    477,143  238,672    293,063  3,048,075    31,743  5,252,869   23,391,394
------------------    ---------- ---------- ----------  -------- --------- ----------  --------  ---------  -----------

Management's Discussion and Analysis

For the eleven months ended December 31, 2007

The following discussion is management's assessment and analysis of the results
and financial condition of Mano River Resources Inc. (the 'Company' or 'Mano')
and should be read in conjunction with the accompanying audited consolidated
financial statements for the eleven months ended December 3 1st, 2007 and
related notes. Unless otherwise indicated all amounts are in US dollars. The
date of this management's discussion and analysis is April 29, 2008.

Additional information relating to the Company is available on SEDAR at
www.sedar.com or on the Company's website at www.manoriver.com.

OVERVIEW PERFORMANCE
Description of Business

Mano River Resources Inc. is an exploration and development company engaged in
the acquisition, exploration and development of gold, diamond and iron ore
properties in Africa. The Company, through its subsidiaries, holds interests in
mineral properties located in Liberia, Sierra Leone, Guinea and the Democratic
Republic of Congo (DRC), with the aim of developing them to a stage where they
can be exploited economically or arranging joint ventures whereby other
companies provide the funding and expertise for development and exploitation.

Forward-looking statements

Certain information included in this discussion may constitute forward-looking
statements. Forward-looking statements are based on current expectations and
entail various risks and uncertainties. These risks and uncertainties could
cause or contribute to actual results that are materially different from those
expressed or implied.

Trends

Prior to 2004, the mineral exploration industry went through a very difficult
period as a result of low prices for both precious and base metals. Lack of
investor interest in the sector in general led to low market capitalizations and
large companies found it was easier to grow by purchasing companies or mines
outright, rather than to grow organically. This led to downsizing of the
exploration staff of large companies and many professionals took early
retirement, or left the industry to pursue other careers. As a result of these
trends, there are currently fewer and fewer good projects in the pipeline and a
developing shortage of experienced explorers. With recently improved metal
prices which are linked to burgeoning demand, especially from Asia, supply
difficulties may occur in the near future and there is a discernible need for
good exploration projects for almost all commodities, based on sound geological
work. The general consensus is one of solid demand, which bodes well for the
outlook. As junior exploration companies (many of which are staffed by
geologists who were formerly employed by large companies) find it easier to
raise funds, they are tending to lead the way in identifying properties of merit
to explore.

Risks and Uncertainties

The Company is subject to a number of risk factors due to the fundamental nature
of the mining business in which it is engaged, the countries in which it
primarily operates and not least adverse movements in commodity prices. The
Company's near term production prospects under Stellar Diamonds is an important
milestone as the company becomes a producer. Mano seeks to counter such risks as
far as possible by selecting exploration areas on the basis of their recognized
geological potential to host high grade gold, diamond andiron ore deposits. The
area of under-explored Archaean terrain on which the Company focuses in West
Africa is also subject to a second significant risk, namely, political. While
the region has suffered serious civil unrest and armed conflict in the past
(which is the basic reason why it remained under-explored), conditions have
improved markedly in recent years.

Industry

The Company is engaged in the exploration of mineral properties, an inherently
risky business, and there is no assurance that an economic mineral deposit will
ever be discovered and subsequently put into production. Most exploration
projects do not result in the discovery of commercially mineable ore deposits.
The geological focus of the Company is on areas in which the geological setting
is (well understood by management given the Company's ten year tenure in the
region and the technological tools it employs are regularly updated to better
focus exploration efforts.

Reserve and resource estimates

The estimation of mineral resources and reserves is in part an interpretive
process and the accuracy of any such estimates is a function of the quality of
available data, and of engineering and geological interpretation and judgement.
No assurances can be given that the volume and grade of reserves recovered, and
rates of production achieved, will not be less than anticipated.

Gold and metal prices

The price of gold is affected by numerous factors totally beyond the control of
the Company, including central bank sales, producer hedging activities, the
exchange rate of the U.S. dollar relative to other major currencies, demand,
political and economic conditions and production levels. In addition, the price
of gold has been volatile over short periods of time due to speculative
activities. The prices of diamonds, and other mineral products that the Company
may explore for, also have the same or similar price risk factors.

