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La Mancha Group implements its growth strategy in Australia: Gold production to increase by 120% in 2014
Published : February 11, 2013
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MONTREAL--(Marketwire - February 11, 2013) -

  • Acquires Alacer's minority interests in its Australian mines for $A 141m
  • Concludes an 18-month toll treatment agreement for $A 25m
  • Launches the construction of its own processing plant for circ.$A 110m
  • Puts in production phase 2 of its 100% owned White Foil deposit

La Mancha Group has entered into a binding asset sale and purchase agreement to acquire Alacer group's 49% minority interest in the Frog's Leg mine joint venture, as well as minority interests in the Lake Greta (24.5%) and Avoca (40.0%) exploration project joint ventures.

The value of the transaction amounts to A$141million and is expected to be completed in the coming weeks, subject to the relevant Australian regulatory approvals.

In parallel, La Mancha has concluded a A$25m agreement under which Alacer will provide toll milling services to La Mancha for 18 months (until June 2014), through its Jubilee processing facility located in South Kalgoorlie.

Sebastien de Montessus, CEO of the La Mancha, stated: "Only five months since the buy-out of the La Mancha Group, we are moving rapidly towards becoming a strong mid-tier gold producer. This deal marks a key milestone for La Mancha's new development strategy, which aims to increase the current gold production four-fold to reach 500,000 ounces per year by 2016. The deal also has a significant impact on our profitability, as it should result in a significant decrease in our Australian operating costs. We have now reached the critical size to launch the construction of our own processing plant, thereby setting up the platform to continue to develop our mining assets in Australia."

As a result of this transaction, and the development of White Foil Phase 2, La Mancha's Australian gold production should increase from 67,000 ounces per year in 2012 to circa 150,000 ounces per year by 2014, representing a 120% increase in production, with a 60% decrease in milling costs:

  • La Mancha expects to double its share of gold production from the Frog's Leg mine which should increase from 67,000 ounces in 2012 to roughly 120,000 ounces over the next 3 years.

  • The ore mined over the next 18-months should primarily be treated through the toll treatment agreement concluded with Alacer. As a result of better terms and conditions, La Mancha Australia should save about 20% on its treatment costs compared to what was incurred in 2012.

  • Having reached the critical size at its Australian mining complex, La Mancha will now launch the construction of its own CIL processing plant, which should be operational around end of the first half of 2014. This $A 100 million investment should generate an additional 50% savings in treatment costs.

  • As a result the cost savings, La Mancha should be able to convert roughly 70% of White Foil's current resource into reserves, thereby launching the mining of White Foil Phase 2 which should produce circa 30,000 ounces by 2014, increasing to over 60,000 ounces per year by 2016.

The acquisition transaction and the construction of the milling plant will be financed by a combination of equity and a A$200m secured loan facility underwritten by a syndicate of banks comprising of Barclays Bank PLC, Credit Suisse AG and Macquarie Bank Limited. This facility will also be used for general corporate purposes.

About La Mancha Group
La Mancha is a privately held international gold producer with mining operations, development projects and exploration activities in Africa and Australia. As the operator of four gold mines in three countries (Australia, Ivory Coast and Sudan), La Mancha currently manages expected total gold production of up to 260,000 ounces (up to 130,000 ounces attributable to La Mancha). With the upcoming development of its VMS project in Sudan, La Mancha has the objective to boost its attributable production to 500,000 gold equivalent ounces by 2016. For more information, please visit www.lamancha.com.

Disclaimer
This press release does not, and shall not in any circumstances, constitute or form part of a public offering nor an invitation or solicitation to the public to purchase or subscribe for securities of any entity of La Mancha Group in any jurisdiction. Persons who come into possession of this press release should inform themselves of and, as the case may be, observe the applicable laws and regulations limiting the distribution of this press release in certain countries. To the fullest extent permitted by applicable law, La Mancha disclaims any responsibility or liability for the violation of any such restrictions by any person.



For additional information, please contact:

La Mancha Group
Vincent Benoit
Executive Vice President Strategy & Corporate Development
Tel: (33) 01 55 27 24 87
Email: vincent.benoit@lamancha.com

La Mancha Australia
Rodney Johns
General Manager
Tel: (61) 08 9268 4000
Email: rod.johns@lamancharesources.com.au

Euro RSCG
Yves-Paul Robert
Press relations
Tel: (33) 06 76 43 05 55
Email: Yves-paul.robert@havasww.com

La Mancha Group implements its growth strategy in Australia: http://hugin.info/145163/R/1677237/546914.pdf

Data and Statistics for these countries : Australia | Ivory Coast | Sudan | All
Gold and Silver Prices for these countries : Australia | Ivory Coast | Sudan | All

La Mancha Resources

PRODUCER
CODE : LMA.TO
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La Mancha Res. is a gold producing company based in Canada.

La Mancha Res. holds various exploration projects in Argentina and in Australia.

Its main assets in production are WHITE FOIL, ITY, HASSAÏ and FROG'S LAKE in Australia, its main asset in development is FETEKRO in Australia and its main exploration properties are LA ORTIGUITA, BONDOUKOU, HUALILAN and ARIAB in Argentina and HASSAI VMS and PARK DAM in Australia.

La Mancha Res. is listed in Canada and in United States of America. Its market capitalisation is CA$ 499.5 millions as of today (US$ 500.2 millions, € 391.6 millions).

Its stock quote reached its lowest recent point on October 31, 2008 at CA$ 0.04, and its highest recent level on March 09, 2012 at CA$ 4.03.

