Manhattan Minerals Frank Lechner whynotgold@msn.com (UPDATED) posted February 07, 2003 What if I told you there was a company out there that has an immense gold and silver deposit which is only the precursor to the mother lode? The actual mother lode consists of copper and zinc. This company makes for a great story also. This deposit is located below a rural village; the town of Tambogrande in Northern Peru. What does that mean? It means that there have been stumbles along the way. During the last administration, the government was less a willing partner in mine development. This eventually resulted in an unlawful sabotage of the mining facilities. This cost the company upwards of a $1 Million, in lost facilities and assets. Since that period, the new government was elected, and a more conducive environment is taking shape. The Environmental Review has been submitted and appears to be on the fast track. The members of the community have submitted petitions for favorable development with over 10,000 signatures acquired. The village is looking at this as an opportunity to break the poverty and destitution surrounding the area. The jobs gained will provide most welcome relief in an area that can surely use them. This will also improve the standard of living as kids will once again be able to attend school, people will be employed, and a vibrant community can once again become visible. Over the past couple of years, Manhattan has agreed to move any parts of the town that the mine would adversely affect. This same company is located on the northern reaches of Peru near the Ecuadorian border. Where once the political situation was once volatile, this has now stabilized as Peru does have a democratically elected government. The current government is friendly toward mining companies whereas the last temporary government was, shall we say, adverse to the cause. Manhattan has gone out of its' way to be a good steward of the surrounding area and of the town itself. The resources of this company are being realized on a continuous basis. They have proved three significant mineral assets. These are called TG-1 which is a gold and silver deposit on top of the copper zinc deposit, and TG-3 and B-5 high grade deposits. These deposits on top of the copper are mineable by open pit methods with a low strip ratio, thereby allowing mine payback to occur rather rapidly. This gold and silver should be recovered at 90% and 62% respectively. The TG-1 deposit includes 1 Million ounces of Gold and 17 Million ounces of Silver sitting on top of 950,000 Tons of Copper along with 590,000 Tons of Zinc. The total deposit inclusive of the Copper/Zinc has the potential for 46.5M ounces of Silver. The TG-3 and B-5 deposits are located within 10km of each other. Manhattan has 900 square kilometers of exploration land concessions around the TG-1 deposit. It is my opinion that they are only beginning to unlock the value withheld in this area. From the company, "the rate of discovery is unprecedented", and "there are no other districts in the world where such large deposits occur within such close proximity". The TG-3 Resources show the possibility of 2.1M ounces of Gold, 65.9M ounces of Silver, 820,000 tons of Copper, and a further 1.14M tons of Zinc. The size of this resource base continues to expand. With just the TG-1 and the TG-3 deposits, the potential is there for over 3M ounces of Gold, upwards of 120M ounces of Silver, 1.77M tones of Copper, and of course 1.73M tones of Zinc. After only 10 holes at the B-5 deposit, a high grade copper deposit has become apparent. One hole intersected 4.6% Copper and 17.7g/ton of Silver. With further capital availability, I can see a truly world class mine taking shape here. The economic analysis has been completed as of Sept 2002. The mining projects undiscounted project cash flow of US $220 Million. The internal rate of return is 21.6% over a 12 year life span. The Net Present Value of the project is $118.3 Million using a discount rate of 5%. The valuations are based on $320 Gold, $5 Silver, $0.90 Copper, and $0.45 Zinc prices. After 3 _ years the production will switch to primarily Copper and Zinc. The Gold and Silver are going to be used to fund the company through the start up phases. Effectively, an investor will have the opportunity to realize a copper deposit worth upwards of $1.56 Billion debt free. This doesn't even account for the zinc deposit, or the deposits at TG-3 and B-5. The above gives you a feel for what this company has hiding under the hood. Let's take a look at current share values. There are about 45.4 Million shares outstanding. Here is the chart: Firstly, you can see last year after a realization of the true value of this company, the stock was hammered because of the protest at the mine site. This took it down to very convenient accumulation levels. This train is heading out of town, so now is the time to accumulate it accordingly. Just reaching its' old highs would put it up 100% from current levels. It is currently, at the lower end of its' trading range from the end of the bear market in precious metals in 2001. The upper end of this range is 1.40 or about 40% from current levels. The Net Present Value of this project equates to a share price of $3.03 US or C$ 4.66. It is my opinion that as the resources are explored and developed in the future, that this stock will significantly pass the old price levels from the daily chart. The stock will then go on to attempt a run at the old highs from the following monthly chart: This article is written as an informational document only. I have no ties to this company other than I own a position in this stock. You will need to complete your own due diligence accordingly. The very complete website is: http://www.manhattan-min.com/s/Home.asp Frank A Lechner Questions or Comments? Fire Away At: whynotgold@msn.com Frank Lechner is an independent business owner and investor who has studied the markets over the past 20 years, dating to the last major bull run in precious metal investments. We had a mini bull market in the early 90's and he believes we are currently in the early stages of a bull market equivalent to the late 70's and early 80's. This is not meant as investment advice. This is only an opinion. Past performance is no guarantee of future results. ________________ 321gold Inc Miami USA