SOURCE: La Mancha Resources Inc.

La Mancha Resources

November 22, 2010 09:35 ET

First Half of Frog Leg's Delineation Program Adds 180,000 Ounces of Gold to the Mine's M&I Resources

PARIS--(Marketwire - November 22, 2010) - La Mancha Resources Inc. (TSX: LMA)

RESOURCE INCREASE HIGHLIGHTS:

--  First half of the exploration program already adds 180,000 ounces of
    gold (91,800 ounces attributable to La Mancha) to M&I resources,
    substantially more than the 150,000 ounces targeted for the entire
    program
--  Drill results suggest mineralization remains thick at depth while
    resource remains open at the limit of current drilling
--  Management expects further resource growth on completion of the three
    remaining drill platforms

HIGHLIGHTS OF PRELIMINARY DRILL RESULTS:

--  Preliminary results from second half of drilling campaign returns more
    high-grade intercepts, including:
    --  13.5m @ 8.58 g/t Au with true thickness of 12.3m
    --  14.5m @ 7.00 g/t Au with true thickness of 12.1m
    --  16.0m @ 7.14 g/t Au with true thickness of 9.9m
    --  16.57m @ 6.31 g/t Au with true thickness of 9.7m
--  Results indicate that new zones are more highly prospective than those
    previously drilled

La Mancha Resources Inc. (TSX: LMA) (hereinafter "La Mancha" or "the Company") is pleased to report that the ongoing resource delineation program at its 51%-owned Frog's Leg underground mine in Western Australia has already significantly surpassed its objective, with more than half of the drilling yet to be factored in. As of September 30, 2010, the Frog's Leg Measured and Indicated resource amounted to 866,000 ounces of gold (441,660 ounces attributable to La Mancha), of which 180,000 ounces (91,800 ounces attributable to La Mancha) are the direct result of the successful exploration conducted below the first two drill stations installed at the bottom of the mine. (See Figure 1 of appendix)

Dominique Delorme, President and CEO of La Mancha, noted: "We are thrilled with the Frog's Leg resource delineation program to date for the following reasons. First, the objective for the entire program was to add 150,000 ounces of gold to the Frog's Leg resource. With only 45% of the drill results modelled to date, we have already exceeded that objective. Second, the drill results received from the second segment of the program continue to return very interesting intercepts, suggesting that the Frog's Leg resource will continue to grow in the mine's year-end resource report. However, the most interesting potential identified to date by our resource delineation program is the suggestion of the continued thickness of the Frog's Leg mineralization and the presence of more high grades intercepts at depth. Should they be confirmed, these two characteristics bode well for the future of the Frog's Leg deposit as it suggests a continued resource increase. All these reasons, reaffirm the robust nature of the Frog's Leg deposit, making us even more confident of further extending the Frog's Leg's mine life by developing the mine well beyond the current resource envelope."

The aforementioned extensive underground resource drilling program, aimed at testing the continuity of the Frog's Leg deposit at depth, started in early 2010. The program involves 35,000 metres of diamond drilling across the entire 1,200-metre strike length of the deposit. Management anticipates that this drilling has the potential to extend the mine depth by another 180 metres, and further development of the mine below the 600-metre level looks probable. The resource extension drilling is being done from five main drill platforms, as illustrated in Figure 1 of the appendix.

To date, drilling has been completed from the first four drill stations installed at the bottom of the mine. The new resource statement is, however, only based on the modeling of the drill results from the first two drill stations, which corresponds to a total of 15,813 metres drilled, representing a mere 45% of the total resource drilling program. As shown in Table 1 of the appendix, the new resource statement includes the drill results published on August 3 as well as the newly-obtained results.

As illustrated in Figure 1, the resource increase is a result of new discovery and conversion of areas of Inferred material contained within the April 2009 Resource Statement. To date, the exploration program has added 180,000 ounces (91,800 ounces attributable to La Mancha) to the Frog's Leg Measured and Indicated resource, in addition to the 60,000 ounces (30,600 attributable to La Mancha) already identified in the December 31, 2009 resource statement.

