Shambesai has the potential to be a simple, high-grade, high-recovery gold leach project with a BFS complete for more than 220,000 ounces of gold at US$387 per ounce. Total LOM (C3) after capital and tax estimated to be US$676/ounce.
The Committee had recommended the full development of the project after reviewing all license and permit submissions as well as considering its impact on the local community and the country.
It also issued an official decree to allow Shambesai development to continue unhindered.
This highlights the considerable public support from the Kyrgyz Parliament and Government for the timely development of the project, which will contribute significantly to the national economy.
The company also expects to make an OVOS (the Kyrgyz Republic equivalent of the Environmental and Social Impact Assessment) submission soon and is in advanced discussions with banks and institutions for financing of the project's capital expenditure.
Manas is now updating the Shambesai Bankable Feasibility Study (NYSE:BFS) schedule and capital cost expenditure to reflect the current project timeline including expectations for award of the final environment and construction permits, and timing for the drawdown of the project finance opportunities currently being discussed.
Energy and Minerals Parliamentary Committee
The Energy and Minerals Parliamentary Committee had reviewed all license and permit submissions made by Manas, considered support and concerns from the local community and reviewed the socio‐economic contribution the Shambesai Gold Project will make to the Kyrgyz Republic and, in particular, to the local Maidan community nearest the deposit.
This had led to the recommendation for its immediate development.
In addition, the Parliamentary Committee instructed national and local authorities, via official decree, to allow development to continue unhindered and according to current schedules, subject to Manas meeting government and local community laws and guidelines.
Manas expects to receive a structured support regime that unites both government and community backing as one and potentially paves the way for the commencement of development of the Shambesai Gold Project in 2014.
Since it was issued the "Shambesai Infrastructure Land Transformation and Land Allotment" or "Land Permit" in September 2013, the company has been working towards a number of key submissions to advance towards construction.
This includes the completion and submission of the OVOS, the Kyrgyz equivalent of the Environmental and Social Impact Assessment (ESIA).
Manas is looking forward to submitting the OVOS shortly with the positive outcome of the Parliamentary Committee hearing providing an impetus for the OVOS submission.
Upon submission of the OVOS Manas will initiate the completion of detailed project design in conjunction with its primary consultants, Beijing General Research Institute for Mining and Metallurgy (BGRIMM) and Asia Rud Project (NYSE:ARP).
The company is also advancing discussions regarding financing of the capital requirements for the Shambesai Gold Project with a number of banks and institutions from North America and Asia.
The recommendations of the Parliamentary Committee are expected to assist with this financing process.
Shambesai gold project: BFS Highlights
- Net cash flow US$148M after capital, taxes and royalties (excluding financing costs) from the production of 227,000oz of gold over a 4 ½ year mine life at US$1,400 gold price;
- Average LOM cash costs (C1 costs excluding royalty) of US$387/ounce;
- Shambesai Project in lowest quartile of cash costs for gold producers worldwide;
- Total LOM (C3) after capital and tax estimated to be US$676/ounce;
- Capital expenditure to first gold pour of US$41.3M with an expected pay back of 11 months;
- After-Tax Net Present Value (NYSE:NPV) of US$105M with an Internal Rate of Return of 67% at an 8% discount rate and US$1,400 gold price; and
- Simple, low-cost vat leach and heap leach operation with projected 84.8% overall gold recovery; including +90% gold recovery for oxide material which contributes +90% of the total gold recovered.
Manas Resources' Shambesai Gold Project has received a strong vote of confidence from the Kyrgyz Republic's Energy and Minerals Parliamentary Committee decision to recommend immediate development of the project.
This would also add certainty for the project during the company's discussions with potential financiers.
That the recommendation will also smooth the way with national and local authorities is just icing on the cake.
Mine and plant construction is scheduled for 2014 with gold production targeted for the first half of 2015.
The Shambesai Project has the potential to be in the lowest quartile of cash costs for gold producers worldwide, with total LOM (C3) after capital and tax estimated to be US$676/ounce.
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