Cash flows and additional funding requirements

Mano currently has no revenues from operations. To the extent the Company's
exploration programs are successful and joint venture partners complete their
earn-in, the Company is required to provide its share of on-going exploration
and development costs in order to maintain its interest in the projects, or have
its interest diluted and reduced to a royalty interest. Substantial additional
capital is required to put a property into commercial production. The sources of
funds currently available to the Company for its exploration stage projects are
either: the sale of equity capital; the offering of an interest in its projects
to another party; and debt financing when appropriate. Although Mano has been
successful in the past in obtaining financing, there is no assurance that it
will be able to obtain adequate financing in the future or that such financing
will be on terms advantageous to the Company.

Exchange rate fluctuations

Fluctuations in currency exchange rates can significantly impact cash flows. The
U.S. dollar exchange rate in particular has varied substantially over time.
While the Company has historically raised a large proportion of its equity
financing in UK currency most of the Company's exploration expenses, meanwhile,
are denominated in U.S. dollars. Fluctuations in exchange rates may give rise to
foreign currency exposure, either favourable or unfavourable, which may impact
financial results. Mano does not engage in currency hedging to offset the risk
of exchange rate fluctuation.

Environmental

Mano's exploration and development activities are subject to extensive laws and
regulations governing environmental protection. The Company is also subject to
various reclamation-related requirements. The Company takes extremely seriously
its commitment towards the local communities and the environment. Its unwritten
policy is to be proactive when operating in order to exceed all applicable
environmental regulations. A failure to comply may result in enforcement actions
causing operations to cease or be curtailed, and may include corrective measures
requiring significant capital expenditures.

Laws and regulations

Mano's exploration activities are subject to local laws and regulations
governing prospecting, development, production, exports, taxes, labour
standards, occupational health and safety, mine safety and other matters. Such
laws and regulations are subject to change and can become more stringent, and

compliance can therefore become more costly. The Company applies the expertise
of its management, its advisors, its employees and contractors to ensure
compliance with current laws.

Title to mineral properties

While the Company has undertaken all the customary due diligence in the
verification of title to its mineral properties, this should not be construed as
a guarantee of title. The properties may be subject to prior unregistered
agreements or transfers and title may be affected by undetected defects.

Competition

There is constant competition from other mineral exploration companies, with
operations similar to those of the Company. Many of the mining companies with
which the Company competes have operations and financial resources substantially
greater than those of Mano.

Dependence on management

Mano relies heavily on the business and technical expertise of its management
team and there is little possibility that this dependence will decrease in the
near term. In Q4 2007 changes were made to the management and the composition of
the Board which make the Company stronger and better able to exploit the value
of it exploration assets. Mano has no key-man insurance although Directors and
Officers Liability insurance was taken out during the period.

OPERATIONS - Overview

The Company has undergone some significant changes during the year with the
intention of providing a sustainable future. Mano's fundamental strategy is to
unlock the value of its exploration assets. The Company is focused on the
development of its three divisions, namely gold, diamonds and iron ore.

At the beginning of the year, the Board decided that in order to unlock this
value in the Company, it would be advantageous to place all the diamond assets
into a new company named Stellar Diamonds Limited and list this subsidiary on
the London Stock Exchange's Alternative Investment Market (AIM). This process
has been ongoing. The present timing for the IPO is at the end of Q2 2008 but
always subject to market conditions.)

The key asset in the Gold division is New Liberty Gold project (NLGM) in Liberia
where we are currently drilling in order to expand the resource. In January 2007
Mano announced the results of a Feasibility Study on an open pit operation at
New Liberty Gold project. The estimated gold resource at NLGM is 1.4 million
ounces of measured and indicated resource grading 3.18 g/t.

The feasibility study was submitted to various financial institutions with
regard to debt financing however the new management believes it be more
advantageous and strategically more value creative to increase mine life and
changing the production profile by considering an underground scenario from the
outset. The original strategy was to mine the deposit using open pit methods and
to examine its underground potential after start-up. This strategy had not taken
into account the potential understatement of the ore resource due to the
contiguous nature of the orebody to depth. With the gold price at its current
levels gold assets such as NLGM are potentially very exciting.

