La Mancha Achieves Record Gold Production in 2010 and Targets up to 135,000 Oz in 2011
PARIS -- (Marketwire) -- 01/18/11 --
HIGHLIGHTS
Highlights: Gold Production Statistics
-- 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.
AUSTRALIAN OPERATIONS
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.
AFRICAN OPERATIONS
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.
CORPORATE EVENTS
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.
ABOUT LA MANCHA RESOURCES INC.:
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 http://www.lamancha.ca/.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
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.
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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