The Frog's Leg Mine Drives La Mancha's Year-End Resource Higher in 2010 While the VMS Project Is the Focus for 2011
PARIS -- (Marketwire) -- 03/29/11 -- La Mancha Resources Inc. (TSX: LMA)
All amounts are in CAD dollars, unless otherwise indicated.
HIGHLIGHTS:
- Measured and Indicated resources of 1.94 million oz of gold (as at December 31, 2010)
- Proven and Probable reserves of 612,835 oz of gold (as at December 31, 2010)
- Frog's Leg 2010 underground exploration program generated 348,000 ounces of gold to the mine's resource (177,480 oz attributable to La Mancha)
- Managed exploration budget of $23.0 million in 2011 ($12.2 million attributable to La Mancha)
- 7 rigs and 100,000 metres of drilling expected for the VMS program at the Hassaï mine in 2011
La Mancha Resources Inc. (TSX: LMA) (hereinafter 'La Mancha' or the 'Company') is pleased to report that, at year-end 2010, the Company's Measured and Indicated resources ('M&I resources') stood at 1.94 million oz of gold, higher than a year earlier as the Company was able to delineate more ounces than it mined during the year. In Australia, the Frog's Leg's underground drilling program added 348,000 ounces of gold to the deposit (177,480 ounces of gold attributable to La Mancha), twice as much as initially expected, and a new gold deposit was discovered on the 100% owned Kintore property, 30 km northeast of Frog's Leg. In Sudan, more gold resources were delineated at the Hassaï mine and promising gold/copper targets were identified at the Nuba Mountains property. In Côte d'Ivoire, the Company increased its resources at the Fetekro property substantially and confirmed the geological potential of the Bondoukou property.
Year-end Proven and Probable reserves amounted to 612,835 oz of gold. A full description of La Mancha's mineral reserves and resources is provided in the table at the end of this press release.
The very good results and the promising leads generated in 2010 have prompted La Mancha to plan $23.0 million in exploration programs for 2011 ($12.2 million attributable to La Mancha). More than half of the exploration budget will be allocated to VMS project, for which a scoping study demonstrating strong potential was released in September 2010.
The table below provides a breakdown of this year's main exploration targets:
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Budget
Country Property Target Budget under management attributable
to LMA
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Capitalized Expensed Total
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SBR & quartz
Hassaï - resource
Sudan gold definition $0.9 M $3.6 M $5.4 M $2.8 M
Nuba Grass-roots - $0.9 M
Mountains exploration
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Delineation of
two orebodies
Hassaï - and resource $13.2 M - $13.2 M $5.3 M
VMS definition of a
third target
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Frog's Leg Resource
Australia mine delineation $0.6 M - $3.5 M $3.2 M
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Resource
Park Dam, definition and
Kintore, grass-roots - $2.9 M
Broads Dam exploration
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La Define the main
Argentina Ortiguita target - $0.9 M $0.9 M $0.9 M
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La Mancha's Exploration Budget $14.7 M $8.3 M $23.0 M $12.2 M
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Dominique Delorme, President and CEO of La Mancha, noted that: 'Our exploration programs continue to be an integral part of our organic growth strategy. Given the low geological risk associated with the VMS project, the 100,000 metres of drilling planned for this year should contribute to significantly expanding the resources at our flagship project. As stated in last year's scoping study, our objective is to double our VMS resource before initiating feasibility work; we are confident that this objective could be met before the end of 2011 with the current program. In parallel, we will continue to further define new resources at our Australian properties while keeping our Côte d'Ivoire exploration on stand-by until the political situation stabilizes. It is important to highlight that the advanced state of our projects should allow us to capitalize more than half of the 2011 exploration budget.'
SUDAN EXPLORATION
Following the publication of a positive Preliminary Economic Assessment ('PEA') on September 7, 2010, for La Mancha's Volcanogenic Massive Sulphide ('VMS') project at its 40%-owned Hassaï mine, both gold and VMS exploration programs were launched to further improve the project's economics. The PEA defined two distinct phases of development: Phase 1 is the addition of a carbon-in-leach ('CIL') plant expected to optimize the current gold operation, and Phase 2 involves the construction of a flotation plant to process the VMS ore. In addition to near-mine exploration, the Company also plans to undertake grass-roots exploration in the highly-endowed Arabian-Nubian shield, where its tenements cover 40,000 km².
