valuation??, page-4

Foster Stockbroking published this yesterday. Cut and paste, so hope you all can read it ok ...

Manas Resources Ltd (MSR.ASX)

? Market cap.~$31m and cash $1.3m + (14m options expiring Dec @ $0.20 in the money).

? Yesterday we met with management from MSR, a gold exploration company with projects in Kyrgyz Republic. The company is located to the south of Kyrgyz Republic where it is exploring for Carlin-style gold deposits covering 4,200km2. The main projects are Shambesai and Obdilla which exhibit a mineral resource base of:

o Shambesai ? 7.29Mt @ 2.8g/t Au 645,000oz;

o Obdilla ? 9.20Mt @ 1.6g/t Au 485,000poz; and

o Total: 16.49Mt @ 2.1g/t Au 1,130,000oz.

? A scoping study for the Shambesai project was recently released highlighting the following:

o 180,000oz Au recovered over six years at a cash cost of ~US$250/oz for the first stage of production;

o Production of the first 100,000/oz at an average head grade of 5.7g/t Au in the first three years at a cash cost of US$180/oz;

o Initial capital cost US$16.3M with a pay back of less than a year ? a total life of mine capital US$22m;

o EBITDA of US$118m @ US$1,000 gold price over the life of the mine; and

o Simple, low cost vat leach and heap leach operation with 91% overall gold recovery for oxide ore.

? Recent unrest in Kyrgyz Republic resulted in the end of a corrupt, presidential style government and the introduction of a parliamentary style democracy. MSR believes the new government offers security and transparency; subsequently it now works directly with the government on processing the mining application. If the permission process goes to schedule, the company estimates first production will commence in 1Q 2012.

? The Kyrgyz Republic has a long history of gold mining with several Western companies active in the resources sector, namely Centerra (TSX), Chaarat Gold (AIM) and Kentor (ASX).

? There remains substantial upside potential from the current and future drilling programs to increase the resource base and production rates.

? The political turmoil in Kyrgyz Republic, in our view, has adversely affected Western investor sentiment hence the low valuation of MSR to its peers on an EV/Resource basis. We believe there will be a significant correction once the risks are understood and this will bring the MSR share price on par with its peers.





Source: Company reports and FSB estimates



? We recommend MSR as a Spec Buy.