On the Iron ore front, as previously stated, the Company is currently targeting
a resource of 900 million tonnes at its Putu Project. With demand for iron ore,
driven primarily by the Chinese market, the impact on prices has been
significant..

--------------------------------------------------------------------------------
Exploration Projects - Current Developments GOLD

Although no drilling took place at NLGM during the quarter to December 2007
there was significant preparation work in the form of ascertaining the drill
programme, preparing the ground and drill pads as well as mobilising the new
drill rig onto site. All this to identify the targets for the drilling programme
which started in January 2008. A detailed description of the drilling programme
at NLGM is under subsequent events.

Exploration on the Mineral Development Agreement (MDA) licence area in Liberia
has in recent times been focused on the New Liberty project. During Q4 the
Company commissioned The Mineral Corporation consultancy of South Africa to
examine and provide opinions and targets on the overall license area; this work
will be available early in 2008. We are confident that other gold targets will
be identified given the amount of artisinal workings on the licence.

In Sierra Leone, Mano's gold programme is being undertaken by Golden Star
Resources ('GSR') of Canada as Operator, under a joint venture agreement.
Focusing currently on the Sonfon district at the northern end of the Sula
Mountains Archaean greenstone belt, GSR are currently engaged in drill testing a
number of high priority regional soil geochem gold anomalies, with results
expected to be announced in the coming months.

Mano's joint venture partner over the Missamana-Gueliban licences in eastern
Guinea, Navasota, decided to withdraw in the latter part of 2007. Navasota
reported encouraging results from the drilling they carried out under the joint
venture, including 1.73 g/t gold over 24m, 6.20 g/t gold over 8m, and 43.97 g/t
gold over 4m. Discussions are at an advanced stage with a potential partner to
take this forward.

                                    IRON ORE

The Putu Iron Ore project is located in the centre of a 425km2 licence in Grand
Gedeh County of eastern Liberia, approximately 100km west from a potential
deep-water port of Greenville and 200km south east of the Mt. Nimba iron ore
deposit. The project consists of two prominent ridges that strike northeast
southwest, namely, Mt Jideh (with its extension Mt Montroh) and Mt Ghi.
Exploration to date has focussed on Mt Jideh, which comprises a potentially
high-grade outcropping magnetite/haematite mineralised zone that has undergone
various stages of weathering. Mt Jideh has a strike length of approximately 12km
based on mapping, surface sampling and airborne magnetic data. There are three
additional iron ore exploration targets at the Putu project that have yet to be
explored.

On October 3rd 2007, Mano, reported the positive conclusions of an independent
technical report on the Putu Range Iron Ore Project ('Putu') in eastern Liberia
in which Mano holds an 80% interest through its African Iron Ore Group ('AIOG')
subsidiary.

Mano's directors have completed a review of the recent SRK Consulting (UK) Ltd
('SRK') report, which was commissioned during the year. The Company is satisfied
with the exploration to date and will progress the project, focusing on the
following:

   • AIOG is targeting a potential resource of 900Mt which SRK considers a
     reasonable objective
   • Initial drilling programme to commence
   • 4,000m drilling programme planned
   • Historic exploration adit now known to be 218m long being rehabilitated
   • Trench, grab and adit samples to date have averaged in excess of 50%
     iron
   • Initial scoping study planned on shipments via local deep water port

For the 2008 Exploration Programme, Mano is planning a 4,000m resource and grade
delineation drilling programme, focussed on the eastern zone of Mt Jideh. In
addition, a series of widely spaced drill holes will be completed along the
strike of the Mt Jideh magnetic anomaly. The objective of the drilling programme
will be to prepare an initial resource estimate in accordance with NI 43-101. In
conjunction with the drilling programmes, bulk sampling and test work will be
undertaken in order to evaluate grades, recovery and ore characteristics.

Conclusions of Independent Technical Report

SRK reported that the Company's exploration results to date are in line with
available historic data which shows a surface weathered zone and transitional
ore overlying a Primary magnetite itabarite that contains zones of hematite
itabarite. SRK considered that there is a notable resource upside potential when
considering the extent of the magnetic anomaly over a 12km strike length. Mano
is currently targeting a potential resource of 900 Mt. SRK consider this to be a
reasonable objective. SRK notes Mano's target will only be verified by further
reconnaissance and drilling. The exploration of Mt Jideh is, however, in its
infancy and without the benefit of drilling (undertaken using modern techniques)
the true nature of the ore types and associated grades that are realistic, are
considered by SRK to be speculative at present.

