La Mancha Resources Inc. - 2006 year-end production results and 2007 gold production outlook
- La Mancha reports the production of its first ounces of gold
- White Foil and Frog's Leg advanced gold projects are moving forward
- Anticipated attributable production of 75,900 ounces in 2007
VANCOUVER, Feb. 23, 2007 - LA MANCHA Resources Inc. (TSX: LMA) ("La Mancha" or "the Company") is pleased to report its operating activities for the fiscal year ended December 31st, 2006. Year-end financial results will be released on March 26, 2007. The Company's senior management will host a conference call on Tuesday March 27, 2007 at 10:00am (EST) to discuss these financial results.
To participate in the conference call:
Via telephone:
Local: (514) 861-2255 code 3215325 followed by the number sign
Toll Free: 1 (866) 696-5910 code 3215325 followed by the number sign
La Mancha announces today that its gold output for 2006, which is attributable to the production generated between September 28th and year-end by its Hassai mine, in Sudan, and its ITY mine, in C^ote d'Ivoire totaled 16,193 ounces. These two mines were inherited through the Company's transaction with Areva.
For 2007, La Mancha anticipates to produce 75,900 ounces. The 2007 gold production will derive from the Hassai mine, the ITY mine and the White Foil mine in Australia, which is scheduled to resume production during the fourth quarter of 2007.
OVERVIEW OF THE OPERATIONS:
The Hassai mine in north-eastern Sudan has been in production since 1992 and has produced over 2 million ounces of gold to date. La Mancha owns 40% of the mine through a subsidiary and manages the operations. Between its transfer to La Mancha, on September 28th 2006 and year end, the Hassai mine contributed a gold production of 10,274 ounces (40% of a total production of 25,605 ounces) to the Company's 2006 gold production, slightly less then its production target of 12,934 ounces (40% of 32,336 ounces) for the corresponding period.
Over the 12 month period ended on December 31st 2006, the Hassai mine produced a total of 101,519 ounces, which compares to a production of 116,556 ounces over the same period in 2005. The lower production in 2006 was due to declining ore grades and recoveries for silico-baritic ores (SBR). Additional factors were two long plant stoppages due to the breakdown of equipment and the continuous stoppage of the quartz processing line due to operational reasons. The important problems due to dust generation and the difficulties to mix the material with SBR ore prompted the company to substantially modify the design of this line.
The Company anticipates that Hassai's 2007 production will reach 110,000 ounces. These moderate improvements in production versus the 2006 performance are expected despite the continuous declining trend of SBR ore grades and recoveries thanks to a) the now continuous 24-hour operation of the SBR crushing plant (a record level of 3900 t/day was achieved in January 2007) and b) the optimization of the quartz circuit which should be completed in May. It is also anticipated that the opening of the new SBR quarries will provide additional quantities of SBR feed by mobilizing the personnel presently mining the quartz ore of Kamoeb, since stockpiles of this material are sufficient to operate the plant in good condition.
The ITY mine in C^ote d'Ivoire was inaugurated in 1991 and has produced more than 650,000 ounces of gold to date. La Mancha holds a 51% interest in the mine and assumes its management. The mine contributed 5,921 ounces of gold (51% of a total production of 11,610 ounces) to La Mancha's 2006 production between September 28th 2006, when it gained interest in its ownership, and year end. Such performance corresponds with the objective of production of 5,902 ounces (51% of 11,573 ounces) that had been set for the period. Over the 12 month period ended December 31st 2006, the ITY mine produced a total of 42,568 ounces, which compares to a production of 42,921 ounces over the same period in 2005. Mining was done out of the Flotouo and Zia pits and from the laterites recuperated in the Ity sector.
In 2007, ITY's production is expected to be 42,000 ounces. The Zia pit and the Ity laterites will continue to be mined throughout the year delivering the most part of the production in 2007. As for the Flotouo pit, most of its reserves have now been mined. Therefore, it is anticipated to cease production at the end of the first quarter. Moreover, the new Mont Ity pit should start adding to the production in the second half of the year. The pit design is currently being updated to take in account the higher gold price and development work should start at the beginning of the second quarter to assure the start of production in the second half of 2007.
OVERVIEW OF THE ADVANCED PROJECTS:
Important new milestones have been reached at our 100% owned White Foil advanced gold project in Australia. The White Foil open-pit commenced production in 2002 and produced 120,000 ounces of gold before operations were stopped a year later due to excessive inflow of saline water into the pit. Since the concession is already fully permitted, the recently completed agreement to allow the discharge of the saline water contained into the pit to the nearby White Flag Lake will allow the resumption of operations.
Dewatering of the pit has started in November 2006 and it is anticipated that the pumping of the 4 million cubic meters of water contained in the pit will have been completed by the end of July 2007. Until then, a detailed assessment of the walls of the pit will be conducted and the necessary maintenance will be performed as the pit is dewatered. La Mancha remains confident to resume the White Foil open-pit operations by the fourth Quarter of 2007. The Company anticipates that White Foil's 2007 production will reach 10,500 ounces.
Significant work is also being done at our Frog's Leg advanced gold project. Located 2.5km away from the White Foil pit, the Frog's Leg open-pit commenced production in 2004. Operations were conducted according to the mining plan until the end of 2005, at which point all the surface ore had been mined. Further drilling campaigns conducted since then suggest the viability of an underground operation. A drill program had been under way since June of 2006 with the objective of significantly increasing the resource. An update of previous feasibility studies will be completed in June 2007. The mine portal development is scheduled to begin in the third quarter of 2007. Results of the recent drilling program, which were published in December, have been excellent, with several exceptional high grade intersections over substantial widths outside the original resource envelope. As previously mentioned, the Company intends to issue an updated resource calculation.
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, you may visit the web at www.lamancharesources.com.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS:
This press release contains certain forward-looking statements with respect to La Mancha, including, but not limited to, the statements regarding the anticipated Hassai's 2007 production, the acceleration of the production rate resulting from the opening of the new SBR quarries, the ITY's production for 2007, the completion by the end of the summer 2007 of the pumping of the 4 million cubic meters of waters contained in the pit and the White Foil's 2007 production. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "potential" "predict", "project", "will", "would", the negative of theses terms and similar terminology, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, 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 licenses, risks of hedging strategies and risks of delays in construction and production. The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect any of La Mancha's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to put undue reliance on forward-looking statements. La Mancha made a number of assumptions in making forward-looking statements in this press release. La Mancha considers the assumptions on which these forward-looking statements are based to be reasonable. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of release of this press release and represent La Mancha's expectations as of that date. La Mancha disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.
For further information:
La Mancha Resources Inc.
Martin Amyot
Vice President Corporate Development
Tel: (514) 987-5115
E-mail: info@lamancharesources.com
Web: www.lamancharesources.com
Renmark Financial Communications Inc.
Sylvain Laberge : slaberge@renmarkfinancial.com
Christopher Wells : cwells@renmarkfinancial.com
Tel. : (514) 939-3989
Fax : (514) 939-3717
www.renmarkfinancial.com
