White Foil Set to Become La Mancha's Fourth Producing Mine

All amounts are in CA dollars, unless otherwise indicated.
La Mancha Resources Inc. (TSX: LMA), hereinafter "La Mancha" or the "Company") is pleased to announce the completion of a positive feasibility study for Phase 1 of its 100%-owned White Foil gold project in Australia. As the first phase of the project is already fully permitted and requires minimal development, White Foil is expected to start production of 76,000 ounces of gold as soon as a satisfactory milling agreement is signed.

Feasibility work was prepared by La Mancha with two main objectives: A) resume production at White Foil as soon as possible, and B) minimize the required initial investment.

The assumptions used for feasibility work include the conclusion of a milling agreement for a capacity of up to 400,000 tonnes per year and taking advantage of the current good availability of contract mining services in the Kalgoorlie area.

Highlights of the study include:

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                    White Foil Feasibility Study
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Production:
Tonnage:  Ore (tonnes)                                        980,000
          Waste (tonnes)                                    1,770,305
          Total (tonnes)                                    2,747,229
Average grade (g Au/t)                                           2.41
Gold reserves (in situ)                                     76,000 oz
Metallurgical recovery                                          91.0%
Gold recovered                                              69,160 oz
Annual production rate                                      30,740 oz
Mine life (Phase 1)                                        2.33 years
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Financials(i):
Initial capital cost                                             1.3M
Cash costs per ounce                                        US 480/oz
Net Present Value @ 6% discount                             CAD 22.0M
Net Present Value @ 6% discount per share              CAD 0.15/share
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(i) All financial calculations are based on a gold price of US $810/oz and a USD/AUD exchange rate of 1.50 and exclude costs incurred prior to 2009.

While management remains convinced that the best way to maximize gold production from White Foil demands the construction of a plant on the property, the time associated with this option makes it less productive in terms of short-term cash flow generation. Therefore, management decided to split the potential of White Foil into two distinct phases. The Company intends to use the expected cash flow from the first phase of the project to continue developing its Australian properties.

"With Frog's Leg growing into a solid cash flow generator and the first phase of White Foil about to consolidate La Mancha's operations in Australia, the Company is gaining the momentum required to achieve its objective of developing a pre-eminent mining complex on its Kalgoorlie properties. We intend to take advantage of this momentum to assemble the financial resources required for our second phase of development in the region. The development of the geological potential of our Park Dam properties, co-owned with Barrick, and of our own milling capacity therefore become the next major steps in our growth in Australia," stated Michel Cuilhe, President and CEO of La Mancha.

MINERAL RESERVES

The White Foil mineral reserves as per the Phase 1 feasibility study are as follows:

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W
hite Foil Reserves Table(i)              Tonnes     Grade     Ounces
(as of December 31, 2008)
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PHASE 1        Proven reserves                 0      0.00          0
PIT            Probable reserves         980,000      2.41     76,000
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  Proven and probable reserves           980,000      2.41     76,000
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(i) Reserves were calculated using a gold price of AUD1,215 and a
    cut-off grade of 1.2 g Au/t.

The White Foil open pit commenced production in 2002 and produced 120,000 ounces of gold before operations were suspended a year later due to excessive flow of saline water into the pit. Following its acquisition by La Mancha in 2006, the pit was fully dewatered, and the drilling program that followed increased the Measured and Indicated resource on the property to 531,000 ounces of gold. This reserve estimate only considers the first phase of mining of the project and corresponds to the recommencement of mining operations from the floor of the existing pit in accordance with the original pit design. This explains the low conversion of the overall resource into mineral reserves.

Management considers that the mining envisaged in the Phase 1 feasibility study in no way precludes the possibility of mining a Phase 2 pit (i.e. a cutback of the existing pit crest) at some point in the future. Mining of a Phase 2 pit would eventually result in higher recovery of the White Foil resource.

White Foil's gold mineralization is primarily hosted by a granophyric unit within the gabbroic Kopai Sill. The granophyre is brittle relative to other units within the gabbro and surrounding sediments. The granophyre was preferentially fractured during deformation and folding of the sill, causing dilation and creating a conduit for gold-bearing hydrothermal fluids. Gold is associated with a crosscutting network of quartz veins and fractures within the altered granophyre. Visible gold occurs in some veins.

