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Manas Resources Finds Investor Support For Low Cost Shambesai Gold Project

Manas Resources' (ASX: MSR) shares have been higher in recent days, attracting a "speeding ticket" from the ASX.

The company said it was not aware of any reason for the rise that had not been disclosed.

The strong project economics of its Shambesai project in the Kyrgyz Republic have likely been "re-discovered" by investors as its sits comfortably in the lowest quartile of gold developers and producers globally for when the project moves into production.

Manas' Shambesai in the Kyrgyz Republic 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 is estimated at just US$676/ounce.

These all-in costs are impressive on a global scale, and have the potential to deliver Manas high operating margins even in the current lower gold price environment.

Planning is underway for the commencement of exploration drilling in March 2014.

In total Manas has a Resource base of 1,184,000 ounces of gold at the Shambesai and Obdilla prospects, which are only seven kilometres apart.

Manas is well-funded with $5.6 million in cash at the end of December 2013.

ASX 'speeding ticket'

Manas received an ASX 'speeding ticket' yesterday in the form of a Price & Volume Query, after its shares soared to $0.042 an intra-day, which is 19% higher than the close last Thursday.

On Wednesday the company traded 12 million shares, which is ten times higher than the average over the past month.

The company said it is not aware of any information that has not been released to the market, which may explain the sudden investor interest.

Gold's resurgence

On factor providing an uptrend to the Manas share price is the recent rise in gold, which has gained for the past six-straight sessions, and is eyeing the US$1300 an ounce technical barrier.

Now considering the potential for Manas to produce at under US$700 an ounce, this provides an impressive margin of US$600.

Even at the peak of the gold price a couple of years - many global producers were not able to deliver this size of margin - yet Manas does in this new price environment.

Kyrgyz Republic support

Manas recently received the full backing of the Energy and Minerals Parliamentary Committee of Kyrgyz Republic for its Shambesai Project.

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.

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.

Analysis

The Shambesai Gold Project received a strong vote of confidence at the end of 2013 from the Kyrgyz Republic's Energy and Minerals Parliamentary Committee, following its decision to recommend immediate development of the project.

This would also add certainty for the project during the company's discussions with potential financiers.

Discussions regarding financing of capital requirements for the Shambesai project are advancing with banks and institutions in North America and Asia.

Manas will be updating the Shambesai Bankable Feasibility Study schedule to reflect the current project timeline in regards to obtaining environment and construction permits, and timing for the drawdown of project finance opportunities.

With potential all-in cash costs of under US$700, the project's economics place it among the lowest quartile of costs in the gold sector and envy of higher cost projects.

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