La Mancha extends gold strike at Ity

VANCOUVER — International gold producer La Mancha Resources (LMA-T) unveiled some good news at its Ity mine in Côte d’Ivoire to start June, when the company released drill results that indicate an extension of gold mineralization beyond the operations existing in-pit shell. La Mancha operates the project with a 45.9% interest under a joint-venture agreement where the Côte d’Ivoire government holds a 10% stake and the Société d’État pour le Dévelopement Minier de la Côte d’Ivoire owns the remainder.

La Mancha completed roughly 8,000 metres of diamond and reverse-circulation drilling in a bid to extend Ity’s strike at depth, as well as follow up on a lateritic extension to the southwest. The company succeeded on both counts, with in-pit diamond drilling revealing high-grade extensions of the current pit resource, and reverse-circulation holes revealing a potential lower-grade deposit at surface.

The West extension was discovered during drilling on the pit floor collared on the western slope. La Mancha cut a number of high-grade intercepts that suggest the presence of a thick mineralized zone extending well beyond its current resource model. The mineralization is found predominantly in hydrothermal agrillic brecchias with local sulfide pockets, and is characterized by evidence of karstification superimposed on hydrothermal alterations in the area. The extension is well positioned to be incorporated into an expanded open-pit as the mine ages.

Highlights from the in-pit drill program include: 45 metres grading 7.54 grams gold per tonne starting from 43 metres depth in hole S514; 14.7 metres of 6.4 grams gold from 86 metres in hole S524; and 5.6 metres carrying 8.43 grams gold from 54 metres in hole S509.

“We are thrilled with these results as they confirm the robust nature of the Mount Ity deposit and its potential for significant growth,” commented president and CEO Dominique Delorme. “In light of the discovery of the new west extension zone directly below the current resource envelope, our goal is now to grow Ity’s resource by more than 300,000 ounces to over 1 million ounces of gold by year-end. Furthermore, we expect to be able to easily integrate this extension zone into the new mine plan with a pit cutback.”

La Mancha enjoyed a bonus from its drill program when the company discovered a lower-grade laterite mineralization at surface in the southwest portion of its Mt. Ity open pit. According to vice president of exploration Jean-Jacques Kachrillo, the laterite material will help optimize heap leach recovery of gold from the rich saprolite ores.

“This large near-surface mineralized laterite zone, although low in grade, should have a positive impact on the cost structure going forward,” Kachrillo commented.

Highlights from the reverse-circulation program on the southwest extension include: 35 metres grading 1.11 grams gold in hole I410, 23 metres carring 2.03 grams gold in hole I392, and 26 metres of 1.3 grams gold in hole I389.

With roughly half of its drilling complete, La Mancha expects a second rig to arrive in mid-June to bolster exploration efforts. The western pit exploration is scheduled for completion during the third quarter, along with an updated geological model and resource estimate.

Ity holds a current measured and indicated resource of 2.7 million tonnes grading 3.45 grams gold for 296,100 contained oz. Further inferred resources total 4.1 million tonnes grading 1.6 grams gold for 208,700 contained oz. Ity’s 2012 guidance estimate sits between 60,800 and 67,500 oz. of gold production.

La Mancha’s net earnings jumped 52% during 2011 to US$36 million, with gold production totalling 121,450 oz. of gold at average cash costs of US$688 per oz. The company stated in mid-April that it was putting itself up for sale at the behest of its majority shareholders, though no news has emerged on that front since the announcement.

La Mancha has been on a steady downward trend following news of a potential sale, with prices dropping 36% or $1.39 since April 4. The company received a bit of a boost from the recent results at Ity, as shares jumped 4% or 10¢ on below average 13,000 share volumes en route to a $2.46 presstime close.