All amounts are expressed in US dollars, unless otherwise indicated.
HIGHLIGHTS:
- Measured and Indicated resources of 1,774,515 oz of gold
- Proven and probable reserves of 710,507 oz of gold
- 2009 exploration budget of $7.1 million
- Goal of increasing Measured and Indicated resources to 4.0 million ounces by 2011
La Mancha Resources Inc. (TSX:LMA),(hereinafter "La Mancha" or the "Company") is
pleased to report that at year-end 2008, the Company's Measured and Indicated
resources (thereafter "M&I resources") had reached almost 1.8 million ounces of
gold, up 34% compared to 2007 year-end resources of 1.3 million ounces. Proven
and Probable reserves (thereafter "P&P reserves") reached 710,507 ounces of gold
at the end of 2008 compared to 688,860 ounces a year earlier. A full description
on La Mancha's mineral reserves and resources is provided in the table at the
end of this press release.
Michel Cuilhe, President and CEO of La Mancha noted: "The large increase in our
M&I resources in the past year is the direct consequence of the intense effort
devoted to exploration on our four main properties over the course of 2008. Just
as exciting is the fact that last year's exploration work showed and/or
confirmed that each of our main properties still has significant potential.
Preliminary results of our volcanogenic massive sulphide ("VMS") program in
Hassai suggest that we have just scratched the surface of what might become an
important gold-copper deposit, while our Frog's Leg mine in Australia delivered
another significant resource increase and yet still remains open at depth and to
the North."
La Mancha intends to continue to explore its most promising properties with the
mid-term goal of increasing its M&I resources to four million ounces of gold by
the end of 2011. An exploration budget of $7.1 million is planned for 2009 for
this purpose. The following table shows La Mancha's 2009 exploration budget on a
country-by-country basis, including the main targets.
--------------------------------------------------------------------------
Country Main Target Budget
(millions of $)
--------------------------------------------------------------------------
Sudan SBR & quartz resource definition VMS $1.9
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Australia Frog's Leg delineation Other $1.5
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Cote d'Ivoire Ity Mine resource definition $2.8
Bondoukou Prospect
--------------------------------------------------------------------------
Argentina La Ortiguita $0.9
--------------------------------------------------------------------------
La Mancha's Exploration Budget $7.1
--------------------------------------------------------------------------
La Mancha expects to capitalize approximately 24% of the total amount.
SUDAN
Exploration at the Hassai mine in 2008 yielded significant results on two
fronts. First, on the gold front, the qualification of 7.1 of the 8.9 million
tonnes of tailings accumulated on site during the first 15 years of mine
production allowed the addition of 287,000 ounces of gold (114,000 ounces
attributable to La Mancha) to M&I resources and 175,000 ounces of gold (70,000
attributable to La Mancha) to Inferred resources. Drilling activities resumed in
the first quarter of 2009 to upgrade the tailings Inferred resource to the M&I
category, and to qualify most of the remaining 1.8 million tonnes of tailings as
resources. The Company expects to provide an update of resources contained into
the tailings by the end of the second quarter of 2009.
This new resource, along with the gold contained into the Hassai quartz-type
deposit that will continue to be delineated in 2009, will constitute the basis
for a CIP/CIL feasibility study expected to be delivered at the end of 2009. An
eventual CIP/CIL plant would considerably increase the recovery rate at Hassai,
where gold is currently produced through heap leaching.
The other source of exploration success in 2008 was the Hassai VMS exploration
program. Preliminary drill results for the first of five locations where VMS
have been identified on the Hassai property indicate a minimum conceptual
deposit of 20 million tonnes at 1.3 - 1.5 g Au/t and 1.5% - 2.0% Cu, above which
an enriched supergene section was later identified. Best results for the
supergene section included 33 m at 5.76 g/t Au and 7.16% Cu from 17 m(1), 12 m
at 29.6 g/t Au from 6 m(1) and 29 m at 4.8 g/t Au and 3.43% Cu from 21 m(1).
(1) All depths are measured from the bottom of the existing pit
More attention will be devoted to the VMS program in 2009, starting with the
analysis of the second of the five VMS targets identified at Hassai, the 2-km
long Hadal Awatib pit, which has been drilled both from surface and from the
floor of the pit. Drill results for the recently-completed 51
reverse-circulation and diamond drill holes should be available by the end of
the first quarter of 2009.
Moreover, a drilling program aimed at defining the first inferred VMS resource
at the Hassai pit is currently underway. This program consists of 24 holes
totalling 12,160 m of drilling. The program will also test the extension of the
sulphide lens at depth (-600 m). The results of both programs will be released
at the beginning of the second quarter 2009.
