Kryso is an emerging mineral exploration company that is principally focussed on exploring the gold and other precious metals deposits previously discovered in Central Asia during the Soviet Union era and then, where appropriate, bringing them into production.
Kryso, which has its head office in London, is a public company that was admitted to the AIM in December 2004 in order to continue funding the development of the Pakrut Gold Deposit, further explore the Pakrut Licence Area and to obtain and acquire other gold and base metal deposits in Tajikistan and elsewhere in Central Asia. The Group's executive directors and senior management are based in Dushanbe.

The Company's executive directors have a proven track record of operating in Tajikistan and they believe that Kryso Resources is the first foreign company to obtain a 100% interest in a mining and exploration project in the country.

From 1 April 2004, LLC Pakrut, a wholly owned subsidiary of the Company, was granted a licence and geological lease to explore and exploit the Pakrut Licence Area which comprises the Pakrut gold deposit and the surrounding 6,300 hectare exploration area located in the metalliferous southern Tien-Shan Fold Belt. This belt is reputed to have the second largest known gold resource after the Witwatersrand in South Africa.

The Group intends to conduct a feasibility study to assess whether the Pakrut gold deposit can be developed into a producing mine and also intends to explore the already identified mineral deposits and areas of mineralization in the Pakrut Licence Area.

http://www.proactiveinvestors.co.uk/articles/art.php?KYS2

Thanks for that aldwickk. Increased my holding in this share last week and really think it is due for a bit of attention. Do we know any reasons for the holdings reduction by RAB?

TIPSPrevious Tips
Kryso Resources: Speculative Buy at 13.75p
A tip from Tom Winnifrith of www.t1ps.com - 23/12/07

Evil is not always right about everything (Princess Anne, Regus, Stanelco, etc). But occassionally the old boy gets it very rights (Cherie Blair, Golden Prospect, Sanctuary etc). My tip today is for Evil the love that dare not speak its name. I refer not to that activity which EK says never happened at Rugby school. But to Kryso Resources which at 13.75p is very cheap. The stance is speculative buy at up to 18p with a target price of 36p.

Kryso Resources (KYS) has become a bit of a joke with myself and Evil. Evil was a director until he got into a spot of bother over the timing of some share trades and was forced by the Nomad to step down. My own view is that it is the Nomad who should have been made homeless not Evil but there you go. Evil is still a big fan but we need to tap into his deep understanding of the geology of the prospect to see why. This is a very simple story. Kryso has a proven resource at Pakrut in Tajikistan of 1.056,587 oz gold. There is still exploration upside at Pakrut and at 3 nearby staelitte deposits. My simplistic analysis is that at $75 oz for the resource and $7.5 for a massively risk weighted potential to double it via exploration Kryso is worth 36p a share on a fully diluted basis. That makes my stance speculative buy at up to 18p with a one year target price of 36p.

Pakrut
Pakrut is in Tajikistan. In Harry Potter political prisoners are sent to Azkaban and it strikes me that when Evil comes to power Tajikistan is the sort of place that Cherie Blair, Patricia Hewitt and others guilty of thought crime will find themselves sent to. But by the standards of the region it is politically stable and has an established fiscal and mining regime. I have put an additional 25% risk weighting in my model to allow for the fact that Tajikistan is not East Surrey.

Kryso floated in December 2004 specifically to exploit this asset which was fairly well defined by exploration activity during the Soviet era. Since the IPO the company has beavered away on exploration work and now has a resource of 1.056 million ounces. There is significant scope to increase that resource via additional exploration both at Pakrut and on neighbouring satellite sites. the company has a few other assets (notably the Hukas nickel copper project) but I propose to ignore them completely. What the City wants and what I want is not hope factor but the prospect of near term cashflow and production. That is what Pakrut offers.

