La Mancha Resources Inc LACHF

RE: RE: Why this is important

[Bobwins]

typically they don't have a lot of leeway in the costs.  They have a certain kind of ore at various depths that need X amt of costs to extract and then need to apply certain mill operations to the ore to extract the valuable metals.  The feasbility study is typically done several years before the first metal is sold so they need to be conservative and use numbers that will likely be in the range plus give the company the range of gold/copper prices that will result in a successful project.  They are studying ways to reduce capex right now.  Probably will stage mine/mill buildout in several phases to allow the mine's cashflow to help pay for the mine rather than build it all at once.$0$0$0$0Hopefully construction costs will be lower due to recession.  The actual operation of the open pit will rely on diesel for the excavators and haul trucks.  The best thing they can do there is lock in diesel hedges as soon as practical.  $0$0$0$0$0I think it is wise to lower the initial capex as much as possible.  Get it going and then increase the size later.  It will be expensive to negotiate a new loan package now so they need the number to be as small as possible going into the negotiations.  Being gold miners, I assume they are optimistic about long term gold prices but they also have to protect the downside just in case.  Bobwins$0