SOURCE: La Mancha Resources

January 18, 2011 07:43 ET

La Mancha Achieves Record Gold Production in 2010 and Targets up to 135,000 Oz in 2011

PARIS--(Marketwire - January 18, 2011) -


--  Record gold production of 122,571 ounces in 2010
--  Gold production target of up to 135,000 ounces for 2011
--  Average cash costs expected to be US $671 per ounce of gold
--  Favourable conditions in the vicinity of the Ity mine allow for the
    gradual resumption of operations

La Mancha Resources Inc. (TSX: LMA) (hereinafter "La Mancha" or the "Company") is pleased to announce that, in line with its production guidance, its consolidated gold production for 2010 reached a record 122,571 ounces, compared to 94,570 ounces of gold for 2009. This 30% increase is due to the steady production ramp-up at the Frog's Leg mine in Australia, along with the successful start-up of the Company's fourth mine, White Foil, which more than compensated for slightly lower African production. In 2010, 64% of La Mancha's total gold production came from its Australian operations.

La Mancha expects to increase consolidated production by up to 10% in 2011. Total production is expected to be in the range of 115,000 to 135,000 attributable ounces at an estimated average cash cost of US $671/oz.

The breakdown of La Mancha's attributable production is as follows:

Table 1

----------------------- -------- -------- -------- -------- ---------------
Attributable Production
 (in oz)                 2007A    2008A    2009A    2010A       2011 E
----------------------- -------- -------- -------- -------- ---------------
Australian mines
----------------------- -------- -------- -------- -------- ---------------
  Frog's Leg
   (51%-owned)                 -   15,375   46,120   66,444   65,000-70,000
----------------------- -------- -------- -------- -------- ---------------
  White Foil
   (100%-owned)                -    1,910        -   11,713   14,000-17,000
----------------------- -------- -------- -------- -------- ---------------
African mines
----------------------- -------- -------- -------- -------- ---------------
  Hassaï (40%-owned)      34,760   29,270   24,715   27,374   24,000-28,000
----------------------- -------- -------- -------- -------- ---------------
  Ity (45.9%-owned)       19,140   24,995   23,735   17,040   12,000-20,000
----------------------- -------- -------- -------- -------- ---------------
Total                     53,900   71,550   94,570  122,571 115,000-135,000
----------------------- -------- -------- -------- -------- ---------------

As shown in the table above, La Mancha's gold production more than doubled between 2007 and 2010 due to the start-up of its two Australian mines.

Dominique Delorme, President and CEO of La Mancha, stated: "Thanks to the successful start of our fourth mine, strong year-over-year production growth and promising exploration results, 2010 marked the successful completion of the aggressive value creation strategies formulated when La Mancha was formed in 2006. In 2011, we will continue to deliver sustained production growth, as we embark on La Mancha's second expansionary phase with our VMS project at Hassaï. Having quickly surpassed the 120,000-ounce-per-year mark, we now expect our rapidly-developing flagship VMS project in Sudan and fast-growing resource base in Australia to continue to boost production over the 200,000-ounce mark by the end of 2013."

La Mancha produced 30,744 attributable ounces of gold in the fourth quarter ended December 31, 2010, a 30% increase over the 23,683 attributable ounces of gold produced in the corresponding period of 2009.


In line with the upgraded mine plan and increased milling capacity, the Frog's Leg mine continued to rapidly ramp-up production, generating 66,444 ounces of gold net to La Mancha in 2010 compared to 46,120 ounces in 2009.

As shown in the table below, underground mining activities continued to improve in 2010, with tonnage and gold grades increasing by 11% and 17% respectively year over year. It should be noted that underground gold grades mined during the fourth quarter of 2010 averaged a record 6.35 g/t Au.

Table 2

--------------------- ----------------- ----------------- -----------------
(on a 51% basis)            2009A             2010A            2011 E
--------------------- ----------------- ----------------- -----------------
Underground tonnage
 mined (t)                      311,219           344,153 300,000 - 340,000
--------------------- ----------------- ----------------- -----------------
Gold grade (g/t Au)                4.73              5.52              5.91
--------------------- ----------------- ----------------- -----------------
Gold content (oz)                47,297            61,077   57,000 - 64,600
--------------------- ----------------- ----------------- -----------------

As shown in the table above, the Frog's Leg mine performance should remain strong while gold grades are expected to further increase in 2011.

La Mancha expects to increase its current 500,000-tonne toll capacity to 650,000-tonnes for 2011. Such agreement is in the final stages of negotiation with the nearby Greenfields treatment plant owners. This upgraded toll milling agreement will be used in priority for high-grade Frog's Leg ore with White Foil making up the remainder. With 33,000 tonnes of high-grade ore stockpiled at 2010 year end, at 6.37 g/t Au (containing 6,800 ounces) to be processed in January 2011, La Mancha expects its share of Frog's Leg mine production to be in the range of 65,000 to 70,000 ounces of gold at an estimated cash cost of US $617 per ounce.

In the fourth quarter of 2010, the Frog's Leg mine generated 18,079 ounces of gold net to La Mancha, compared to 11,611 ounces in the same quarter of 2009. Fourth-quarter 2010 production was negatively impacted by a high-grade ore handling restriction at the Greenfields plant, which obliged La Mancha to feed lower-grade stockpiled ore rather than high-grade material mined during the period.

The 100%-owned White Foil mine, inaugurated in April 2010, became La Mancha's fourth producing asset and second mine to be put to production in less than two years. For its first year of operation, the mine produced 11,713 ounces of gold from ore at a grade that was slightly below expectations.

