La Mancha Resources Inc LACHF

Very positive

[RedHorizon]

The news release from earlier today is far more positive than it first appears.  Here's why:

"...For the second quarter,we expect the combined impact of increased mill capacity, increasedore production at Frog's Leg, and the recent start of production atWhite Foil to boost our gold production from Australia alone to over31,000 ounces..."

If we then add the production from Hassaii and Ity for Q1 to the 31000 forecast for Australia, LMA is implying that they will produce in the neighborhood of 43,000 ounces for the 2nd quarter.

"...Hassai mine production totalled 17,748 ounces of gold (7,099 ouncesattributable to La Mancha)"

"...The Ity mine produced a total of 10,380 ounces of gold (4,766 ouncesattributable to La Mancha)"

So:  31,000+7099+4766 = 42,865 ounces for Q2.  That's about 170,000 ounces per year at that rate.  Now my bet is that there are some factors which will serve to reduce this number since it is far above the annual forecast of 140,000.  However, I am now VERY comfortable with the target of 140,000.  They seem to be getting things done in Australia quite expeditiously.

The stock has failed to move recently due to fears regarding the new mining tax in Australia.  All of the Australian miners have been affected by that.  LMA going sideways is apparently not due to any weakness at the company.

GLTA

[twonxanity]

My take on the report is just neutral. It was worse than I was hoping/expecting. With gold prices increasing dramatically other producers are seeing strong gains in share price, while this one has stagnated. However, I will continue to hold as production ramps up and cash cost hopefully decrease to sub $500 again.What are others take on the report.

[twonxanity]

Cash cost increases were alarming to me. I would have liked a little more information about how they will reduce them as they were up across the board.

[twonxanity]

I really don't see how Australian gold production will go from under 10k to over 31k in the second quarter. Can someone enlighten me??White Foil is only expected to add 13-16k gold for all of 2010. So that is only a small part of the reason. The increase does not seem feasible.Twonx

[jrj90620]

Here you go.From recent 1st quarter report.Atotal of 55,660 tonnes of ore were processed in the first quarter of2010, in line with the toll- milling agreement, while La Mancha'sshare of underground ore mined totalled 89,000 tonnes. Consequently,at quarter-end, the La Mancha stockpile had grown to 93,500 tonnes ofore, representing an approximate gold production equivalent of13,3001 recoverable

[Swing4theFence]

LMA sold off a bit today because the Q1 results were kind of ho hum - if not, disappointing.  Not much in the way of financial performance and I think most were looking for production in excess of 25,000 oz's  Cash costs were definitely disappointing which spiked about $150 oz compared to the same quarter last year.The market doesn't lie and it is easy to see what this one has

[twonxanity]

Nice catch JRJ I read the report, but didn't pick that up. So not only do the already have over 13k ounces ready to go but milling will be 3x as much. Now the feasibility of reaching 140k ounces for the year is more apparent.

[RedHorizon]

I certainly agree that Q1 production and cash costs were disappointing.  I am making the point that their comments on Q2 are very positive.  If they can produce 42000+ ounces in Q2 this will be record production by a wide margin, it will certainly generate record EPS for a quarter.  I think that is what it will take to get the market to give them the credit they deserve.  They

[FortMacMoney]

Good post RedHorizonLike some of the others on this board who are long on LMA all will come in due time.  LMA used have a strange habit of when it increased it would rise at an almost frantic rate.  Then settle down and then rise again more slowly until the next big jump.We have not done this pattern for sometime.  Perhaps these large increases were funds buying and selling large

[RedHorizon]

Fortmac:I definitely think there was some fund buying because the company was just turning profitable for the first time last year so that brought in many new investors.  And also the company increased their public relations efforts over the past year.I don't think the big swings in LMA are necessarily attributable to funds.  Remember that the float is only 50 million shares. 

[goldens]

Why would Areva owning 63% of LMA have anything to do with volatility. i noticed that on moves up the spread in the bid/ask stays pretty tight. Once the buying slows the spread seems to widen dramatically (5-10cents) and it gets taken down very quickly. With all the growth in this company I just don't understand why we are sitting at $2 still.

[jordanjnorris]

If Avena holds 63 percent of the shares, that would mean that less than 40 percent are available to retail investors (this doesn't even include any instituional holdings or insider holdings).  So it is less than 40 percent of the companies outstanding shares that are available to.  Way less probably.Less shares equals more volatility.