The following table shows the new Frog's Leg project resource estimate on a 100% basis:


Table 1: Comparative Resource Statement

                         As of December 31, 2009   As of September 30, 2010
                        -------------------------- ------------------------
                                  Grade   Ounces             Grade  Ounces
                         Tonnes   (g/t)    (oz)     Tonnes   (g/t)   (oz)
                        --------- ------ --------- --------- ------ -------
Resource Base
Already Defined Resource
 Measured                 492,000    7.6   121,000 1,002,000    8.2 265,000
 Indicated              3,240,000    6.7   696,000 1,865,000    6.0 361,000
 Total M&I              3,732,000    6.8   817,000 2,929,000    6.6 626,000
 Inferred                 143,000    7.1    32,500    94,000    5.6  17,000
                        --------- ------ --------- --------- ------ -------
Resource Extension
 Measured                  23,000    5.4     4,000   116,000    9.7  36,000
 Indicated                304,000    5.7    56,000 1,119,000    5.7 204,000
 Total M&I                327,000    5.7    60,000 1,235,000    6.0 240,000
 Inferred               1,143,000    5.0   183,000   490,000    4.6  72,000
                        --------- ------ --------- --------- ------ -------
Total Resource
 Measured                 515,000    7.5   125,000 1,118,000    7.9 301,000
 Indicated              3,544,000    6.6   752,000 2,984,000    5.9 565,000
 Total M&I              4,059,000    6.7   877,000 4,164,000    6.5 866,000
 Inferred               1,286,000    5.2   215,500   584,000    4.7  89,000
                        --------- ------ --------- --------- ------ -------

Reported resource figures were calculated using an Au cutoff grade of
3.0 g/t, consistent with the resource estimates reported in the 
December 2009 End of Year Statement.

The project's Measured and Indicated resource now stands at 866,000 ounces of gold (441,660 oz attributable to La Mancha) after nearly three years of sustained mining activity.

Based on the historical conversion of resources to reserves, it is anticipated that this interim resource increase will result in a one-year extension of the current mine life. In 2010, more areas of ore development have opened up with dual parallel drives, while the number of stoping fronts has increased and a crown pillar has been established for mine stability.

Results to date indicate that there is potential well beyond the current resource as the extensions and growth areas display geology and grade consistent with what is seen in previous orebody modelling. Figure 2 of the appendix indicates a 10-m wide (true thickness) intercept some 200 metres below the current mine plan, indicating an increase in true width at the lowest point of drill information. This is more than the current average thickness seen in the Mist-Rocket Lode. This result demonstrates the robust nature of the Frog's Leg deposit and the potential for further development of the mine below the 600-metre level. Drilling to further assess this potential is planned in 2011.

The impact of the resource extension on mining method will be fully evaluated during the reserve modelling process once the next resource update is complete.

PRELIMINARY DRILL RESULTS FOR THE SECOND PORTION OF THE CAMPAIGN

As previously mentioned, the drilling program continued from the remaining three drill stations at the bottom of the mine. Drilling at stations 3 and 4 started in July and was completed in early November, with 15,000 metres drilled. A further 5,000 metres is planned and will be drilled on the fifth extension zone before the end of the year.

The preliminary drill intercepts reported today come from only 15% of the drill core from stations 3 and 4. These results are shown in Table 1 of the appendix. The intercepts are characteristic of the widths and grades already seen around the current Indicated boundary.

Jean-Jacques Kachrillo, VP Exploration of La Mancha, noted that: "It is important to highlight the significance of these initial drill results as it confirms our belief that the zones currently being drilled are more highly prospective than the areas drilled previously. The drill holes reported here have returned significant grade intersections, confirming the continuity of the mineralization. Furthermore, drill results suggest that the mineralization remains thick at depth, under drill stations 3 and 4, as suggested from the results at the end of this press release. We are particularly excited about the three drill results received from station 4, as they all show grades above 6.3 g/t Au over a length of at least 14 metres, with impressive true thicknesses of 9.7 to 12.1 metres. This continuity of the mineralization and its continued thickness bodes well, as it indicates that the Frog's Leg deposit could continue to significantly grow. "

NEXT STEPS

All resource extension drilling from the remaining fifth drill station is on track to be completed by year-end. Resource modeling for the last three stations is scheduled for completion in early 2011 and should be included in the year-end resource update. A new reserve and life-of-mine plan will be developed following completion of the new resource statement in 2011.