In accordance with the toll-mining plan, 282,104 tonnes were mined between March and August 2010, thereby successfully concluding the first bench mining operation. At year-end, the White Foil stockpile stood at 108,998 tonnes grading 1.94 g/t Au.

Production at the White Foil mine is expected to be in the range of 14,000 to 17,000 ounces of gold in 2011 at an estimated cash cost of US $1,082 per ounce. La Mancha expects in Q2 to tender a mining contract for the second bench of the pit, representing approximately 310,000 tonnes of ore at an average grade of 2.0 g/t Au. As in 2010, excess mill capacity at the nearby Greenfield plant is expected to be filled with White Foil ore.

In the fourth quarter of 2010, production for the White Foil mine was 2,525 ounces of gold, as the above-mentioned high-grade ore handling restriction at the Greenfields plant allowed 46,600 tonnes of White Foil ore to be processed.


In line with expectations, the Hassaï mine produced a total of 68,434 ounces of gold in 2010 (27,374 ounces attributable to La Mancha) compared to 61,790 ounces of gold in 2009 (24,715 ounces attributable to La Mancha). This production increase is notably due to the increased mill throughput following successful optimization of the quartz processing circuit.

No major change in production is expected at the Hassaï mine until the first phase of the volcanogenic massive sulfide (VMS) project is commissioned in 2013. Consequently, Hassaï's production is expected to range between 60,000 and 70,000 ounces of gold (24,000 to 28,000 ounces attributable to La Mancha) in 2011 at an estimated cash cost of US $660 per ounce.

In the fourth quarter of 2010, production at the Hassaï mine was 15,148 ounces of gold (6,059 ounces attributable to La Mancha) compared to 17,475 ounces (6,990 ounces attributable to La Mancha) in the corresponding quarter of 2009.

The Ity mine produced a total of 37,125 ounces of gold in 2010 (17,040 ounces attributable to La Mancha), compared to 51,710 ounces in 2009 (23,735 ounces attributable to La Mancha). Ity's operations were affected by a number of negative factors over the course of 2010.

Most of the 2010 production shortfall was due to the scheduled construction of the new leaching pads and the related one month suspension of milling activities due to the plant's relocation, the several month plant commissioning period, along with the extensive downtime caused by unusual amounts of heavy precipitation during the period of July to October.

Furthermore, the forced temporary interruption of the mine's activities on December 17, 2010, due to the agitation surrounding the country's uncertain political future impaired the results of a quarter that was on track to being the mine's best quarter of the year. The situation in the Zouan Hounien area, where the mine is located, has since stabilized, allowing mining activities to gradually resume over the past few days. As a result, the operation could reach normal capacity by the end of January, subject to ongoing delivery of mine supplies.

Due to the higher capacity of the mine's recently-commissioned leaching pads, Ity could increase production to up to 52,290 ounces of gold in 2011 (24,000 ounces attributable to La Mancha). However, Ity's 2011 performance remains vulnerable to the country's political situation, changing security conditions around the mine and difficulties securing access to mine supplies. Consequently, the Company is issuing a production guidance of 26,140 to 43,570 ounces of gold (12,000 to 20,000 ounces attributable to La Mancha) for 2011 at an estimated cash cost of US $519 per ounce.

Due to the aforementioned temporary mine shutdown, fourth quarter production at the Ity mine was 8,892 ounces of gold (4,081 ounces attributable to La Mancha) in 2010 compared to 11,615 ounces of gold (5,328 ounces attributable to La Mancha) in 2009.


Investor Relations Calendar

La Mancha will be attending the Africa Mining Congress in Livingstone, Zambia from February 3 to 5 and Mining Indaba in Capetown, South Africa from February 6 to 8. Management of La Mancha is available to meet with investors at both events. The company will also be presenting at the BMO Capital Markets 2010 Global Metals & Mining Conference, held from February 28th until March 3rd in Hollywood, Florida.


La Mancha Resources Inc. 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 Stock Exchange (TSX) under the symbol "LMA." For more information, visit the Company's website at


This press release contains certain "forward-looking statements", including, but not limited to, the statements regarding the Company's strategic plans, future commercial production and its related production and cash costs targets, its ability to increase its resources and its associated timetable, statements regarding development plans for the Company's VMS project along with statements regarding the project's economic viability, profitability, its ability to reach commercial production, associated development schedule, and its impact on the Company's global production; statements regarding the progression of Frog's Leg and the Company's view on higher mined gold grades in 2011, statements regarding the Company's ability to toll-treat the mined ore at the Greenfields plant along with the Company's ability to upgrade its current toll-milling agreement; statements regarding the positive impact of the new leaching pads at the Ity mine and its ability to increase future production; statements regarding the Company's ability to operate the Ity mine at normal capacity. 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, exploration risks, risks associated, with upcoming development with respect to Côte d'Ivoire's political future and stability, with foreign operations, environmental risks and hazards, uncertainty as to calculation of mineral reserves, requirement of additional financing or additional permits, authorizations or licenses, risks of delays in construction and production and other risks referred to in La Mancha's 2009 Annual Information Form filed with the Securities Commissions, as well as the Toronto Stock Exchange.

Please see attached table.

Contact Information

  • For additional information, please contact:
    La Mancha Resources Inc.
    Martin Amyot
    Vice President Corporate Development
    Tel: (514) 987-5115 ext 25
    Email: Email Contact

    Nicole Blanchard
    Investor Relations
    (514) 961-0229
    Email Contact