Mano's target for the resource is in excess of an historic estimate of 455Mt @
45% iron (not in accordance with NI 43-101). It is notable that the historic
estimates also excluded the potential for significant tonnage from the higher
grade, lower cost and non-magnetic hematitic ore found at surface. SRK noted
that the historic estimates were not focussed on the entire 12km potential
strike length of Mt Jideh.

                                    DIAMONDS

On December 1st 2007, Stellar Diamonds Limited ('Stellar') signed a memorandum
of understanding ('MoU') with BHP Billiton over exploration licences covering
10,852km2 in the north of the Democratic Republic of Congo ('DRC').

   • MoU signed with BHP Billiton in the northern DRC, one of the least
     explored cratons in Africa
   • Licences cover 10,852km2, which Stellar believes is a prospective target
     area
   • Exploration to be co-funded after completion of a 500-tonne bulk sample
     by Stellar
   • Expected to commence Q2 2008
   • Targeting kimberlites in areas of active artisanal diamond mining

The Licences are subject to an existing Option Agreement between BHP Billiton
and Socerdemi SPRL, a Congolese registered company which holds the Licences. The
MoU entitles Stellar to earn 50% of the BHP Billiton entitlement in the project.

Under the Option Agreement, BHP Billiton has the right to either enter into a JV
with Socerdemi and earn a 85% participating interest through funding exploration
to completion of a feasibility study, or elect to purchase from Socerdemi 100%
of the Licences at any time during the five year option period by paying to
Socerdemi US$100,000. Socerdemi would then retain a 2% net profits royalty in
any future diamond sales, which can equally be bought out by BHP Billiton for
US$500,000.

The Socerdemi licences are located in close proximity to other licences covering
1,308km2 over which Stellar recently secured a MoU with Remec SPRL. The
proximity of the two areas offers logistical benefits and synergies and helps to
secure Stellar's presence in the north of the DRC .

On October 10th 2007, Mano reported encouraging initial diamond recoveries from
the Tongo kimberlite project in eastern Sierra Leone. The Tongo project is a
Joint Venture between Mano's 68.5% owned subsidiary company, Stellar Diamonds
Limited ('Stellar') and BHP Billiton. BHP Billiton can earn up to a 51% interest
in the Tongo project under the current spending plan of $3.4million, with a
further option to earn up to 70%.

Highlights of the initial recoveries were:

   • 1,894 diamonds, totalling 2.05 carats, recovered from six 200 kg (dry
     weight) samples, including:
   • 49 diamonds over 0.85mm recovered, totalling 1.43 carats
   • 72 diamonds, totalling 2.85 carats, recovered from 23 surface grab
     samples
   • Macrodiamond grade forecasts by an independent diamond expert suggests
     grades of up to 500 carats per hundred tons for some of the kimberlites

CORPORATE

On December 21 2007, it was reported that the following Director's would be
retiring as part of the Company's previously announced management restructuring:

P. Anthony Rhatigan - Vice-Chairman N. Karl Smithson - Director

Roderick ('Rod') C. McKeen - Director Steven J. Poulton - Independent Director

Commenting on the retiring Directors, David Evans, Chairman said: 'We would like
to express our great appreciation for the valuable contributions made by our
retiring Directors and wish them all the best for their future endeavours.'

On October 1st, 2007, it was reported that David Evans Chairman of the Company,
purchased 100,000 shares at 8.75 pence in the Company.

On October 18th, 2007, it was reported that David Evans, Chairman of the
Company, purchased 150,000 shares at 10.4 pence in the Company. His holding of
common shares in the Company then totalled 1,000,000 shares or approximately
0.34% of the Company's issued share capital.

Exploration Projects - Subsequent Events

Gold

On January 22 2008, the Company reported it was starting a new drilling
programme. This programme which included 2,688m of resource/reserve delineation
diamond drilling was completed in March 2008 and we are currently awaiting the
results. This programme included a number of deeper holes down to depths of
500-600 meters. The results of this programme will give a clear indication of
the continuity of the deposit at depth, and potentially change the project scope
to an underground mining operation with a resultant increase in the resource.