Pakrut should be in production within 24 months. The company reckons that $50 million will build a mine with both open pit and underground operations producing 100,000 oz per annum for a decade. If I am correct about exploration upside then you can bump up both the annual output and projected minelife. Kryso has 1 million of cash so if one assumes that the mine can be 70% debt financed then it still has to raise 7.5 million in additional equity. I am confident that it will do so the issue is at what price.

Even on the 100,000 oz model then at a 25% discount to current gold prices this operation could be throwing off - on my calculations - c$40 million of free cashflow per annum. I would remind you that this is a company which - at 13.25p - is valued at just 11.7 million.

Upside Risks
I am a modest gold bull (still). The Governments of the West continue to print money to keep their voters happy. I have no faith that Cameron will be better than Blair, Clinton - or hopefully someone else - better than Bush or that whichever crooks run the EU nations will change their misguided ways. Global interest rates are coming down. So gold has to be a good bet. But as it happens with gold at $820 I use $600 in my forecasts as I am a cautious chap.

Kryso should be able to use the cash from Pakrut to develop other assets in Tajikistan. I do not factor this into my calculations.

There is real scope to grow the resource at Pakrut and also to generate additional rock from smaller nearby satellite deposits to use in a mill at Pakrut. I attribute a nominal value for this.

Downside Risks
The management could be knaves. This is after all mining. But I judge managing director Vasilios Carellas who is an experienced geologist to be a straight sort of guy as is the FD, New Zealander Craig Brown. On the ground the operations manager Abuali Ismatov is well connected and knows his stuff. So I do not view this as a big risk.

Kryso needs to raise 7.5 million of equity and 17.5 million of debt to get Pakrut into production. I am lead to believe that there is real confidence and strong indications of support but there is a risk this won't happen.

Any mine faces geological/operational risk.

Tajikistan is not east Surrey. I have discounted my valuation by 25% to reflect this. But as the 'stans go it is actually relatively stable.

Valuation
A valuation of $75 oz for the resource plus a nominal $7.5 million for the exploration upside would, if discounted by 25% to account for political risk, give a valuation of 36p per share on a fully diluted basis. Put another way such a valuation would leave Kryso valued at $62 million. Add in the assumed project cost of Pakrut and one would get an Enterprise Value of 112 million or less than three year's free cashflow on my base case assumption. I do not think my assumptions are reckless and at 13.75p Kryso is a "speculative buy" at up to 18p with a 36p target price.


Key Data
Market: AIM
EPIC: (KYS)
Spread: 13p - 14.5p (10.3%)

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The chances of KYS producing anything tangible in the next 5 years are less than winning the National Lottery. Avoid!

Why ? can you back up that statement with facts.

How long has it taken HMB to start production? CEY wont reach production for another year after all the necessary feasibility studies and raising the project finance.

I would stick to producing mines like GFM if i was you then, but you would have to pay more then the 15p i paid for them when they were years away from producing.

As you know KYS is being punted by TW and EK on T1ps and sharecrazy.com the spread is enough to drive a bus through at least if you buy a lottery ticket you wont have to wait years for the result!!

The odds on blackjack and bingo are better then the lottery and the pools.

break out territory

RAB selling their shares in KYS came at just the right time with the gold price rocketing now.

Off topic, I can never understand how RAB works, those people are experts in their field but selling KYS and buying Northern Rock, alright different funds I suppose, but still the same.

anyone know why the sudden jump in SP, surely the increased price of gold not affecting this SP is it.?
Alex

KYS has been undervalued for a while now in terms of NPV. Increased market interest, rising value of gold and commodities being generally favoured in terms of risk seem to be collectively helping this share at the moment.

RAB out and hopefully the overhang cleared--tips and evil have given a fair value of 36p on this one.

Its nice to see more posters on this thread now.

KYS are presenting in London on 13th February 2008.

