La Mancha Group implements its growth strategy in Australia: Gold production to increase by 120% in 2014
February 11, 2013
La Mancha Group implements its growth strategy in Australia:
Gold production to increase by 120% in 2014
* 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
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