Turaco Gold

Manas Resources (ASX: MSR) continues to unlock the potential of the Shambesai Gold Project in the Kyrgyz Republic, with the latest results extending the high grade gold shear zone. What is so important about the latest high grade gold hits are that they are located outside the current resource boundary. The highlight from the latest batch of assays was 21 metres at 9.71 grams per tonne (g/t) gold from 134 metres, including 9 metres at 16.7g/t gold. Other significance intersections included: - 18.3 metres at 4.50g/t gold from 19 metres; - 16.2 metres at 4.11g/t gold from 245 metres; - 15.3 metres at 3.75g/t gold from 15 metres; - 24 metres at 1.62g/t gold from 242 metres; and - 5 metres at 7.75g/t gold from 217 metres. Manas said that the high grade intersections further demonstrates that the shear zones within the broader resource area at Shambesai contains continuous high grade mineralisation, and that the results are expected to have a significant impact on mineral resources, pit optimisation and updated project economics. The results represent the final round of assays from this year’s now completed 12,535 metre drilling campaign. Resource estimate update Manas is currently working on a resource update for Shambesai which is expected to significantly increase the current resource of 645,000 gold ounces. In total, the company has a resource of 1,130,000 gold ounces at the Shambesai and Obdilla prospects, which are located just seven kilometres apart. The new resource will then be incorporated in an updated pit optimisation, using updated costs and gold price from the Feasibility Study work. The study is progressing on schedule and Manas is also continuing discussions with the Kyrgyz Ministry of Natural Resources for the timely approval of the TEO Study (Russian interpretation for Technological and Economic Justification Study) and subsequent awarding of a mining licence. Manas said the study would concentrate on the high‐grade oxide resource - which the company’s November 2010 study estimated could return cash flows of US$118 million at a US$1,000 gold price. The Feasibility Study is on-track to be delivered before the end of 2011. 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. The company is moving towards the development of a low cost gold leach project. Compelling valuation economics The key valuation parameters of Shambesai provide a compelling story. With a project internal rate of return of 201%, on a gold price of US$1000 per ounce, well below the current spot of around US$1900 indicates the potential profitability and return on funds invested in the project for Manas. Annual gold production at Shambesai is forecast at 35,000 ounces for the first three years, for an average of 30,000 ounces over six years, with a payback period of just nine months. The average operating cost is US$180 for the first three years, with the initial capital cost to production just $16.3 million. Some major investors have significant holdings in Manas, with Macquarie Bank (ASX: MQG) and Lion Group holding 15 million shares each, with Macquarie increasing its stake earlier in the year.