Manas Resources (ASX: MSR) has entered into a joint venture agreement with Central Asia Resources (ASX: CVR), under which Manas can earn up to a 70% interest in Central Asia's 95%‐owned Altyntas Gold Project in the Akbakai region of central Kazakhstan.
Under the terms of the joint venture, Manas Resources has the right to earn its interest in the advanced project through the expenditure of A$2 million on exploration and mine development, and will manage the joint venture.
The Altyntas Project is located 25 kilometres southeast of the operating 1.5 million tonne per annum Akbakai gold mine, which presents an immediate toll treatment opportunity for the project.
Central Asia has previously signed a Memorandum of Understanding with the mine's owner, JSC AK AltynAlmas, providing an avenue for the negotiation of a toll treatment agreement for the processing of ore from Central Asia's Altyntas, Kengir and Kepken prospects at the Akbakai gold plant.
Manas has already been in discussions with AltynAlmas.
Altyntas could potentially provide a low‐cost, near‐term production opportunity via toll treating at the Akbakai gold mine after the confirmation of certain shallow mineralised zones through infill and extensional drilling.
Stephen Ross, managing director, commented: "Altyntas provides Manas with an immediate drill target and exploration opportunities for our geological team while the Shambesai Gold Project development schedule is finalised by the design and development team over the coming months.
"The project also provides us with a simple, near‐term cash flow opportunity via toll treatment while satisfying our strategy of near‐term production opportunities requiring limited capital."
Manas has already begun drilling and exploration work at the Altyntas prospect and has committed to an initial and immediate expenditure of $0.5 million to test previous drilling on the Altyntas prospect with a 4,000 metre reverse circulation drilling program.
A decision to commit to the remaining $1.5 million will be made following evaluation of the initial results.
After the initial confirmatory drill program, the deeper extensions of the gold mineralisation that form the bulk of the Altyntas prospect will be tested in a more extensive drilling campaign after the winter break.
In parallel to the initial drilling at Altyntas, Manas will conduct soil sampling to test the extent of a large, low‐grade oxide gold anomaly at the nearby Kepken prospect.
Shambesai - low cost, high margin project
A Definitive Feasibility Study released for Manas' flagship Shambesai Gold Project in April has confirmed Shambesai as a low‐cost, high‐margin gold leach project that is a technically simple, low‐risk operation which can be commissioned in a short time frame for a very low capital cost.
Shambesai has a projected net cash flow of US$208 million after capital expenditure of US$37 million from the production of 245,000 ounces of gold at an average grade of 2.8 grams per tonne gold over an initial 4.5‐year mine life, based on a US$1,500 per ounce gold price.
Average life‐of‐mine cash costs (C1 costs) are US$411 per ounce.
Manas is currently in negotiations over debt financing options for the Shambesai Project and positive interest has already been received from a number of well‐credentialed banks and mining finance institutions.
The low capital cost to first gold of US$32.6 million and the extremely quick payback of this capital in less than a year places Shambesai in a strong position for attracting very favourable debt financing terms.
Manas is also progressing the issue of a production licence for the project after receiving TEO approval last month.
Construction is on track to begin during the first half of 2013 with gold production forecast for early 2014.
Today's JV agreement with Central Asia Resources provides Manas with a simple, near‐term cash flow opportunity via toll treatment.
Importantly, there is already an agreement in place providing an avenue for the negotiation of a toll treatment agreement for the processing of ore from the Altyntas, Kengir and Kepken prospects at the nearby Akbakai gold plant.
The Altyntas Gold Project also gives the company an immediate drill target and exploration opportunities while the Shambesai Gold Project development schedule is finalised.
Construction is on track to begin at the low‐cost, high‐margin Shambesai Project during the first half of 2013, with gold production forecast for early 2014.
The joint venture deal is a strategic move by Manas which satisfies the company's approach of securing near‐term production opportunities requiring limited capital.
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