Kryso Resources PLC (London:KYS): New Recommendation / June 10, 2009

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ON THE ROAD TO PRODUCING 100,000 OUNCES OF GOLD IN CENTRAL ASIA

Business Summary

Kryso is an emerging mineral exploration company that is principally focused on exploring the gold and other precious and base metal 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 Company's executive directors have a proven track record of operating in Tajikistan and they believe that Kryso Resources was the first foreign company to obtain a 100% interest in a mining and exploration project in the country.

In 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 Company is in the process of conducting 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.

In June 2006 the Company was awarded an Exploration Licence for the Hukas Nickel-Copper deposit. During 2007 the Company carried out a TEM geophysical survey that identified several anomalies including a shallow conductor, over a kilometer in length, which the Company started drilling in the second quarter of 2008.

Projects

Tajikistan is one of the weakest economies in Central Asia.

Cotton production is the core of agriculture in Tajikistan and accounts for a large proportion of exports. Tajikistan exports mainly raw materials, and the Tajik Aluminum Plant provides about 55% of exports. Because of Tajikistan's mountainous terrain, rail transport is not highly developed and trucking by road is the most popular form of transport in the country.

Tajikistan has identified and explored more than 400 mineral deposits and produces and processes ores of lead, zinc, bismuth, antimony, mercury, tungsten, molybdenum and gold, as well as rare metal ores.

Brown coal is produced at Shurab in the Leninabad region, oil in the northern and southern regions, and natural gas in Gissar and the Vakhsh Valley.The country's GDP grew by 10% in 2003 with output of hard coal increasing by 39% to 31,200 t, brown-coal increased by 70% to 15,200 t.

Tajikistan is currently not a major producer of minerals and metals. However, the country has large mineral resources, in particular antimony, gold, lead, zinc and coal. Currently, antimony is the only mineral mined in any great quantity.

Several foreign investors are active in the country, primarily in the gold sector. The largest foreign investors are companies from Canada, the US, the UK, Korea, Germany, Switzerland, Italy, Hungary and Russia.

Pakrut Gold Deposit

Geology and Mineralization

The Soviet interpretation of the geology and resources (see map below) was based on surface trenches, cut data and underground sampling from the cross-cuts and drives. There was little information between these two sets of data apart from a few drill holes.

The Company's drilling program has assisted Kryso's Chief Geologist to review all the previous work and develop a revised geological and structural interpretation of the deposit. Rather than a single ore zone, the orebody is now interpreted as being made up of a series of sub-parallel, pinching and swelling, mineralized zones within the metasomatite (a rock that has been subjected to injections of chemically active hydrothermal solutions). Gold mineralization is mostly, but not exclusively, confined to the metasomatically altered zones that occur within the schist host rocks. The drilling to date appears to confirm this revised theory.

Drilling highlights to date include:

• 123m @ 6.16g/t
• 42m @ 11.17g/t
• 50m @ 5.67g/t
• 41.4m @ 4.08g/t
• 30m @ 13.32g/t
• 6.5m @ 37.97g/t

These results support the interpreted trend of the mineralization at Pakrut, which is still open at depth, to the east and to the north. Below the adit level, the dip of the mineralized zone has appeared to steepen to vertical to then to dip in the opposite direction, as in the shape of a bow. This has resulted in the mineralization trending into new areas that were not tested before. Kryso has already begun drilling in these areas immediately below the adit level and, during 2008/2009, it is planned to drill the lower southern and eastern extensions to the Pakrut mineralization from both surface and underground.

The metasomatised zones shown are drawn from Soviet trench data and underground mapping together with information from completed Kryso drill holes. Mineralization is mostly, but not always, confined to the metasomatically altered zones; not all of the metasomatite is mineralised.

By the beginning of 2008, over 12,000m of drilling had been completed (80 diamond drill holes), over 1,500m of the original adit have been refurbished, over 600m of underground development have been excavated, and over 19,000 samples have been prepared and analyzed in the Company's laboratories in Dushanbe. To date nearly 5,000 of these samples have been sent to South Africa and fire assayed at SGS Lakefield, the Company's independent assay laboratory.