La Mancha Res. has 142 716 000 shares outstanding.

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Annual reports of La Mancha Resources
Annual Report
Nominations of La Mancha Resources
4/2/2012ANNOUNCES CHANGES TO ITS BOARD OF DIRECTORS
5/4/2011Appoints New COO and CFO
2/26/2007New Appointments to the Board of La Mancha
Financials of La Mancha Resources
3/28/2012POSTS RECORD NET EARNINGS OF $36.1 M AND RECORD OPERATING C...
8/8/2011POSTS RECORD NET EARNINGS FOR THE SECOND QUARTER
5/18/2011NET EARNINGS DOUBLE ON RECORD CASH FLOW FROM OPERATING ACTIV...
Project news of La Mancha Resources
2/11/2013Group implements its growth strategy in Australia: Gold prod...
11/13/2012ANNOUNCES COMPLETION OF COMPULSORY ACQUISITION BY WEATHER I...
3/27/2012MEASURED AND INDICATED RESOURCES MORE THAN DOUBLE TO 4.8 MI...
1/19/2012MEETS ITS 2011 GOLD PRODUCTION FORECAST
5/16/2011(Ity)POSITIVE FEASIBILITY STUDY FOR THE HASSA=C3=8F MINE: LA MANC...
5/9/2011(Ity)ITY MINE RESUMES OPERATION
3/29/2011(Frog's Lake)A Record Year for La Mancha in 2010 as Production Increases ...
2/24/2011(Ity)ITY Mine Update
8/23/2010(Fetekro)Intersects Grades of Up to 135 g/t Au at Its Fetekro Propert...
8/3/2010First Stages of Frog's Leg Drilling Extension Program Return...
7/29/2009(Hassaï)New Longhole Drilling Doubles the Length of La Mancha's Hass...
7/20/2009(Frog's Lake)Frog's Leg Mine to Boost its Average Annual Gold Production ...
5/26/2009(Hassaï)Confirms the Presence of a Second Enriched Zone at the Hassa...
2/17/2009(Frog's Lake)Plans to Increase Production to up to 100,000 oz of Gold in ...
1/22/2009(Frog's Lake)2008 Year End Production Increases 33% to 71,550 Ounces
1/7/2009(Hassaï)Hassai Mine Tailings Begin Adding to La Mancha's Gold Resour...
1/5/2009(Ity)Resource at La Mancha's Ity Mine Jumps 50% on Excellent Dril...
12/10/2008(Hassaï)Recent VMS Drilling Suggests the Presence of a Supergene Zon...
7/30/2008(Hassaï)Preliminary Drill Results at La Mancha's Hassai Mine Suggest...
8/8/2008(Frog's Lake)Posts its Highest Quarterly Gold Production to Date
5/13/2008(Frog's Lake)Obtains a First Gold Pour From New Australian Frog's Leg Min...
4/23/2008(Frog's Lake)Reports Wide High-Grade Intercepts 150 Meters Below Current ...
7/5/2007(Frog's Lake)Frog?s Leg?s Resource Nearly Doubles
Corporate news of La Mancha Resources
11/13/2012Offer Update
8/28/2012ACKNOWLEDGES WEATHER II TAKEOVER OFFER SUCCESSFUL AND DECLAR...
8/3/2012SECOND QUARTER GOLD PRODUCTION JUMPS 21% FROM THE PREVIOUS Q...
7/31/2012Offer Update - La Mancha TSX:LMA
7/20/2012Offer Document Posted - La Mancha TSX:LMA
7/13/2012REACHES DEFINITIVE AGREEMENT TO BE ACQUIRED BY WEATHER II AT...
6/21/2012DISCOVERS A SIGNIFICANT VMS LENS BELOW THE ODERU
6/15/2012(White Foil)WHITE FOIL PROPERTY SHOWS UNDERGROUND POTENTIAL WITH MINERA...
6/11/2012(Ity)New Drill Results at La Mancha's Ity Mine Indicate That Mine...
5/15/2012REPORTS Q1 NET EARNINGS OF $7.9 MILLION
4/9/2012ANNOUNCES CHANGES TO ITS BOARD OF DIRECTORS
3/22/2012Proven and Probable Reserves Grow by 36% at La Mancha's Frog...
3/14/2012ANNOUNCES AUCTION PROCESS
2/22/2012VMS Resource Increases to 81MT Indicated and 37MT Inferred
1/31/2012Discovers a Mineralized Structure Extending Over 800M at Sis...
9/12/2011HASSA=C3=8F VMS DRILLING UPDATE: INTERSECTS 3.30M @ 94 g/t G...
7/11/2011HIGHLIGHTS IMPORTANT STEP FORWARD FOR SUDAN
6/27/2011Hassai Mine's Third Quarter Production Impacted
6/17/2011(Ity)Clarification on CIL Feasibility Study
5/3/2011NOMME UN NOUVEAU CHEF DES OPERATIONS ET UN NOUVEAU CHEF DES ...
1/14/2011RECORD GOLD PRODUCTION IN 2010
7/22/2010Confirms the Discovery of a New Gold Mineralised Zone at its...
5/12/2010Continues to Generate Profits Into 2010
11/11/2009Reports Another Strong Quarter
8/7/2009Posts Record Quarterly Net Earnings As Gold Production Rises...
2/4/2009Takes Advantage of Strong Gold Prices
2/5/2008 to Spend $10.6 Million on Exploration in 2008
5/28/2007Completes the Renewal of the Ity Mine's Mining Permit
5/16/2007Frog's Leg Results Exceed Expectations
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