In less than a year, La Mancha Resources (LMA-T) has increased its total underground resources by 70% at its Frogs Leg deposit in Western Australia, driving the company to get its feasibility study done by the end of June.
A $2.1-million-drill program between May and September 2006 has resulted in a 35% increase in measured and indicated resources to 369,000 oz. gold and a 129% increase in inferred resources to 402,000 oz. gold. The average gold grade rose 17% to 8.35 grams gold per tonne, using a new cut-off grade of 3.5 grams.
Based on the results we are definitely giving all we have to get this feasibility study out as quickly as possible, says Martin Aymot, vice-president corporate development.
The company plans to start construction of its mine portal in July so it can begin gold production by early 2008. La Mancha has budgeted $18 million for the development of the mine. The company had $50 million in cash at the end of 2006.
La Mancha and its 49% joint venture partner Doiro Exploration (DIO-A) will spend $4.6 million on drilling Frogs Leg in 2007. By August, the company will have drilled another 20,000 metres in pursuit of converting inferred resources to the measured and indicated category and to further extend the known mineral zone along strike and at depth.
The Frogs Leg deposit is 20 km west of Kalgoorlie, Western Australia, within the Norseman Wiluna Belt, which is part of the Yilgarn Craton, where two-thirds of the countrys gold and most of the nickel is produced. The deposit was discovered in 1999 and the company produced 116,600 oz. gold from an open pit on the property between April 2004 and October 2005.
La Mancha also plans to bring its wholly-owned White Foil deposit, 2 km southwest of Frogs Leg, into production by the end of the year. The White Foil open pit has been on care and maintenance since 2004 because of excessive flow of saline water into the pit. The company is currently draining the pit via a $3.5 million, 6-km-pipeline to a transfer facility. If all goes to plan, the company will produce 10,500 oz. gold in the fourth quarter and 40,000 oz. gold in 2008.
La Mancha has a 51% stake in the Ity mine in Cte d’Ivoire, and a 40% stake in the Hassa mine in Sudan.
The companys stock was down 1 at $1.17 in Toronto on Monday on a volume of 580,000 shares. La Mancha has 142 million shares outstanding, 64% of which are owned by Areva (ARVCF-O).
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