La Mancha looks to add ounces in 2011

Having a geographically diversified portfolio of mining projects is always a good idea, but it is especially so when one of your projects is in Cote d’Ivoire.

La Mancha Resources (LMA-T) had to suspend all gold mining and exploration activities in the country due to the worsening political situation there.

And while La Mancha is banking on both its track record there, and the country’s significant geological potential, to eventually turn things around, its whole story is far from made up its Cote d’Ivoire assets.

Indeed its Ity mine in the country accounted for just over 10% of the company’s total gold production in 2010.

But that’s not to say that the rest of the company’s assets are free from political risk.

While one of its two key assets lies in Australia, its flagship project, the Hassai mining complex, is situated in a country that has made headlines for its own political strife over the last decade, Sudan.

La Mancha, however, has been able to operate without interruption in the country, and going forward, Hassai looks to have significant expansion potential thanks to a VMS deposit on the site.

“Our objective is to double our VMS resource before initiating feasibility work; we are confident that this objective could be met before the end of 2011 with the current program,” Dominique Delorme, president and chief executive of La Mancha says in a statement. “In parallel, we will continue to further define new resources at our Australian properties while keeping our Cote d’Ivoire exploration on stand-by until the political situation stabilizes.”

The company has already shown itself to be adept at adding ounces, as it upped its proven and probable reserves to 612,835 oz. of gold and its measured and indicated resources to 1.94 million oz. of gold over the course of 2010.

Exploration work at its Frog’s Leg project in Australia generated 348,000 ounces of gold to the mine’s resource, which represented twice as much as the company was targeting, and a new gold deposit was discovered on its wholly owned Kintore property, which sits 30-km northeast of Frog’s Leg.

Such results are motivating the company to ramp up exploration. In all $23 million will be spent on exploration programs for 2011, of which $12.2 million attributable to La Mancha.

More than half of those dollars will go to the VMS project at Hassai in Sudan as seven rigs are set to do 100,000 metres of drilling on the VMS at Hassai for 2011.

La Mancha has a 40% stake in Hassai, which saw a preliminary economic assessment (PEA) completed in the fall of last year.

That PEA defined two distinct phases of development with phase one calling for the installation of a carbon-in-leach (CIL) plant to optimize current gold production, while phase two would see a flotation plant built to process the VMS ore.

The company’s most recent exploration program increased one of the pit’s Measured and indicated resource to 146,300 oz. The company says a new reserve and life-of-mine plan pit will be part of an upcoming feasibility study.