Manas Resources (ASX: MSR) continues to deliver a strong news flow from the company's Shambesai gold project, which is strategically located in the supportive mining district of the south of the Kyrgyz Republic in Central Asia.
The operations have been very well supported by the market, with late on Friday Manas delivering an agreement from underwriters for $0.20 September 2011 unexercised options valued at $10 million.
The underwriters are Macquarie Equities, BW Equities Pty Ltd and Blackwood Capital Limited, which is subject to standard termination conditions and an 8% fee.
The deal positions Manas with a significant cash war chest of $16 million, with the funds to be allocated to complete the Feasibility Study at Shambesai, and subject to completion of the study and permitting, the company can then move towards development of the project including commencement of mining and plant construction.
Stephen Ross, managing director of Manas, commented on the deal, “We are extremely pleased with the strong underwriting support shown for Manas and the Underwriters’ confidence in Manas’ low cost, high grade Shambesai pre‐development project, which continues to grow in resources and scale.”
Manas's largest shareholder, Perseus Mining Limited, has advised that it is party to a sub-underwriting agreement, subject to the shortfall amount, to subscribe for shares to maintain the current 23.86% stake.
Manas boosts Shambesai gold oxide resource by 40% to 460,000 ounces
Highlighting the potential of the Shambesai gold project, just last week Manas delivered a boost in the gold oxide resource.
The significance of the 40% boost to 460,000 ounces (Indicated and Inferred) of the oxide is the ease of gold extraction at a low cost, which will provide early cash flows for Manas when the company starts gold production - which is forecast to start at the end of 2012.
The high grade oxide component from the surface is 2.7 million tonnes at 3.6 grams per tonne (g/t) gold for 300,000 ounces.
The latest gold boost is not just for the oxide, with the Shambesai resource upgraded to 11.6 million tonnes at 2.1g/t for 766,000 ounces, with 60% classified as oxides.
Another major plus for Manas is when the Shambesai resource is combined with the nearby Obdilla resource, the company then has a global Indicated and Inferred Resource of 1.25 million ounces within a 4 kilometre radius.
Discovery cost just US$9 per ounce
The total discovery costs for the Shambesai resource just US$9 per ounce, with the likelihood of further gold discoveries due to the mineralised zones at the project remaining open along strike to the west and at depth.
Manas is the largest and most active gold explorer in the Kyrgyz Republic with projects located in the south of the country - and holds an extensive 4,400 square kilometre land holding.
Feasibility Study on track for December quarter delivery
Manas is currently completing a preliminary mining evaluation and pit optimisation study incorporating the new resource model, updated capital and operating costs, and a realistic medium-term gold price of US$1,500 per ounce.
Importantly for Manas - the Feasibility Study remains on track for delivery to the market during the December quarter. The company can then move forward to the granting of mining licenses and an early move into the implementation phase at Shambesai.
Gold recoveries of plus 85%
Recent vat leach and heap leach test-work at an independent laboratory in the Kyrgyz Republic under the supervision of Manas has demonstrated significantly improved gold processing parameters, including higher gold recoveries, quicker leach times and lower cyanide consumption.
A bulk sample of high-grade ore greater than 8.0g/t gold was taken from zones which will be mined first at Shambesai, and was then tested in columns under conditions designed to replicate the Vat Leach process for extracting gold from the Shambesai oxide ore.
The results indicate recoveries of more than 85% can be achieved in rapid leach cycles of less than 36 hours, with very low cyanide consumption of 0.2 to 0.3 kg/t for minus 12mm crushed and agglomerated ore in vats at high solution circulation rates.
The outcome is that the test work results confirm the suitability of the process route selected for the project, providing a very low capital and operating cost ore treatment route.