--------------------------------------------------------------------------------
DIAMONDS

On February 20th 2008, the Company reported that its joint venture partner Petra
issued its interim results and has made the following statement regarding the
Kono Joint Venture:

'Trial mining operations at the Kono project, a joint venture with Stellar
Diamonds, continue with highly encouraging results at the Pol K and Bardu test
shafts. A total of 8,640 diamonds (760 carats) have now been recovered at Kono
(bottom cut 1 mm). A parcel of 581 carats has been shipped to South Africa and
these are being cleaned, awaiting valuation.'

In March 2008 BHP Billiton withdrew from the Sierra Leone joint venture leaving
Stellar with 100% control. BHP Billiton spent over $3.3M on exploration on this
JV but due to its nature and scale chose to exit. This means BHP Billiton
retains no equity or royalties in any of the projects and Stellar is at liberty
to continue and if it so wishes find a new JV partner.

Corporate - Subsequent Events

On March 31st 2008, the Company reported that its majority owned subsidiary
Stellar Diamonds Ltd had completed a pre-IPO placing of 2,375,000 new ordinary
shares of 1 pence each in Stellar at 100 pence per share, raising gross proceeds
of £2.375 million. In addition, it is announced that Guy Pas and Philippe Giaro
have resigned from the Board of Stellar and that Denis Alexandrov will be
appointed to the Stellar Board as non-executive director, effective as of 1st
April 2008.

On February 14th 2008, it was reported that Bevan Metcalf was appointed Chief
Financial Officer.

On January 29th 2008, the Company reported that, pursuant to its Stock Option
Plan and subject to regulatory approval, it has granted incentive stock options
to certain directors, employees and consultants of the Company. The stock
options were granted over a total of 9,045,000 common shares representing
approximately 3.04% of the issued share capital of the Company at an exercise
price of Cdn$0.20 per share, exercisable for a period of five years. The stock
options are exercisable immediately.

The allocation of stock options to directors was as follows: David Evans
2,000,000, Luis da Silva 600,000, Tom Elder 1,000,000, Guy Pas 750,000 and
Malcolm Burne 1,000,000.

On January 21st 2008, the Company reported the appointment of Lord Peter
Daresbury as Non-executive Chairman of its majority owned subsidiary Stellar
Diamonds Ltd in preparation for an IPO.

SELECTED FINANCIAL INFORMATION
The following selected annual financial information is derived from the audited
consolidated financial statements for the three most recently completed
financial years and is prepared in accordance with Canadian generally accepted
accounting principles ('GAAP').

Years ended:
                                        December 31    January 31    January 31
                                             2007          2007          2006
Total revenue (Interest income)           148,041        53,181       117,927
Net income (loss)                       4,017,642      (959,609)   (1,348,265)
Basic and diluted income (loss) per         0.014        (0.004)       (0.006)
share
Stock option compensation expense         190,003       513,361       397,829
Working capital                          *2,868,877     428,368     3,015,165
Total assets                           45,501,911    28,866,715    22,287,420
Total exploration expenditures*         6,526,656     8,443,801     4,291,377


* After deducting negative goodwill

SUMMARY OF SELECTED QUARTERLY INFORMATION

The following is the selected financial information of the Company for the last
eight quarters: (unaudited)

                          December 31   October 31         July 31      April 30
                                2007          2007          2007          2007
Total revenue (Interest
income)                       79,784        47,500        12,985         7,772
Net income (loss)          5,257,878      (489,597)     (473,206)     (277,433)
Basic and diluted income
(loss) per share               0.018        (0.001)       (0.001)       (0.001)
Total assets              45,501,911    46,105,356    46,672,577    29,813,909
                            January 31    October 31       July 31      April 30
                                2007          2006          2006          2006
Total revenue (Interest
income)                       14,496        13,322         7,229        18,134
Net (loss)                  (139,287)     (486,319)     (199,679)     (134,324)
Basic and diluted (loss)
per share                     (0.001)       (0.001)       (0.001)       (0.001)
Total assets              28,866,715    27,404,088    27,545,680    22,093,071

RESULTS OF OPERATIONS
---------------------------------------------------------------------------------------------------------------

