Manas Resources Limited ACN 128 042 606

Level 2, Suite 9, 389 Oxford Street Mt Hawthorn, WA 6016

Australia Telephone: +61 8 9380 6062

Facsimile: +61 8 9380 6761


Manas Resources Limited ("Manas" or "the Company", ASX: MSR) is pleased to provide the following report on activities for the September 2016 Quarter.

SUMMARY Victoria Gold Project (VGP) Heads of Agreement, Tanzania
  • Due diligence and legal structuring of the advanced-stage VGP in Tanzania progressing

  • Significant holding with identified areas of gold mineralisation and excellent exploration upside, strategically located near several established mining operations in the multi-million ounce Lake Victoria Gold Field

    Shambesai Gold Project (SGP), Kyrgyz Republic, Central Asia
  • Binding Term Sheet signed for the disposal of shares in and loans to the Company's Australian subsidiary, Manas Holdings (Kyrgyz) Pty Ltd, which owns the SGP, for US$10 million

  • Sale transaction anticipated to complete towards the end of November 2016, with a US$500,000 deposit (refundable in very limited circumstances) received

  • Oversubscribed Share Purchase Plan raises gross proceeds of $1.35 million

  • Appointment of Mr Philip Reese as the Company's Chief Executive Officer

    Victoria Gold Project (VGP) Heads of Agreement, Tanzania

    As announced on 26 June 2016, Manas executed a binding Heads of Agreement ("HOA") to purchase the Victoria Gold Project ("VGP") in Tanzania from Cienega S.A.R.L ("Cienega") for total consideration of US$4.0M ("Transaction") consisting of:

    • US$200,000 non-refundable deposit ("Non-Refundable Deposit");

    • US$1.8 million in cash ("Cash Component"); and

  • US$2.0 million in fully paid ordinary shares in Manas at an issue price of A$0.002 per share ("Consideration Shares").

The Transaction is conditional upon completion of technical and legal due diligence to the satisfaction of Manas in its sole discretion, Cienega perfecting title to the VGP licenses and transferring the licenses clean and unencumbered to Manas and other conditions precedent customary to a transaction of this nature, including shareholder and regulatory approvals.

The VGP comprises an extensive holding strategically located in the prolific Lake Victoria Gold Field of northern Tanzania. The Project includes a large number of license areas previously owned by international mining companies such as Barrick Gold (now Acacia Mining), AngloGold Ashanti and Resolute Mining, which are currently held in several Tanzanian companies. Manas is continuing to work with Cienega on restructuring the ownership of the licences.

While the license transfer process is progressing, the large number of licenses involved and complex legal process means that the Transaction will take some time to complete and is dependent on resolving legal and taxation issues. Manas expects to provide further advice on the Transaction progress in November.

The VGP hosts a number of significant gold occurrences, including several which have previously had resource estimates reported. As part of the due diligence process, Manas engaged Haren Consulting to undertake a detailed review of the various gold deposits to assist in the planning for a rapid restart of exploration activities at the appropriate time.

Manas also initiated a review of the extensive geophysical database using Fathom Geophysics, to identify other quality exploration targets across the VGP area using the known deposits and prospects as reference points. Fathom Geophysics has extensive experience in target generation through re-evaluating and enhancing historical geophysical data sets and integrating this information with available satellite imagery, geochemical information and structural interpretations.

As previously announced, Manas engaged Independent Metallurgical Operations to review the historical metallurgical information for the project. As part of its recommendations, diamond core drilling would be a priority, following settlement of the transaction, to generate additional samples for metallurgical testwork as a precursor to a scoping study to assess the development potential of the various gold deposits within the VGP.

Following completion of technical due diligence, including by third party consultants, the Company will provide a further update on the prospectivity of the VGP.

Shambesai Gold Project, Kyrgyz Republic

Manas announced the signing of two separate agreements on 31 August 2016 relating to sale of its assets in the Kyrgyz Republic for a total consideration of US$10.5 million (approximately A$14 million).

GGMRD Transaction

Manas has executed a binding Term Sheet with Chinese State-owned enterprise, Guizhou Geological and Mineral Resources Development Company Limited ("GGMRD"), a company registered in Guiyang, capital city of the Guizhou Province, China and listed on the National Equities Exchange and Quotations ("NEEQ") in China. The key commercial terms of the agreement are as follows:

Assets Subject of Agreement:100% of the shares in Manas Holdings (Kyrgyz) Pty Ltd ("MHKL") and assignment of a loan due to the Company from MHKL to GGMRD. MHKL is the parent of the wholly owned Kyrgyz subsidiaries, CJSC Z-Explorer, CJSC Landmark and CJSC Savoyardy, the entities which own all of the Kyrgyz mineral assets. Sale of CJSC Savoyardy is excluded from the GGMRD transaction as it is the subject of a separate sale agreement (refer below).

Sale Consideration: US$10 million with a US$500,000 deposit (refundable in very limited circumstances) already received and the balance of US$9,500,000 due on completion, anticipated to occur around the end of November 2016.

Break Fee:US$300,000 break fee payable by either party in certain circumstances, including for termination of the agreement due to non-receipt of 3rd party regulatory approvals (including in the case of Manas, shareholder approval).

Timetable:An initial 30 day period from 26 August 2016 (and subsequently extended to 10 October 2016) for GGMRD to complete due diligence and finalise a long form share sale and purchase agreement and deed of assignment for the loan ("Transaction Documents"), at the end of which (or any time during) GGMRD can

terminate the agreement without penalty. At the conclusion of the 30 day period, the agreement becomes unconditional except for 3rd party regulatory approvals required by both GGMRD and Manas, for which a further period of 2 months is allowed for obtaining these approvals. GGMRD can extend this period by one month, with Manas's consent, for an additional non-refundable payment of US$120,000.

Regulatory Approvals: GGMRD will require approval from up to 4 different Chinese agencies (Guizhou Development & Reform Commission; Guizhou Provincial Department of Commerce; State-owned Assets Supervision and Administration Commission of Guizhou Province; and State Administration of Foreign Exchange, Guizhou Branch). Manas will require shareholder approval.

Post quarter end, GGMRD advised the Company that its due diligence investigations were completed to its satisfaction and it will now finalise the process of seeking the various regulatory approvals required to complete the transaction. Both parties are working towards settlement of the transaction towards the end of November 2016.


On 30 June 2016, the Company announced a Share Purchase Plan ("SPP") which closed on 22 July substantially oversubscribed. In recognition of the strong support from shareholders, the Board accepted oversubscriptions resulting in gross proceeds of $1.35 million from the SPP. At the end of the quarter, the Company's cash position was $0.9 million.

During the quarter, Manas's Board confirmed Mr. Philip Reese's position as CEO on revised terms with effect from 1 July 2016. Philip's focus will be on the exploration and development of the exciting VGP, which will become the Company's sole asset.

For further information, please contact:

Philip Reese Phil Retter

Chief Executive Officer Investor Relations

Manas Resources Limited NWR Communications

T: +61 8 9380 6062 T: +61 407 440 882

Manas Resources Limited published this content on 31 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 31 October 2016 16:27:06 UTC.

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