Dioro and La Mancha JV to push harder at Frog’s Leg gold mine

Vancouver – Proven and probable reserves are up by 45% at the Frog’s Leg mine, a 49-51 joint venture between La Mancha Resources (LMA-T, LACHF-O) and Dioro Exploration (DIO-T, DIO-A).

The joint-venture partners had previously estimated proven and probable reserves at 3.2 million tonnes grading 5.53 grams gold per tonne.

Through conversion of tonnage that was in the measured and indicated categories, however, proven and probable reserves now weigh in at 4.9 million tonnes grading 5.02 grams gold for 789,504 grams contained oz. gold.

The increase in reserves at the Frog’s Leg mine, 25 km west of Kalgoorlie-Boulder, Western Australia, bodes well for production plans. Dioro reports that it and La Mancha expect to ramp up previously forecast yearly production by about 29% to just over 113,000 oz. gold starting in 2010.

The upgraded reserves boost mine-life from 5.9 years to 7.1 years.

So far in 2009 Dioro reports that the joint venture mined 154,755 tonnes ore grading 4.2 grams gold in the quarter ending May 31.

Dioro estimated its share of gold produced at 12,148 oz. at a cash cost US$486 per oz. gold.

The recent success of Frog’s Leg has helped to make Dioro an attractive target of takeovers. Avoca Resources (AVO-A) has offered Dioro shareholders one Avoca share for ever 2.4 Dioro shares; the bid valued Dioro at 74.8¢ per share.

Dioro’s board of directors, however, rejected the offer and recently announced it is in advanced discussions with Northgate Minerals (NGX-T) in a transaction which it says may better value the company. The details of the transaction, Dioro says, are forthcoming.

Avoca hasn’t given up, though, and it subsequently extended its bid until July 21.

On news of the upgraded reserves Dioro’s share price held steady at 59¢ in Toronto and La Mancha’s share price gained 1¢ to close at 79¢. Respectively Dioro and La Mancha have around 91.6 million and 142 million shares outstanding.