THE BOURSE WHISPERER: Manas Resources has reported the updated results of a mining evaluation and pit optimisation review that was recently completed on its 100 per cent‐owned Shambesai gold project in the Kyrgyz Republic.
The Shambesai project was upgraded in September to an Indicated and Inferred Mineral Resource of 11.6 million tonnes at 2.1 grams per tonne gold for 766,000 ounces of gold (0.5 grams per tonne gold cut‐off).
Manas said the revised pit optimisation studies at Shambesai demonstrate potential for net cash flows of up to US$190 million over the initial five years of the proposed mine by producing more than 200,000 ounces of gold (EBITDA at US$1,500 gold price).
Shambesai mineral inventory in preliminary pit shell. Source: Company announcement
The company provided highlights of the revised mining evaluation and pit optimisation study that include:
– Estimated net cash flows attributable to Indicated oxide Mineral Resource material only totals more than US$137 million over five years (EBITDA at US$1,500 gold price), with a further possible US$53M from Inferred oxide Mineral Resource;
– The current Probable Reserve of oxide material is estimated to be 180,000 ounces over the five‐year mine‐life with a potential of a further 40,000 ounces from currently Inferred oxide material that is contained within the pit shell;
– Production at the Shambesai gold project is projected to peak at 50,000 ounces of gold per annum in year three and average 40,000 ounces per annum for the five years of the projected mine life from the Indicated and Inferred oxides;
– More than 75,000 ounces of gold contained within sulphide material stockpiled during oxide mining is not included in the cash flow estimates;
– Cash costs are estimated at US$370 per ounce for the first four years, US$465 per ounce for life‐of‐mine;
– The Feasibility Study including final pit optimisation on high‐value near surface oxides to be completed in December 2011; and
– High potential remains for increased throughput, increased cash flows and increased mine life by further oxide ore discoveries and future sulphide ore treatment.
“We are extremely pleased with the updated cash flow numbers from the pit optimisation study which, when compared to the November 2010 Scoping Study, demonstrate that we can expect a much improved production rate and subsequent improved cash flows for the Shambesai shallow oxides alone,” Manas Resources managing director Stephen Ross said in the company’s announcement to the Australian Securities Exchange.
“Despite this conservative approach to the mining plan focusing on the near‐surface oxide material only, project cash flows from the updated pit optimisation work have almost doubled, plus we can expect very high initial returns at a medium‐term gold price of US$1,500 per ounce of gold.
“We look forward to the granting of our mining licence and an early move into the implementation phase of the Shambesai gold project.”