Hassaï Mine Gold Exploration
The Hassaï property is a mining complex composed of 18 pits with significant remaining gold potential. In 2011, an exploration program focusing on Hadal Awatib North increased the pit's Measured and Indicated resource to 146,300 ounces (58,520 ounces attributable to La Mancha).(1) A new reserve and life-of-mine plan for the Hadal Awatib North pit is currently underway and should be included in the upcoming VMS Phase 1 feasibility study.
In 2011, a further 17,600 metres of exploration drilling are planned to outline more resources at the Hassaï mining complex.
At the 16,000 km(2) Derudeb property (like Hassaï, 40% owned by La Mancha) where a small (34,000 oz) Inferred resource was delineated in the past, an aerial survey is in preparation and will be carried out in the fourth quarter of the year; the geological patterns of this area are identical to those at Hassaï.
Hassaï VMS Exploration
Two pits have already been shown to host VMS deposits, forming the basis of the PEA VMS mining inventory, while at least four more targets are thought to have VMS potential. To further increase the economics of the project, a 12-month, 100,000-metre drilling program was launched on October 10, 2010, with the goal of upgrading the Inferred resource to the Measured and Indicated category, increasing the current resource at the first two targets, and testing the potential of the VMS structure identified at the third target. As of March 17, a total of 30,300 metres had been drilled in 143 holes. Seven rigs are now operating on site.
The preliminary exploration results for the Hassaï South pit ('Target 1'), published on February 1, 2011, confirmed the high probability of both converting the resource currently classified as Inferred to the Measured and Indicated category and significantly growing the resource.
Delineation of Target 2 (Hadal Awatib) is now underway and exploration is starting at Target 3 (Hadayamet).
Nuba Mountains Property
Covering an area of approximately 5,980 km², La Mancha's 70%-owned Nuba Mountains property is located approximately 400 km southeast of Khartoum, in an area interpreted to be the southwestern extension of the highly-prospective Arabian-Nubian Shield, host of La Mancha's 40%-owned Hassaï mine in Sudan and Nevsun Resources' Bisha mine in Eritrea. The main prospect identified on the property has been named Tumluk.
In 2010, initial trenching results from the Tumluk prospect confirmed the high prospectivity of the project area and suggested that the Nuba Mountains project shares several similarities with the Hassaï mine.
In 2011, a 1,000-metre drilling campaign is planned for the Tumluk prospect to test for mineralization. In addition, geophysical surveys are scheduled in other areas of the Nuba Mountains property, with the goal of identifying new VMS-type targets.
AUSTRALIAN EXPLORATION
Frog's Leg Mine
In 2010, an extensive 35,000-metre underground resource drilling program using a 40X40-metre drill grid was conducted across the entire 1,200-metre strike length of the deposit. This exploration program significantly surpassed expectations, outlining a total of 348,000 Measured and Indicated ounces of gold (177,480 ounces attributable to La Mancha),(2) significantly more than the 150,000 ounces (76,500 ounces attributable to La Mancha) originally targeted. The focus in the coming months will be to develop a new reserve and life-of-mine plan to demonstrate the potential to develop the mine down to the level of 600 metres below surface.
The 2011 exploration objective is to test the potential of extension of the resource at depth on a large grid down to 1,000 metres; the neighbouring Kundana and Raleigh underground resources are approaching this depth.
Kalgoorlie Exploration Tenements
La Mancha has interests in an area of approximately 260 km² in the vicinity of Kalgoorlie.
In 2010, exploration activities were focused on the Kintore and Park Dam North projects. At La Mancha's 100%-owned Kintore project, a first drilling program identified an initial Indicated resource of 34,161 ounces of gold and Inferred resource of 39,339 ounces of gold. Drill results for the 51%-owned Park Dam North project are still pending, but encouraging patterns were visible in the core from the deep diamond drill holes.
For 2011, approximately 32,050 metres of drilling are planned on La Mancha's Kalgoorlie exploration properties. At Park Dam North, a target definition program is planned. At the 51%-owned Broads Dam property, drilling is planned to outline an initial resource on the Morley target, which is located immediately south of the Bullant underground mine. Drilling will also be conducted to test possible extensions of the Frog's Leg structure immediately south of the existing resource on the 51% owned Mungari East property.
CÔTE D'IVOIRE EXPLORATION
La Mancha's exploration activities in Côte d'Ivoire have been suspended due to the country's current political situation. However, the Company's long track record of successful operation in the Côte d'Ivoire and the high geological potential of its tenements provide the comfort necessary to resume exploration activities as soon as the political situation improves. A budget of $5.0 million ($4.4 million attributable to La Mancha) has been allocated for the next exploration program, but is presently suspended.
