All amounts are expressed in CA dollars, unless otherwise indicated.
Unaudited
LA MANCHA CONTINUES TO GENERATE PROFITS INTO 2010
HIGHLIGHTS
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Gold production up 17% to 21,654 ounces at an average cash cost of US $614 per ounce
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Cash flow from operating activities of $9.9 million
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Revenues of $27.8 million
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Net earnings of $3.7 million
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Cash and short-term investments of $21.4 million
PARIS, FRANCE - May 12, 2010 - La Mancha Resources Inc. (TSX: LMA, hereinafter �La Mancha� or the �Company�) produced 21,654 ounces of gold at an average cash cost of US $614 per ounce during the first quarter of 2010 compared to 18,515 ounces of gold at an average cash cost of US $451 per ounce in the same quarter last year. The increase in production is due to the ramp-up of the Australian Frog�s Leg mine and the improved performance of the Hassa� mine in Sudan, which together more than compensated for lower production at the Ity mine in C�te d�Ivoire.
This stronger gold production drove La Mancha�s first quarter revenues up to $27.8 million, marking a 13% increase over the corresponding period of last year, as the gold price in Canadian dollars remained fairly stable between the two periods.
Dominique Delorme, President and CEO of La Mancha, stated: �La Mancha continues to progress in accordance with our business plan. While we are pleased with our strong first quarter results, they still do not fully reflect our achievements. For the second quarter, we expect the combined impact of increased mill capacity, increased ore production at Frog�s Leg, and the recent start of production at White Foil to boost our gold production from Australia alone to over 31,000 ounces. We therefore remain confident that we will achieve our target 2010 gold production of up to 140,000 ounces.�
La Mancha�s cash flows from operating activities totalled $9.9 million in the first quarter of 2010, down from $11.0 million in the corresponding period of 2009 as higher gold production did not compensate for the increase in cash cost per ounce. The Company�s cash and short-term investments remained strong at $21.4 million as of March 31, 2010, while long-term debt decreased from $16.1 million to $14.3 million year over year.
La Mancha posted net earnings of $3.7 million for the first quarter of 2010, with each mine reporting positive results. This compares to net earnings of $3.5 million a year ago.
AUSTRALIAN OPERATIONS
The Frog�s Leg mine generated 9,789 ounces of gold net to La Mancha from toll milling at an average cash cost of US $570 per ounce (AUD 631 per ounce) in the first quarter of 2010 compared to 6,115 ounces at an average cash cost of US $386 per ounce (AUD 562 per ounce) generated in the corresponding period of 2009.
The cash costs per ounce in Australian dollars increased by 12% over the corresponding period of 2009 mainly due to increases in both mining unit costs, as mining depth increased, and contracted toll milling costs. As shown above, the unfavourable foreign exchange rate fluctuation was the main reason for the cash cost variation expressed in US dollars per ounce.
Underground ore extraction continued to accelerate, once again setting a record, and even surpassing the average ore extraction rate in the upgraded mine plan published in the second half of 2009.
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CORPORATE EVENTS
La Mancha will present at the NYSSA (New York Society of Security Analysts) 10th Annual Metals & Mining Industry Conference (New York, USA) to be held on June 2 and 3, 2010. Management of La Mancha will present at 1:45 pm on Thursday, June 3, 2010.
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 http://www.lamancha.ca/.
THIS PRESS RELEASE CONTAINS TABLES, CLICK HERE TO VIEW THE ENTIRE DOCUMENT IN PDF FORMAT.
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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 profitability, development and construction of mine and production targets and timetables; statements regarding the increase in production of Frog�s Leg; statements regarding the future production level of the quartz line in Sudan and the positive impact that will have the upcoming dust vacuum system; statements regarding the Company�s ability to deliver a scoping study on the VMS project during the third quarter of 2010; statements regarding the positive impact of Ity�s new leaching pads on production. 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 statemen ts 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 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.
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