Details and FREE registration click HERE

Kryso Resources PLC
13 February 2008


13 February 2008

Kryso Resources plc

('Kryso' or 'the Company')

AIM: KYS

Highly Positive Pre-Feasibility Study for the Pakrut Gold Project

Highlights:

Operating cash flow before tax of US$345m
Post-tax NPV and IRR of US$115 million and 67% respectively at 10%discount rate
Start-up capital requirement of US$65 million
Average cash cost, including royalty, of US$291/ounce
Average production of over 100,000 oz per annum over life of mine
Minimum mine life of 6 years processing 1.46 Mt of ore per annum
Mineralization still open in three directions

Kryso Resources plc, the mineral exploration and development company with in
excess of one million ounces of JORC Code-compliant gold resources defined by
GeoLogix at its 100 per cent owned Pakrut gold project in Tajikistan, is
delighted to announce the positive conclusion of the Pakrut pre-feasibility
study ('the Study'). The Study has been conducted internally by Kryso's
technical team and used up-to-date information provided by the Company's
various consultants as well as internal data. The Study envisages the
development of a combined open pit and underground mine, a processing facility,
and the associated infrastructure.

The basis for the Study was the November 2007 GeoLogix resource estimate. The
Company anticipates, however, that further gold resources will be outlined at
Pakrut by exploration in 2008 and beyond as mineralization is open to the east
and west along strike, and to the south down dip. This could significantly
increase the net present value and the rate of return of the project in the
future.

However, the Study indicates that the Pakrut project is economically viable on
the basis of the resources presently defined.

Kryso Resources' Managing Director Vassilios Carellas comments:

'The pre-feasibility study for the Pakrut gold project represents an interim
stage of the bankable feasibility study which is currently underway. We
anticipate its completion within the next few months and will naturally look to
procure mine development financing as soon as possible after this.'

SUMMARY OF THE FINDINGS OF THE PRE-FEASIBILITY STUDY

Background

The estimated direct capital cost for bringing the project into production is
US$65M. Based on the interim GeoLogix resource estimate, the mine would have a
minimum life of six years at 1.46Mt per annum. The forecast average cash cost,
including royalty, is US$291/oz, the total pre-tax cash flow is approximately
US$264m, and the estimated pre-tax NPV and IRR are US$157M and 84.08%
respectively at a 10% discount rate.

Resource Model

Based on the results of additional core drilling throughout 2007, the Company
updated the first JORC-Compliant resource estimate produced for Pakrut by
Snowden Mining Industry Consultants ('Snowden') in March 2007, with a second
resource produced by GeoLogix in November 2007. The Company prepared the
electronic database as well as the mineralization interpretations, which were
then reviewed by Snowden and GeoLogix. The JORC-compliant interim resource
estimate (including Measured, Indicated and Inferred resources) produced by
GeoLogix at a 0.5 g/t Au cut-off was 15.05Mt @ 2.18 g/t Au. Drilling will
continue this year to define more resources that will then be included in
another update to the resource in a year or so.

Mining

After considering several options to develop the Pakrut deposit, the Company has
opted for a combined open pit and underground mine. Initially the bulk of the
feed to the plant will be from the open pit with the underground mine providing
the bulk of the production in the latter years

Metallurgy and Processing

The Company proposes to treat the Pakrut ore on site producing a gravity-float
concentrate that will then be passed through the Gekko Intensive Leach Reactor.
Kryso believes that this process will not only considerably reduce the initial
capital outlay, but also will reduce the footprint of the plant required and
result in only a fraction of the ore being exposed to cyanide. While the Company
has based its projected gold recoveries on historical testwork, studies are
currently underway at SGS Lakefield; these results are expected soon. Based on
previous metallurgical testwork programmes, the Company expects recoveries for
gold in excess of 90%.

Tailings Storage Facility (TSF)

The TSF will be constructed from the waste material from the open pit. According
to the designs submitted by the Company's consultant, the waste stripped from
the open pit will provide a TSF sufficient to accommodate any tailings produced
from the proposed production as well as from any additional resources that may
be incorporated into the mine plan.

Environmental Studies

The Company has contracted Prime Resources (Pty) Ltd, an environmental
consultancy based in South Africa, to carry out this study along with a local
environmental consultancy based in Dushanbe (LLC Ziderer).

