Finally, I managed to resolve it. For benefit of others. Here's what you need to do:
1. Upload the extentions to relevant directory (/ext)
2. ACP >> Customize >> Simple Mentions >> Enable
3. ACP >> Permissions >> Global Permissions >> Group Permissions >> Registered Users >> User Permissions >> Roles >> Mics >> Can use the mention System = Yes
3. ACP >> Permissions >> Permission Roles >> User Roles >> Standard Features >> Edit >> User permissions >> Mics >> Can use the mention System = Yes
@Paul: It would be great if you can add the above instructions on the mod installation instructions so that no one has to scourge through various threads here and there to find it out. With various mention of roles, I was confused and thought it to be ACP >> Permissions >> Permission Roles >> Forum Roles
Nice extension Paul!
I cannot see anything, no button, no link.... nothing. Nothing is happening when I mention someone by "@some_member". I am using phpbb 3.2.5, prosilver theme and php 7.0.