PRODUCTION

Based on the Proven and Probable reserves table, the Phase 1 feasibility study covers the extraction of 1.0 million tonnes of ore at a grade of 2.41 g Au/t for 69,160 oz recovered over a one-year period.

The White Foil pit will be mined using conventional open-cut mining techniques. All mining will be undertaken by a contractor under the supervision and control of La Mancha. Previous mining of the White Foil open pit was carried out by contractors utilizing a fleet consisting of 110-tonne excavators and 85-90-tonne dump trucks with associated ancillary and drilling equipment. Future mining at White Foil will be conducted with similar equipment. Mining equipment of this size is readily available both for hire and purchase in the Kalgoorlie area.

The toll milling capacity available will likely create a constraint on the mining of the Phase 1 White Foil project. Mining at rates to match available toll milling capacity results in significant underutilization of the mining fleet. The study option runs the mining fleet at optimal efficiency to realize economies of scale and stockpile ore as required, and therefore forces stockpiling of the ore during the first months of operation. While this results in lower cash flow in the initial stages of the operation, overall profit is maximized. Total monthly movement is forecast at 250,000 tonnes per month, with an associated mine life of 11 months.

The White Foil ore is suited to processing in conventional CIP gold treatment facilities. A total of 1.68 million tonnes of ore has been processed in three separate CIP facilities across the Kalgoorlie region. Historical processing saw a reconciled mill grade of 2.43 g/t with recovery at 93.7% for production of around 123,000 oz. Due to the historical treatment of the White Foil ore body and the understanding of the current geological model, the metallurgical performance is well understood and future processing risk should be considered low.

The feasibility study considers ore treatment at a rate of around 35,000 tonnes per month over a 27-month period. This rate is commensurate with the most likely toll milling capacity scenario. All four milling alternatives currently available in the area are being considered by management.

As previously mentioned, White Foil's production remains subject to the conclusion of an acceptable mining and milling agreement.

CAPITAL EXPENDITURE

As previously mentioned, the Phase 1 feasibility study was developed with the intention of taking advantage of favourable mining and milling service offerings in the Kalgoorlie area while minimizing the initial capital investment required to resume production. Consequently, required capital to resume production at White Foil is estimated at $1.3 million, mainly for working capital purposes, and would be entirely financed by La Mancha's internal cash flow.

PROJECT ECONOMICS

Based on the results of the feasibility study and using a gold price of US $810, a USD/AUD exchange rate of 1.50 and a CAD/AUD exchange rate of 1.28, the feasibility study shows a Net Present Value ("NPV") attributable to La Mancha of US $18.7 million (CAD22.0 million equivalent) or US $0.13 per share (CAD $0.15 per share equivalent) at a 6% discount rate.

The sensitivity of the NPV and NPV per share to changes in the gold price and exchange rate assumptions is as follows:

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G
old price (in AUD)              6% NPV     6% NPV         6% NPV
                                (in AUD)   (in CAD)   (in CAD / share)
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910 (USD 700 X 1.3fx rate)      $10.67M     $8.34M       $0.06/share
980 (USD 700 X 1.4fx rate)      $14.69M    $11.48M       $0.08/share
1,400 (USD 1000 X 1.4fx rate)   $38.76M    $30.28M       $0.21/share
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QUALIFIED PERSONS AND DATA VERIFICATION

The independent Qualified Persons (QPs) for the feasibility study, for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects, are: Gary McCrae, BE (Mining), MAusIMM, reviewed the White Foil 7B pit design for the feasibility study. Gary's responsibility included the evaluation of the mining modification factors for the creation of an Ore Reserve from the Mineral Resource.

Elisabeth Haren, Bsc.(Geol) MAusIMM, Principal Resource Geologist, prepared the resource estimate for the White Foil project.