The study is currently being carried out in accordance with the requirements and
policies of the World Bank and Equator Principles, and the baseline study and
environmental and social impact assessment report will be presented in the
format recommended by the Company's consultants.

Infrastructure and Utilities

Access to Pakrut from the capital city Dushanbe is by a 57km sealed tarmac road
to the village of Ramit followed by a 50km dirt road along the Sardi-Mienna
River valley.

Electrical power to the mine will require a connection to the national grid to
take advantage of the very cheap cost of power in the country.

Process water can be extracted directly from the Pakrut River, which runs all
year round. This is easily achieved by running a water pipeline upstream for
approximately 1km from the planned site of the plant.

Potable water can be obtained from one of the many local springs that flow all
year round; this water is currently being used for cooking, cleaning and
drinking.

Personnel

The overall policy of the Company has been to employ local employees wherever
possible; this policy will continue. The Company, however, does realise that
certain skills are required to build a mine and these skills may not be
available locally. Consequently it has already started to employ key expatriate
personnel that will assist the company in achieving its goal to begin
production.

Development Strategies

The Company has considered three options to develop the Pakrut gold deposit. The
preferred option is the simultaneous development of the open pit and underground
mine. It is estimated that the project start-up will be in the last quarter of
2008 with the first full production year in 2010.

Capital Costs

The direct capital cost for the existing life of the project has been estimated
at US$81 million. US$37 million has been budgeted for the construction of the
plant and starter tailings' storage facility, US$15 million for infrastructure
and utilities, US$ 6 million for surface mining equipment and spares, and US$20
million for underground mining equipment and contractor development. Project
overheads, which include engineering studies, project management and
administration, have been estimated at US$3M.

Operating Costs

An open pit mining cost of $1 per tonne has been assumed. This is over 35% more
than the budgeted operating cost for 2008 for an open pit mine in the north of
the country. This particular mine uses a mix of Western and Russian manufactured
equipment; this is also the Company's intention.

The underground mining cost is based on industry standard estimating techniques
and consideration of costing information available for the proposed longhole
stoping method. This cost varies widely depending on geography and the specific
nature of the mineral deposit. A range of possible operating costs was
determined ranging from $7.00/t to $14.00/t. In the event a conservative $12.00/
t was chosen for the purposes of this study.

The overall processing cost for Pakrut is approximately US$7.78 per tonne of ore
milled. This has been calculated by reference to published data on similar
operations elsewhere in the world, taking into account local costs in
Tajikistan.

The average total operating cost for Pakrut, including royalties, over the
six-year operating life is US$ 20.38/t

Financial Analysis

The following gold price forecasts for the life of the existing resources have
been assumed based on averages of predictions from seven major institutions:


2008 - US$ 868.54
2009 - US$ 876.83
2010 - US$ 920.60
2011 - US$ 1033.50
2012 - US$ 997.50
2013 - US$ 650.00
2014 - US$ 650.00
2015 - US$ 650.00


Total net cash flow after tax for the project is US$200M.

This incorporates a cash cost per ounce of gold, including royalties, with
ranges between US$168/oz and US$365/oz, with an average of US$291/oz over the
life of the project.

As with most projects of this nature, it is sensitive to the gold price, but
significant upside potential exists at the current market price for gold.

Future Work

The BFS will be completed by the end of the second quarter of 2008, subject to
the completion of the various studies carried out by the Company's consultants.
The following, which includes the consultant's studies, have to be completed:


The metallurgical testwork programme at SGS Lakefield, and the
associated plant designs by Gekko
The geotechnical drilling in order to finalise the pit slope angles
The final open pit and underground designs and schedules
The final tailings dam design
The detailed infrastructure design and capital estimates
Detailed price schedules for all the capital equipment in order to be
within 15% accuracy in the estimates
Evaluate in detail the different financing and production options
available to the Company to ensure that the best financial and practical
options are selected

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