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La Mancha ramps up despite doldrums

Day service crew members Brett Herd, left, and Toby Andersen in front of the ball mill at La Mancha Resources' new $110 million processing plant.

Egyptian-owned La Mancha Resources continues bucking the trend of WA's embattled gold sector, creating 40 new jobs with the restart of its White Foil open pit, 20km west of Kalgoorlie-Boulder.

The ramp-up coincides with the commissioning of La Mancha's new $110 million processing plant, which generated another 40 positions and is on track for its maiden gold pour this month.

La Mancha's Australian general manager Rod Johns said commissioning was well underway and the company was on budget with its efforts.

"We've commissioned the crusher and the mill is getting underway as we speak," he said.

"We're anticipating pouring a gold bar before the end of the month."

La Mancha is privately owned by Cairo-based billionaire Naguib Sawiris, whose net worth was estimated at $US2.8 billion by Forbes.

The telecom tycoon acquired La Mancha, along with African assets in Sudan and Ivory Coast, in a $C500 million takeover in 2012.

It signed off on the 1.5 million-tonne-a-year mill last year as gold was heading into the doldrums.

But La Mancha has seemingly been bullet-proof throughout a period of industry-wide cost cutting and job losses, emerging unscathed in February when a 4.6 magnitude earthquake caused an underground rock fall at Northern Star Resources' neighbouring Raleigh mine.

White Foil, last mined in mid-2010, will boost the company's Australian workforce to 280 once operational by June and it may be about to get the cheque book out again for a new fleet with owner-operator as its management preference.

La Mancha is now targeting 150,000 ounces at its Australian operations next year.

Those numbers would rank it alongside fellow mid-tier producers Norton Gold Fields, Saracen Mineral Holdings and Silver Lake Resources, whose output will fall significantly from 205,000oz and 220,000oz this financial year once its Murchison operations are mothballed.

Chinese-owned Norton is on track to pour between 176,000oz and 184,000oz this year, while Saracen forecasts 120,000oz to 130,000oz this financial year.

Mr Johns said La Mancha, which came close to matching Northern Star's successful $75 million bid for Barrick's Kanowna operations, remains a bargain hunter in a buyer's market. But he sees strong potential for organic growth at the existing operations, with the Frog's Leg mine expected to extend well beyond 2019.

Frog's Leg is the same sort of high-grade dirt which Northern Star is mining at its nearby Rubicon-Hornet mine and the rich Pegasus discovery, touted as one of Australia's best gold finds in a decade.

There is at least five years' life at White Foil and potential for an underground bulk mining operation in the long-term.

"We're still looking for opportunities. We've got a great platform for the business now with our own processing facilities," Mr Johns said.

"Our intention is to build a mining camp in that area.

"The most cost-effective way is to find it yourself, so that's priority one. But we'll also look for opportunities."

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