Metallurgical Testwork

Initial metallurgical testwork was carried out by Tajik Geology with reported recoveries, using rudimentary gravity recovery methods, ranging from 47% of the gold to 98%. Consistently high recoveries above 80% and mostly above 90% were attained using a combination of gravity extraction and cyanidation methods.

Currently SGS Lakefield, under the auspices of GeoLogix, is carrying out metallurgical test work on samples submitted by Kryso.

Eastern Pakrut

Introduction

The Eastern Pakrut gold prospect is 3.5 km east of the Pakrut gold deposit and on the north side of the Pakrut Anticline and Pakrut River. It consists of schistose lithologies, which have been altered by gold-bearing carbonate-quartz-albite alteration.

Mineralization

The mineralization at Eastern Pakrut has been traced on surface in an east-west direction for a distance of 300 meters and has a thickness ranging from 1 m to 3 m with reported gold grades ranging from 1.11 g/t to 20 g/t. Adit 4 was developed at a depth of 120 m below the surface outcrop and did not intersect any mineralization that could be associated with that identified on the surface.

Resource

Estimates of the tonnage and grade of mineralization at Eastern Pakrut have been classified using the Russian system and are not compliant with the guidelines laid down by the JORC Code.

Sulfidnoye

Introduction

The Sulfidnoye gold and silver prospect, discovered in 1952 by Tajik Geology, is located 5 km to the north-northwest of the Pakrut gold deposit. It was named 'sulfidnoye' after sulphide minerals were collected in trench samples from two quartz-sulphide lenses in its eastern part. The mineralization can be subdivided into western, central and eastern sections. Sulfidnoye lies on the western side of the Sardi-Mienna River valley in the Hissaro-Karategin fault zone.

Mineralization

Gold mineralization is associated with quartz veins and shear zones striking east-west and hosted in metasomatically altered schists. The thickness of the alteration zone ranges from 0.5 m to 21 m with gold grades ranging from less than 1 g/t to 17.5 g/t and silver grades up to 264 g/t. The strike extension of this zone has not been traced because of the thick overburden, but it could be up to 1.5 km.

The mineralization has been sampled in trenches and cuttings. The western part contains antimony and gold and has gold grades ranging from 0.2 g/t to 0.8 g/t. The central and eastern parts have gold grades that range from 0.2 g/t to 2.8 g/t; lead grades range from 0.2% to 2.3% and silver grades from 28 g/t to 264 g/t.

Resources

Estimates of the tonnage and grade of mineralization at Sulfidnoye have been classified using the Russian system and are not compliant with the guidelines laid down by the JORC Code.

Rufigar

Introduction

The Rufigar prospects are located on the southeastern side of the Kaltakul River 5 km to north of the Pakrut gold deposit. The Rufigar mineralization is a series of gold occurrences concentrated in a 5km section of the Rufigarsky fault zone. This mineralization can be sub-divided into four main occurrences: Central, Eastern, Upper and Surmyanoye (antimony and gold).

Mineralization

The mineralization at Central Rufigar occurs within four small alteration zones and has gold grades from trench samples ranging from 0.6g/t to 22.0g/t. The thickness of these zones ranges from several centimeters to several dozen meters with a strike length of between 15m and 45m.

At Eastern Rufigar, the mineralization has been sub-divided into a northern and southern zone. The gold mineralization is associated with zones of limonite in altered schist and granitoids. An adit, Rufigar Adit 1, failed to intersect the mineralization which suggested limited vertical development of the mineralization.

Resources

P2 and P3 resource estimates have been prepared by Tajik Geology for the Rufigar gold mineralization. However, as there is no JORC equivalent for Russian P2 and P3 resources, the directors of Kryso believe it to be prudent not to present these figures at this stage.

