http://www.kasbahresources.com/cms/attachments/20120228_Hartleys_...

http://www.kasbahresources.com/cms/attachments/20120228_Hartleys_Feb2012.pdf

KASBAH RESOURCES LIMITED
Developing a High-Grade Tin Mine in Morocco
Kasbah Resources Limited (“Kasbah”, “KAS”, “Company”) is an emerging tin company currently advancing the development studies of the Achmmach Tin Project (100% owned) in Morocco. Achmmach is a pure tin project twice the average grade (0.8% Sn vs 0.4% Sn) of many undeveloped projects and the coarse grained and clean nature of the ore, will allow for simple beneficiation via gravity and flotation concentration.

The Company has completed a scoping study on the underground development of the project, with feasibility studies (PFS and DFS) both set for release in CY2012. First tin production is estimated from Q1 CY2014. The Achmmach scoping study demonstrated that the underground development delivers robust project economics, with a gross margin of US$72/t of ore, an after-tax NPV10 of US$126m and IRR of 43%, based upon a tin price of US$23,000/t. Solid operating cash costs of US$12,684/t of tin in tin concentrate have been estimated from a 800ktpa operation producing ~5.6ktpa tin, with an initial mine life of 7.5 years.

Drilling Filling in the Gap for Resource Upgrades
Recent exploration has focused on resource growth, with KAS concentrating efforts on the “Gap Zone”, a ~400m tin mineralised zone that links resources in the west (Meknes/Fez/Marrakech Zones) to resources in the east (Eastern Zone). Prior to a development decision, the Company is targeting a minimum resource of 10mt for ~80Kt of tin (grade 0.8% Sn), which implies over 3mt of resource growth is being targeted. Significant tonnes at very good grade are expected from the Gap Zone, setting up resource updates and upgrades, prior to the PFS/DFS releases in late Q1 CY2012 and late Q4 CY2012. The drill results to date from the Gap Zone have to date exceeded all expectations in regards to mineralisation widths and tin grades.

Strong Fundamentals for Improving Tin Prices
The International Tin Research Institute forecast increasing end-user demand for tin will outstrip diminished supply for the 3rd consecutive year, with a shortfall forecast. Fundamentals remain solid for improved tin prices in 2012, with tin prices forecast to increase to US$24,000-25,000/t by mid-year. The longer term view remains supportive of higher prices, given the growing demand in “lead-free solder” use in consumer electronics and few new mining operations being proposed, along with historically dominant supply centres in decline.
We have a sum of parts valuation and price target for Kasbah of 44cps, dominated by our risk weighted project valuation (NPV12) for Achmmach of 28cps, incorporating funding scenarios, using different tin price simulations and base case project assumptions. Kasbah remains focused on increasing project returns through growing the resource base, extending the mine life, as well as optimising the mined tin grade while increasing mill recoveries. Our modelling indicates that every 1% improvement in tin recovery adds ~5% value to the project. With sentiment for tin strong and Achmmach continuing to prove-up as a quality project we recommend Kasbah as a Buy.