As previously mentioned, preliminary metallurgical testing is about to begin to
estimate recovery for the sulphide ore. Results should be included in the
preliminary economic assessment to be completed in the second half of 2009.
The Hassai conceptual estimate of potential tonnage and grade to date is based
on insufficient exploration data to define a mineral resource compliant with
National Instrument 43-101. It is uncertain whether further exploration will
result in the target deposit being delineated as a mineral resource. The
estimate is based on the current geological interpretation of the lens with the
intersections of copper and gold mineralization from the 12 new holes and 7
previously-drilled holes. The estimate excludes copper and gold values outside
the interpreted zones and all lead, zinc and silver values, and does not take
into account possible enrichment from the upper part of the lenses. The estimate
also excludes dilution and recovery.
COTE D'IVOIRE
Ity Mine
In 2008, more than 16,900 meters of resource development drilling were completed
at the Ity mine, targeting high potential zones. Of the 310 holes completed, 84%
returned favourable intercepts, generating an increase of more than 245,000
ounces of gold in Ity's M&I resources (112,459 ounces attributable to La
Mancha), or more than 45% since December 2007. The project's measured and
indicated resources now stand at 768,100 ounces of gold (352,558 ounces
attributable to La Mancha) compared to 523,091 ounces of gold at December 31,
2007 (240,099 ounces attributable to La Mancha).
Exploration work will continue in 2009 on the grounds of the Ity mine, starting
with the analysis of the recently-completed drilling. The focus this year will
once again be on some targets in immediate vicinity of the current operation but
will also venture onto the east side of the Cavaly river, which crosses the
property. The first drill results are expected in the second quarter of 2009.
Bondoukou Prospect
Based on the conclusive results obtained in 2008 at the Bondoukou prospect (100%
owned by La Mancha), a first round of drilling is planned on the property in the
second half of 2009. The Bondoukou prospect is located near the western Ghanaian
border, in an area where large deposits are being mined. Based on a ground
survey conducted prior to 2002, two main geochemical anomalies have been
prioritized out of six identified anomalous zones. The exploration work
completed in 2008 includes detailed geological mapping, soil and rock
geochemical sampling and a ground geophysical survey.
AUSTRALIA
La Mancha's main two Australian properties accounted for more than 50% of this
year's total increase in M&I resources, with the exploration programs on both
properties returning excellent results.
Frog's Leg Mine
M&I resources at the Frog's Leg gold project in Australia have increased by more
than 30% compared to the June 2007 resource estimate and by more than 140%
compared to the resource estimate of December 31, 2006. The project's measured
and indicated resources now stand at 941,000 ounces of gold (479,910 oz
attributable to La Mancha), up from the previously-stated 723,000 ounces of gold
(368,700 oz attributable to La Mancha).
This year's resource increase can essentially be attributed to the conversion of
Inferred resources to the M&I category due to infill drilling that has taken
place since May 2007 in the northern extensions of the Frog's Leg deposit and
the completion of detailed extensional drilling between the Mist/Fog lodes and
the Rocket/Whistle lodes, confirming continuous mineralization between these two
orebodies and bridging the 'Gap'.
Priorities for 2009 include completing the review of the mining plan to
integrate this year's increase in resources. Expected at the end of the second
quarter of 2009, the new mining plan is expected to allow an increase in the
Frog's Leg production rate. Moreover, Frog's Leg delineation will continue with
a new resource for March 2009, to include underground drilling from the southern
extension and "Gap" region drilling. Future drilling underground during the 2009
period will be used to define the Lodes for stoping purposes.
White Foil Advanced Project
2008 was very fruitful for White Foil as well. First, the infill drilling
program completed in early 2008 prompted a 29% increase in the project's M&I
resources to 531,000 ounces of gold. Then, the completion of a positive
feasibility study for the first phase of the project allowed an initial reserve
estimate to be published for the property. These important accomplishments set
White Foil to become La Mancha's fourth producing mine. As the first phase of
the project is already fully permitted and requires minimal development, White
Foil is expected to start production of 76,000 ounces of gold as soon as a
satisfactory milling agreement is signed.
Exploration of Other Tenements
Detailed and comprehensive mapping has been undertaken on Kalgoorlie tenement
land holdings. It has indentified additional perspective drill targets around
the Park Dam properties, co-owned with Barrick Gold. The Park Dam properties
possibly hold the southern continuation of the Frog's Leg shear (Mungari Shear)
and the Southern Cross Porphyry. Drill programs of RC will test across these
tenements. Additional drilling will take place at the Firefly on the Kurranwang
trend, a conceptual target that shows strong magnetic response in aerial
magnetic and strong geological characteristic in multi-element and alteration
data.
