16th May 2011 Mkuju uranium project in Namtumbo District, Ruvuma Region has been confirmed as technically and economically viable, according to the latest studies by Mantra Resources company. This comes at the projects completion of the Phase 1 Definitive Feasibility Study (DFS) for the Companys Nyota Prospect which is part of Mkuju River Uranium Project. A statement issued over the weekend in Perth, Australia by Mantra CEO Peter Breese said the new progress demonstrates that Mkuju will be a low cost, near term uranium producer. He said that Phase 1of the study is based on the Mineral Resource Estimate (MRE), announced in November 2010, which included total measured and indicated resources of 67.7 million tonnes. This averages 439 parts per million (ppm) for 65.5 million contained pounds of uranium oxide, he said. The CEO said that the additional 41.2 million tonnes averaging 395 ppm for 35.9 million pounds of uranium oxide classified into the inferred resource category were excluded from the study. The resource base for Phase 1 supports an annual production of 4.2 million pounds of uranium oxide during the 10 years of steady state operations, based on an average annual throughput of 5.2 million tonnes of ore, Breese said. The CEO added that there was a potential to increase it further through the upgrading of the existing Inferred Resources and ongoing exploration work. The average strip ratio over the life of mine is 1:3.6 (ore to waste). The DFS is based on an owner operator mining scenario and the processing plant is based on simple acid leach and conventional Resin-In-Pulp (RIP) technology. The operating costs for Phase 1 of the Project average USD22.04 per pound during steady state operations, a decrease of 12 per cent from the Pre-Feasibility Study (PFS) results. He said that this significant improvement is predominantly the result of an improved understanding of the metallurgical process and process flow sheet changes that have increased metal recoveries, adding that higher volume annual throughputs and metal production have also contributed to lower operating costs. The capital costs (determined to a nominal accuracy of +/- 10%) for Phase 1 of the project are estimated at USD390.5 million; USD163.1 million for the process plant and USD227.4 million for project infrastructure and management. In addition, he said, the mining fleet and ancillary capital is estimated at USD39.6 million. The increase in capital costs from the PFS is as a result of a larger process plant to handle the higher annual production volumes and the requirement to line the tailing storage facility with a high density polyethylene liner, he said. Breese said that based on the detailed Implementation plan, the project can be ready for hot commissioning within 21 months from the commencement of detailed engineering. The completion of the Phase 1 DFS is a significant milestone for the company. The positive results clearly demonstrate that the current resource base at Nyota can support a large scale, low cost, long life uranium mining operation, he said, adding: We also believe that there is potential to increase the production rate and mine life by upgrading the existing Inferred Resources; the treatment of lower grade mined ore through the Phase 2 expansion; and continued exploration to unlock the prospect of the broader MRP.