In light of the program's recent exploration success, five deep exploration holes are budgeted for 2011, targeting mine extensions identified in the resource model from the 2010 extension drilling program.

ABOUT LA MANCHA AND FROG'S LEG

La Mancha is an international gold producer based in Canada with operations, development projects and exploration activities in Africa, Australia and Argentina. La Mancha's shares trade on the Toronto (TSX) under the symbol "LMA". For more information on the Company, please visit its website at http://www.lamancha.ca.

QUALITY CONTROL

The updated resource review and estimation conform to the requirements of NI 43-101 and CIM Best Practices for Estimation of Mineral Resources. There are numerous uncertainties inherent in estimating mineral reserves, including many factors beyond the Company's control. Resource estimation is a subjective process, and the accuracy of any resource estimate is a function of the quality of available data and engineering and geological interpretation and judgment. Results from drilling, testing and production, as well as material changes in metal prices subsequent to the date of an estimate may justify revision of such estimates. To the best of La Mancha's knowledge, at the time of estimation there were no known environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant issues that would materially impact on the eventual extraction of the mineral resources.

The drilling program was carried out by, and under the supervision of, Trevor Eddie B.Sc. (Geol.) MAusIMM, Geology Manager of La Mancha Australia. The program was conducted in accordance with industry best practice standards.

La Mancha has established an Analytical Quality Assurance Program to control and assure the analytical quality of assays in its gold exploration. This program includes the systematic addition of blank samples and internal material references ("standards") to each batch of samples sent for analysis. Blank samples are used to check for possible contamination in laboratory, while standards determine the analytical accuracy. All samples are half NQ diamond drill core sampled based on geological intervals.. Samples utilized for the resource update comprise half NQ2 diamond drill core. Samples were assayed at SGS Australia, Kalgoorlie, using a 50 g fire assay, followed by solvent extraction and flame AAS.

The Frog's Leg geological re-interpretation was completed by La Mancha Australia staff under the supervision of Trevor Eddie, and the block model, including the building of the wireframes for the model, resource estimation and classification was undertaken Trevor Eddie B.Sc. (Geol.) MAusIMM, Geology Manager, also of La Mancha Australia. Mr. Eddie has sufficient experience in the resources calculation, the style of mineralization and type of deposit to qualify as a Qualified Person as defined in the 2005 Edition of "National Instruments 43-101, Standards of Disclosure for Mineral Projects". Based on his information, Mr. Eddie has consented to the content of this press release in the form and context in which it appears. He has read National Instrument 43-101 of the Canadian Securities Administrators ("NI 43-101") and has ensured that this press release has been written in compliance with the Instrument.

FORWARD-LOOKING STATEMENTS

This press release contains certain "forward-looking statements", including, but not limited to, the statements regarding the quantity of mineralization in place, particularly in numbers of ounces of gold, the mineable character of the drill results, mining exploration risks, estimation and evolution of mineral resources, potential for resources additions (in particular the possibility of converting a portion of the resources into proven and probable reserves), statements regarding extending mine life and at-depth mining, future work programs and objectives associated therewith, drilling targets and anticipated results, statements regarding the prospective level of the three remaining drill stations, interpretation of work results and anticipated timetables. Forward-looking statements express, as at the date of this press release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with fluctuations in the market price of precious metals, mining industry risks, risks associated with foreign operations, environmental risks and hazards, uncertainty as to calculation of mineral reserves and other risks referred to in La Mancha's 2009 Annual Information Form filed with the Securities Commissions of all provinces in Canada, as well as the Toronto Stock Exchange.

The complete press release can be downloaded from the following link: https://irdirect.companynewsgroup.com/documents/PJ/CO/2010/171715_88_GKBN_11-22-September-2010-Resource-Update-Vf.pdf

Contact Information

  • For additional information, please contact:
    La Mancha
    Martin Amyot
    Vice President Corporate Development
    Tel: (514) 987-5115, Ext. 25
    Tel: 33 (0)1 47 96 48 94
    Email: info@lamancha.ca

    Nicole Blanchard
    Investor Relations
    Tel: (514) 987-5115 Ext. 26
    Email: nblanchard@lamancha.ca