Manas Resources’ Kyrgyz subsidiary CJSC Z-Explorer has been issued the ‘Shambesai Infrastructure Land Transformation and Land Allotment’ or ‘Land Permit’ for its Shambesai Gold Project in the Kyrgyz Republic. This key permit, issued via government decree through the supervising regional agency the Kadamjai Administration Office, rezones the project area from agricultural to industrial-use covering the infrastructure, mining and processing facilities for the construction and operation of the project.

The award of the Land Permit is a significant milestone as it allows Manas to immediately commence initial development works at the site area, including road upgrades and minor earthworks, and prevents any further pastoral or other activities within the project area that might impede project development.

Award of the Land Permit also provides a trigger for Manas to commence the application for final project design and construction permits, including completion and submission of the OVOS, the Kyrgyz equivalent of the Environmental and Social Impact Assessment.

The granting of the permit has enabled Manas to immediately commence development of a construction office at Shambesai and to start road upgrade works on the site to facilitate early mobilization of the construction team once construction permits are issued.

Manas acknowledges the ongoing support of the Government of the Kyrgyz Republic, and especially the Kadamjai Regional Administration (KRA) and Maidan Village Authority (MVA) for the timely awarding of the Land Permit to allow pre-development activities to immediately commence. Manas notes the recent signing of an MoU with the KRA and MVA covering local and regional cooperation for timely development of the project.

Manas is also pleased to report discussions regarding full financing of the capital requirement of US$41.3 million for the project are advancing with a number of banks and institutions from Europe and Asia. Manas is confident current interest will result in the receipt of project financing for the full capital requirements to first gold pour being available on schedule for the commencement of construction in the first quarter of 2014.

The company is now updating the Shambesai bankable feasibility study (BFS) schedule and capital cost expenditure timetable to reflect the current expectations for award of the final environment and construction permits, and timing for the drawdown of project finance.

The BFS forecasts a technically low-risk and highly-profitable gold operation with undiscounted net cash flows of US$147.7 million after operating cash costs of US$387 per ounce of gold (C1 costs including revenue based royalties and taxes) with a capital cost to first gold production of US$41.3 million and a payback of this capital within the first 11 months of operation.

Shambesai is projected to process 2.54 million tonnes of ore @ 3.4 grams/tonne gold and recover 227,000 ounces of gold at an annual average of 50,000 ounces over a 4.5 year mine life. The BFS cash flow estimates used a US$1400 gold price and are made assuming the treatment of all oxide and sulphide reserves within the optimized pit shell, and are after all revenue-based taxes and royalties have been paid.

A preliminary drilling and trenching program has recently been completed at the Djilginsai project area, 30km from Shambesai. Drilling is under way at the 485,000 ounce Obdilla project with results from both programs expected shortly. When the Obdilla program is completed the rig will move to Shambesai for exploration, geotechnical and infill drilling.

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