Fourth Quarter 2007

As detailed below the Company changed its year end from 31 January to 31
December. This has resulted in the fourth quarter figures representing two
months activity as opposed to three month last year. During the fourth quarter
ended December 31, 2007, the Company realized net income of $5,257,878 or $0.018
per share as compared to a loss of $489,597 or $0.001 per share in the previous
quarter. The income for the quarter is due to a 'dilution gain' recognised in
the quarter amounting to $6,207,005 arising from the transfer of the Company's
diamond properties to Stellar Diamonds Ltd. This transaction occurred at net
book value which was the most reliable valuation at the time. Subsequent to this
transaction shares were issued at a higher value than the transfer from the
Company, therefore giving rise to a 'dilutive gain'. Expenses in the quarter at
$1,339,086 are $817,679 higher than the last quarter. This is due to four main
items, namely, the unrealized exchange loss on the convertible debt ($168,130),
the depreciation charge related to the assets acquired during the fourth quarter
of $353,315, the foreign exchange loss of $221,219, the increase in professional
fees of $47,109 and higher administrative expenses of $55,451. Income from
interest during the quarter was $79,784 as compared to $47,500 in the previous
quarter.

Financial Results of December 31, 2007 compared to January 31, 2007

On the 9 August 2007 the Company reported that it was changing its fiscal year
end date to 31 December from the 31 January in accordance with the requirements
of Section 4.8(2) of National Instrument 51-102. This has meant that the period
under review is eleven months rather than the normal twelve months. During the
eleven months ended December 31, 2007, ('2007') the Company had net income of
$4,017,642 giving a basic gain per share $0.014 as compared to a net loss of
$959,609 or $0.004 for the year ended January 31, 2007 ('2006'). This increase
in net income of $4,977,251 compared to January 31, 2007, comprised some of the
following significant expenses and income:

   • Stock-based compensation fell from $513,361 for the year ended January
    31, 2007 to $190,003 for the 11 months ended December 31, 2007. The
    significant decrease is due to a reduction in the level of stock options
    granted falling from 2,980,000 in January 31, 2007 to 900,000 for the period
    ended December 31, 2007.
   • Administrative and office expenses were $63,236 in for the eleven months
    ended December 31, 2007 compared to $8,747 for the year ended January 31,
    2007. The increase of $54,489 is due to director's insurance premium.
   • Professional fees of $958,629 (January 31, 2007 - $408,080), including
    nominated brokers and advisors increased by $550,549 due to the increase in
    regulatory requirements, internal reorganization, costs associated with the
    proposed listing of Stellar Diamonds Ltd on AIM and an increase in corporate
    development activities and equity financing.
   • Interest on convertible debenture of $181,296 in the eleven months ended
    December 31, 2007 compared to Nil in the year ended January 31, 2006. The
    Company entered into convertible note subscription agreements to raise 2.3
    million pounds sterling ($4,641,860) with certain lenders. The convertible
    notes, are repayable on August 1, 2010 and bear interest at 9% per annum.
    The principal amount is convertible by the holders into common shares of the
    Company at a conversion price of £0.14 per share at any time prior to
    maturity or alternatively, at the option of the Company after a period of
    two years, if the common shares of the Company have traded at an average 30%
    premium to the conversion price over the previous 21 trading days.
  • Transfer agent and regulatory fees of $99,560 in 2007 (January 31, 2007 -
    $67,979) increase of $31,581 was due to increase in filings with the 
    regulatory authority. These costs include those related to the granting of 
    stock options.
  • Directors fees increased to $122,789 for the eleven months ended
    December 31, 2007 compared to $35,800 for the year ended January 31, 2007.
    This increase of $86,989 was due to increase in board meetings and the
    number of board members during period. The Company appointed a new board for
    the majority owned subsidiary Stellar Diamonds Ltd in preparation of being
    listed on AIM.
  • Management fees of $283,753 (January 31, 2007 - $105,500) increased by
    $178,253 due to the Company recruiting new management team members during
    2007.
  • The Company reported a net foreign exchange loss of $226,868 for the
    eleven months ended December 31, 2007, compared to net foreign exchange gain
    for the year ended January 31, 2007 of $126,677. In addition a further
    unrealized loss arose of $168,130 on the convertible debt which is repayable
    in sterling pounds. Since some of the current assets are held in UK sterling
    pounds they must be converted into US dollars on consolidation at the year
    end exchange rate. This can create either an exchange gain or loss depending
    on the strengthening or weakening of the US dollar.
  • The Company has no revenue from mining operations. Revenue for the
    period consisting of interest earned from cash deposits was $148,041 as
    compared to $53,181 for the year ended January 31, 2006, an increase of
    $94,860. This increase in interest income is due to increase in cash
    balances and placement of cash on term deposits during the period.