Gishun Licence Area: The Hukas Ni-Cu-Co-PGM Project

Introduction

The Hukas project is located in the Darvaz area of the Mountainous Badhshan Autonomous region (Central Tajikistan) of the Republic of Tajikistan. The project area is connected to the capital city of Dushanbe by a 15km-unpaved road, followed by 311km tarmac road via the city of Kulyab.

In 2005, the potential for nickel, copper, cobalt and PGM (platinum-group-elements) mineralization in the Republic of Tajikistan was brought to the attention of the Company. The Company subsequently identified an area that had been discovered during the Soviet era, which had favourable host geology and structure for the presence of nickel-copper sulphide mineralization. The Company has since been granted an exploration licence for this area known as the Gishun Licence Area.

Mineralization and Previous Exploration

It is planned to carry out 1500m of diamond core drilling on targets identified by the geophysical survey beginning in June 2008.

Depending on the results of this drilling, a further ground-based electromagnetic geophysical survey will be carried out on the rest of the Company's Gishun exploration area.

Recent News: DJ Kryso Sees Increase In Pakrut Resource Estimate

Kryso Resources PLC, a mineral exploration and development company with gold and nickel-copper projects in Tajikistan, said current drilling at its Pakrut gold project is expected to enable an increased resource estimate later in the year.

MAIN FACTS:

• Mineralization from a virtually unexplored ore zone known as Ore Zone 6 intersected over 30 meters.

• Pakrut bankable feasibility study based on a mining operation producing in excess of 100,000oz Au per annum targeted for completion before end of 2009.

• Two diamond drill rigs currently working at Pakrut; additional diamond rig and reverse circulation rig expected to be operational within next four weeks.

• Additional drilling to take place later in the year will target Ore Zone 6, as well as areas to east and north of the Pakrut deposit.

Fundamental Considerations

TOTAL RESOURCES IN ALL CATEGORIES PRESENTLY STAND AT 1.74 MILLION OUNCES OF GOLD. THE MARKET CAPITALIZATION PER OUNCE OF GOLD IS LESS THAN $ 6 PER OUNCE.

Bankable feasibility study coming up to completion, targeting 100,000 oz per year production.

THE BANKABLE FEASIBILITY STUDY TO BE COMPLTED IN 2009 FORESEES AN ANNUAL PRODUCTION OF 100,000 OUNCES OF GOLD AT AN OPERATING COST OF LESS THAN $ 350 PER OUNCE.

ASSUMUNG THE REQUIRED FINANCING CAN BE OBTAINED AND CONSTRUCTION OF THE PRODCUTION FACILITIES COMPLETED DURING 2010/11, THE PRESENT MARKET CAPITALIZATION WOULD BE LESS THAN 100 TIMES ANNUAL PRODUCTION.

CONSIDERING THAT SMALL AND MID-SIZED COMPANIES THAT ARE IN PRODUCTION, USUALLY HAVE A MARKET CAPITALISATION OF 1,000 TO 5,00O TIMES THE VOLUME OF ANNUALLY PRODUCED OUNCES, IT IS EASILY DEMONSTRATED THAT THE SHARE PRICE OF KRYSO WOULD HAVE TO INCREASE SUBSTANTIALLY IN ORDER TO APROACH NORMAL INTERNATIONAL VALUATIONS.

AS MENTIONED IN THE PREVIOUS SECTION, A THIRD DIAMOND DRILL RIG WILL BECOME OPERATIONAL WITHIN A FEW WEEKS, AS KRYSO FOCUSES ON DEFINING FURTHER RECOURCES, WHICH WILL ENSURE CONTINUITY OF CURRENT PRODUCTION LEVELS WELL INTO THE FUTURE.

Technical Considerations

Disclosure:
The author has not been paid to write this article, nor has he received any other inducement to do so.

Disclaimer:
The author's objective in writing this article is to invoke an interest on the part of potential investors in this stock to the point where they are encouraged to conduct their own further diligent research. Neither the information nor the opinions expressed should be construed as a solicitation to buy or sell this stock.

Investors are recommended to obtain the advice of a qualified investment advisor before entering into any transactions in the stock - or use their own brains.

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