More details will be provided when exploration resumes in Cote d'Ivoire.
ARGENTINA EXPLORATION
In 2010, results from the 300-metre drilling program, on the La Ortiguita property, confirmed the potential of the silicified zone in the east part of the prospect. In 2011, a 2,300-metre drilling campaign is planned to test for mineralization in this area.
The La Ortiguita property is located on the El Indio trend, in proximity to Barrick's giant Pascua-Lama and Veladero deposits. La Mancha is the operator and will own 75% of the prospect by July 15, 2011.
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 (TSX) under the symbol 'LMA'. For more information on the Company, visit its website at 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 exploration activities, development and construction of a CIL plant in Hassaї and its impact on the resources of the property; statements regarding the exploration targets and timetables, exploration budget, the geological potential of our properties, more specifically the VMS potential in Sudan; statements regarding the number of metres to be drilled on each property and timing at which the drilling results will be made available; statements regarding the ability of this program to increase the resources and reserves of our properties. 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 foreign operations, environmental risks and hazards, uncertainty as to calculation of mineral reserves, requirement of additional financing or additional permits, authorizations or licences, 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.
(1) 625,000 MT at 7.27 g/t Au for 146,300 ounces (58,520 attributable to LMA)
(2) Measured and Indicated resources of 1.75 MT at 6.2 g/t Au for 348,000 ounces (177,480 attributable to LMA)
(See Table in Attachment)
MINERAL RESERVES AND RESOURCES
Mineral reserves and resources have been estimated by La Mancha's technical personnel for each property in accordance with definitions and guidelines adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM 'Standards on Mineral Resources and Reserves'). There are numerous uncertainties inherent in estimating proven and probable mineral reserves, including many factors beyond the Company's control. Reserve estimation is a subjective process, and the accuracy of any reserve estimate is a function of the quality of available data and engineering and of 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.
La Mancha qualified persons(1) responsible for the mineral reserve and resource calculations for each mine or project are as follows:
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Name Title
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GOLD
OPERATIONS
Hassaï Bosc, Remi Independent Geologist, Arethuse Geology Sdn Bhd
Farmer, Karilyn Consultant
Ity Camus, Yann Consultant Geologist, Systèmes Géostat
International Inc.(Geostat)
Farmer, Karilyn Consultant
Frog's Leg Eddie, Trevor Geology Manager, La Mancha Resources Australia
Farmer, Karilyn Consultant
White Foil Eddie Trevor Geology Manager La Mancha Resources Australia
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GOLD
PROJECTS
Fetekro Camus, Yann Consultant Geologist, Systèmes Géostat
International Inc.(Geostat)
VMS Bosc, Remi Independent Geologist, Arethuse Geology
Kintore Eddie Trevor Geology Manager La Mancha Resources Australia
Derudeb Bosc, Remi Independent Geologist, Arethuse Geology Sdn Bhd
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(1) Qualified person: an individual who is an engineer or geoscientist with
at least five years of experience in mineral exploration, mine
development or operation, mineral project assessment, or any
combination of these, has experience relevant to the subject matter of
the mineral project and the technical reports, and is a member in good
standing of a professional association.
Metallurgical Recovery and Cut-off Grade
In calculating mineral reserves, cut-off grades are established using long-term gold price and foreign exchange assumptions, the average metallurgical recovery rates and estimated production costs over the life of the related operation. For an underground operation, a cut-off grade is calculated for each mining method, as production costs vary from one method to another. For a surface operation, production costs are determined for each block included in the relevant operation.
The following table indicates the cut-off grade calculations and the average metallurgical recoveries at La Mancha's gold mining operations for the proven and probable mineral reserves.
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Average Metallurgical Recovery Cut-off Grades Gold Price Used
Mine (Gold %) (g Au / t) (US$ / oz)
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- Hassaï Mine 66 to 86 (1) 0.8 to 1.5 (1) 650
- Ity Mine 80 2.0 650
- Frog's Leg 94.9 3.0 711
- White Foil 91 1.2 810
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(1) Varies depending on ore type
Press Release
http://hugin.info/145163/R/1501332/436606.pdf
For additional information, please contact:
La Mancha Resources Inc.
Martin Amyot
Vice President Corporate Development
Tel: (514) 987-5115
Email: Email Contact
Nicole Blanchard
Investor Relations
(514) 961-0229