LIQUIDITY AND CAPITAL RESERVES

---------------------------------------------------------------------------------------------------------------------

The Company had working capital of $2,868,877 at 31 December 2007 as compared to
working capital of $428,368 at the year ended January 31, 2007. The Company had
cash of $4,100,187 (January 31, 2007 -  $1,185,520) which contributed to the 
higher working capital.

During the year equity financings were as follows:

   • 690,000 stock options were exercised at a price of CDN$0.10 and
    4,000,000 stock options were exercised at a price of CDN$0.11 and 1,000,000
    expired unexercised for the total proceeds of $437,836.
   • Mano's subsidiary, Stellar Diamonds Ltd completed the Private Placements
    in order to raise funds to finance the development of its diamond interests.
    The Private Placements took place in two tranches. In the first tranche
    1,211,890 shares were issued at an effective price of £0.87 per share.
    918,484 of those shares were issued for cash consideration, raising proceeds
    of £800,000, while the remaining 293,406 shares were issued to the
    subscribers in consideration for forfeiture of certain benefits as a result
    of the reorganization. In the second tranche 4,822,044 shares were issued at
    a price of £0.871 per share for proceeds of £4,200,000. In addition, the
    Company issued 2,411,024 warrants with two year term and exercise price of
    120 pence per share on a 1 for each 2 placing shares basis as well as
    260,390 adviser's options with a two year term and exercise price of 87.1
    pence per share. The purpose of raising funds by issuing shares in the
    capital of Stellar Diamonds instead of shares in the capital of the Company 
    was to allow the development of the Diamond Interests to be financed without 
    diluting the interest of the Company's shareholders in the non-diamond 
    related assets of the Company.
  • The Company entered into a convertible debenture agreement to raise
    2.3 million pounds sterling with the lenders. The convertible notes 
    totalling 2.3 million pounds sterling will under this debenture, be 
    repayable on August 1st, 2010 together with accumulated interest at 9% per 
    annum. The principal amount is convertible by the holders into common shares 
    of the Company at a conversion price of £0.14p per share at any time prior 
    to maturity or alternatively at the option of the Company after a period of 
    two years, if the common shares of the Company have traded at an average 30% 
    premium to the conversion price over the previous 21 trading days.

As at April 29, 2008, the following stock options were outstanding:
    --------------------------        --------------                  ----------
            Number of                 Exercise price                 Expiry date
          Common Shares                  Per share
                                          (Cdn$)
        --------------------------    --------------                  ----------
                         905,000 $                0.10           August 14, 2008
                       2,720,000 $                0.24            March 23, 2009
                       2,620,000 $               0.215             July 25, 2010
                       2,980,000 $                0.23             July 31, 2011
                         600,000 $                0.23            March 16, 2012
                         300,000 $                0.23              May 31, 2012
                       9,045,000 $                0.20              Jan 23, 2013
        --------------------------        --------------              ----------
                      18,945,000
        --------------------------        --------------              ----------


Cash used for operating activities during the eleven months ended December 31,
2007 was $1,332,719 (January 31, 2007 - $61,031) after adjusting for the
non-cash activities. Cash flows from financing activities for the eleven months
ended December 31, 2007 were $14,214,302 compared to $6,331,917 for the year
ended January 31, 2007, as the Company completed a private placement,
convertible note and exercise of stock options. Investing activities for the
eleven months ended December 31, 2007 was $9,966,916 (January 31, 2007-
$7,866,626)

As at December 31, 2007, the Company had total assets of $45,501,911 as compared
with $28,866,715 at January 31, 2007. Resource properties amounted to $8,888,592
(January 31, 2007 - $3,955,000) and deferred exploration costs to $29,918,050
(January 31, 2007 - $23,391,394) at the year end. At December 31, 2007, the
Company had total current liabilities of $1,640,182 (January 31, 2007 -
$907,863) including $174,367 (January 31, 2007 - $133,707) due to related
parties for reimbursable expenses, director and board committee fees and
management fees and $980,473 due to joint venture partners (January 31, 2007 -
$577,175).

