Manas Resources Delivers IRR Of 96% For Shambesai Gold Project In Kyrgyz Republic

Apr. 03, 2012 2:40 AM ET
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Manas Resources (ASX: MSR) has completed the Definitive Feasibility Study (DFS) for its wholly owned Shambesai Gold Project in the Kyrgyz Republic.

Metrics returned from DFS show Shambesai to be a low‐cost, high‐margin gold leach project that is a technically simple, low‐risk operation which can be commissioned in a relatively short time frame for a very low capital cost.

With a net present value of US$148 million (A$141.7 million), at an estimated gold price of US$1,500 per ounce, and an internal rate of return of 96%, at an 8% discount rate, Manas could achieve payback in as little as 10 months.

The Shambesai gold leach operation is projected to process 3.2 million tonnes of ore at 2.8 grams per tonne (g/t) to recover 245,000 ounces of gold over five years at cash costs of as low as US$411 per ounce.

This is expected to net Manas cash flow of US$208 million after the recovery of US$37 million in capital expenditure.

Stephen Ross, managing director, commented on the positive outcome:

"We are particularly encouraged by the technical simplicity of the operation, the relatively low capital costs to start up, high gold recoveries for a leach operation and low operating costs.

"The outcomes of the DFS allow us to rapidly develop a low‐risk and highly‐profitable operation at Shambesai which is expected to pay back all capital requirements within the first year of production.

"While the project initially targets near‐surface, high‐grade oxide material, confirmation of excellent gold recoveries through the leaching of the sulphide material has unlocked substantial additional project value and allows us to evaluate on going reserve and production growth from the current Shambesai Resource beyond the current mine plan."

Shambesai Metrics

The Shambesai Gold Project hosts a Resource of 3.2 million tonnes at 2.8g/t gold for 285,000 ounces, including a Probable Reserve of 2.5 million tonnes at 3g/t for 245,000 ounces of gold and additional Inferred material of 0.7 million tonnes at 1.9g/t for 40,000 ounces of gold.

The Probable Reserve is expected to generate US$166 million in net cash flow over the life of mine, with a further US$42 million expected from the Inferred Resource.

The project will be a simple, low‐cost vat leach and heap leach operation with 86% overall gold recovery, including 90% gold recovery for non‐refractory oxide and sulphide material contributing 92% of total gold recovered.

Improving the metrics further, recent successful Leachwell analysis on additional sulphide material highlights the potential to increase reserves and production rates beyond the current Shambesai Resource outlined in the DFS.

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