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/CIP plant in
Hassai 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 2007 Annual
Information Form filed with the Securities Commissions, as well as the Toronto
Stock Exchange.
MINERAL RESERVES AND RESOURCES (1)(2)(3)
La Mancha Resources share
December 31st 2008
Tonnes Grade Ounces
GOLD OPERATIONS (t) (g/t) (ozs)
-------------------------------------------------------------------------
Frog's Leg (51%) resources shown inclusive of reserves
-------------------------------------------------------------------------
Proven Reserves 477,762 5.63 86,417
Probable Reserves 1,231,204 5.33 210,871
Subtotal 1,708,966 5.41 297,288
Measured Resource 429,420 7.20 98,940
Indicated Resources 1,770,720 6.70 380,970
Total Measured and
Indicated 2,200,140 6.80 479,910
Inferred Resources 463,080 5.90 87,210
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Hassai Mine (40%) resources shown inclusive of reserves
-------------------------------------------------------------------------
Proven Reserves - - -
Probable Reserves 1,050,542 5.02 169,432
Subtotal 1,050,542 5.02 169,432
Measured Resource 1,490,000 2.06 98,637
Indicated Resources 2,160,404 4.50 312,410
Total Measured and
Indicated 3,650,404 3.50 411,047
Inferred Resources 1,979,809 3.34 212,281
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Ity Mine (45.9%) resources shown inclusive of reserves
-------------------------------------------------------------------------
Proven Reserves 812,889 5.21 136,266
Probable Reserves 195,993 5.00 31,491
Subtotal 1,008,882 5.17 167,757
Measured Resource 1,827,386 4.24 249,283
Indicated Resources 1,266,447 2.54 103,275
Total Measured and
Indicated 3,098,974 3.54 352,558
Inferred Resources 939,114 3.02 91,157
GOLD PROJECTS
-------------------------------------------------------------------------
White Foil (100%) resources shown inclusive of reserves
-------------------------------------------------------------------------
Proven Reserves
Probable Reserves 980,454 2.41 76,031
Subtotal 980,454 2.41 76,031
Measured Resource
Indicated Resources 7,538,000 2.20 531,000
Total Measured and
Indicated 7,538,000 2.20 531,000
Inferred Resources 471,000 1.60 24,000
-------------------------------------------------------------------------
Fetekro (65%) resources shown inclusive of reserves
-------------------------------------------------------------------------
Inferred Resources 2,388,104 2.43 186,574
-------------------------------------------------------------------------
TOTAL GOLD resources shown inclusive of reserves
-------------------------------------------------------------------------
Proven and Probable
Reserves 4,748,844 4.65 710,507
Measured and indicated
Resources 16,487,518 3.35 1,774,515
Inferred Resources 6,241,107 3.00 601,223
-------------------------------------------------------------------------
(1) Reported mineral reserves have been calculated in accordance with
definitions and guidelines adopted by the Canadian Institute of Mining,
Metallurgy and Petroleum. Unlike proven and probable mineral reserves,
mineral resources (of all categories) do not have demonstrated economic
viability.
(2) In mining operations, measured and indicated resources are considered
uneconomic at the price used for reserves calculations.
(3) All calculations dated at 31/12/2008 except Fetekro dated 31/12/2006
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:
-------------------------------------------------------------------------
Name Title
-------------------------------------------------------------------------
GOLD OPERATIONS
- Hassai Plyley, Bill Chief operating officer, La Mancha
Resources
Eddie, Trevor Chief Geologist, La Mancha Resources
Australia
- Ity Bosc, Remi Independent Geologist
Camus, Yann Consultant Geologist, Systemes Geostat
International Inc.(Geostat)
- Frog's Leg McDiarmid, Joe Underground Mine Manager, La Mancha
Resources Australia
Eddie, Trevor Chief Geologist, La Mancha Resources
Australia
-------------------------------------------------------------------------
GOLD PROJECTS
- White Foil Plyley, Bill Chief operating officer, La Mancha
Resources
- Fetekro Eddie, Trevor Chief Geologist, La Mancha Resources
Australia
-------------------------------------------------------------------------
(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.
MINERAL RESERVES AND MINERAL RESOURCES
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 of the proven and
probable mineral reserves.
-------------------------------------------------------------------------
Mine Average Metallurgical Recovery Cut-off Grades Gold Price Used
(Gold %) (g Au / t) (US$ / oz)
-------------------------------------------------------------------------
- Hassai Mine 63 to 89 (1) 1.5 650
- Ity Mine 80 2.0 650
- Frog's Leg project 94.9 3.0 675
- White Foil 91 1.2 810
-------------------------------------------------------------------------
(1) Varies depending on ore type
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