During the eleven months ended December 31, 2007 the Company incurred $6,526,656
of deferred exploration expenditure on its mineral properties as compared to
$7,866,626 during the year ended January 31, 2007. The Company purchased capital
assets of $2,355,435 (January 31, 2007 - Nil) for an advanced diamond
exploration program.

OTHER INFORMATION
---------------------------------------------------------------------------------------------------------------

Outstanding share data

The Company is authorized to issue an unlimited number of common shares without
par value. As at April 29, 2008 there were 297,810,818 common shares
outstanding.

Off balance sheet arrangements

The Company does not have any off-balance sheet arrangements and does not
contemplate having them in the foreseeable future.

Related party transactions

During the eleven months ended December 31, 2007, the Company incurred billings
of $403,542 (January 31, 2007 - $239,996) from related parties for management
fees, directors fees and professional services. All transactions with related
parties have occurred in the normal course of operations. As at December 31,
2007, the amount due to related parties totals $174,367. These balances have no
fixed terms of repayment and have arisen from the accrued provision of services
referred to above and reimbursable expenses.

Disclosure controls and procedures

Management is responsible for establishing and maintaining a system of controls
and procedures over the public disclosure of financial and non-financial
information regarding the Company. Management is also responsible for the design
and maintenance of effective internal control over financial reporting to
provide reasonable assurance regarding the integrity and reliability of the
Company's financial information and the preparation of its financial statements
in accordance with the Canadian generally accepted accounting principles.
Management maintains appropriate information systems, procedures and controls to
ensure integrity of the financial statements and maintains appropriate
information systems, procedures and controls to ensure that information used
internally and disclosed externally is complete and reliable.

Management of the Company, including our Chief Executive Officer and Chief
Financial Officer, do not expect that our disclosure controls and procedures of
our internal controls will prevent all errors and all fraud. A control system,
no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within Mano River have been detected.

However, given the nature of the business and geographical displacement, the
management is committed to continuously mitigate any risks and systematically
improve operating controls where and when possible in the cost effective manner.

As at December 31, 2007, management recognized the limitation of segregation of
duties due to the size of the organization. The management is mitigating such
risks by introducing compensatory controls to detect and remediate control
deficiencies.

OUTLOOK
------------------------------------------------------------------------------------------------------------------------

The planned listing of Stellar at the end of Q2 2008 would be a defining event
for the Company and create transparency as to Mano's valuation. The delay in the
listing has been bought about by the downturn in the financial markets. The
Group will still retain a significant stake in Stellar post listing.

In the gold division, the Company reviewed its approach to NLGM and the current
drill programme will will confirm the potential for increasing the resource.
When confirmed, the objectives will be to upgrade the current 1.4M oz resource
to Measured category and define a new substantial resource in the Indicated
category. Following this, a new feasibility study will be prepared with the
objective of taking NLGM to a production decision. The Board now has the skills
to take projects like NLGM into production with a Chairman that has proven
experience in successfully bringing developments to fruition and a mining
engineer as CEO.

On the Putu iron ore project, the Company made the decision in Q3 to purchase
its own rig from Canada to assist the drilling contractors. A 4,000m drilling
programme has started and initial results will be available towards the middle
of 2008. The renewal of the licence is scheduled for May 2008 and it is the
intention of the Company to apply for a 25 year Mineral Development Agreement.
The Company is targeting a resource of 900Mt at Putu.

The Board is considering all options for taking the Company forward including
Corporate deals. The Company will need to raise further funding in order to
progress its value creation strategy and implement its operational objectives at
Putu and NLGM.

On Behalf of the Board,

MANO RIVER RESOURCES INC.

LUIS G. CABRITA da SILVA (signed)

LUIS G. CABRITA da SILVA President



                      This information is provided by RNS
            The company news service from the London Stock Exchange
                                                                                                 

a d v e r t i s e m e n t