La Mancha Qualified Persons are:

Martin Bennett Bsc. Hons. (Geol.), MSc. (ODG), M.AIG, Exploration Manager of La Mancha Resources Australia, supervised the drilling program and was responsible for quality control and verification of the drill hole data used by La Mancha Resources Australia in calculating the resource estimates. Details of the procedures for logging, sampling, density determinations, assaying and quality control measures are given on La Mancha's web site: www.lamancha.ca; please refer to Investor Info/Technical reports/Frogs Leg Report/Page 39.

Trevor Eddie Bsc.(Geol) MAusIMM, Chief Geologist, La Mancha Resources Australia, conducted the resource estimation and supervised the geostatistical analysis of the drill data.

William F. Plyley, BSc. Met. Eng., AusIMM, Chief Operating Officer of La Mancha Resources Inc., supervised the study and all of the information contained in this release.

The White Foil mineral reserve estimates were evaluated in accordance with definitions and guidelines adopted by the Canadian Institute of Mining, Metallurgy and Petroleum. They have been calculated using a mining reserve cut-off grade of 1.2 g/t, standard dilution parameters applied to the resource based upon empirical knowledge of the White Foil rock conditions and industry standards, mining methods, standard assumptions on pit design made to suit operating equipment parameters and consulting benchmarks.

There are numerous uncertainties inherent in estimating mineral reserves, including many factors beyond the Company's control. Resource estimation is a subjective process, and the accuracy of any resource estimate is a function of the quality of available data and engineering and geological interpretation and judgment. Results from drilling, testing and production, as well as material changes in metal prices subsequent to the date of an estimate may justify revision of such estimates. To the best of La Mancha's knowledge, at the time of estimation there were no known environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant issues that would materially impact on the eventual extraction of the mineral resources. An updated Technical Report will be filed with SEDAR within the next 45 days in accordance with National Instrument 43-101 for mining projects.

The effective date of the mineral reserves is December 31, 2008. To La Mancha's knowledge, the reserve estimates are not materially affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

The updated resource review and estimation conforms to the requirements of NI43-101 and the CIM Best Practices for Estimation of Mineral Resources.

Mr. Eddie, Mr. Bennett, Mr. McCrae and Ms. Haren have read National Instrument 43-101 of the Canadian Securities Administrators ("NI 43-101"). By reason of their education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, they are "qualified person" for the purposes of NI 43-101. Mr. Eddie, Mr. Bennett and Ms. Haren consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

ABOUT LA MANCHA RESOURCES Inc.:

La Mancha Resources Inc. is an international gold producer based in Canada with operations, development projects and exploration activities in Africa, Australia and Argentina. La Mancha's shares trade on the Toronto Stock Exchange (TSX) under the symbol "LMA". For more information, visit the Company's website at www.lamancha.ca.

Caution Concerning Forward-Looking Statements

This press release contains certain "forward-looking statements", including, but not limited to, statements regarding the Company's strategic plans, future commercial production, the potential for the White Foil Project to become La Mancha's fourth producing mine and its potential to start upon the signature of a milling agreement, statements regarding the availability of mining and milling services in the Kalgoorlie area and potential for La Mancha to secure acceptable agreement, statement regarding the size and profitability of the first phase of White Foil and potential for a second phase, statement regarding sales and financial results, development, construction and production targets and timetables, mining costs; statements regarding capital expenditures, development plans, and exploration programs, objectives and budgets; statements regarding the Company's expectations to conclude a toll milling agreement. Forward-looking statements express, as at the date of this press release, the Company's plans, estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with fluctuations in the market price of precious metals, mining industry risks, exploration risks, risks associated with foreign operations, environmental risks and hazards, uncertainty as to calculation of mineral reserves, requirement of additional financing or additional permits, authorizations or licences, risks of delays in construction and production and other risks referred to in La Mancha's 2006 Annual Information Form filed with the Securities Commissions, as well as the Toronto Stock Exchange.

Contacts: La Mancha Resources Inc. Martin Amyot Vice President Corporate Development 514-987-5115 This email address is being protected from spambots. You need JavaScript enabled to view it.

SOURCE: La Mancha Resources Inc.

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