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Mansfield Minerals Granted Permit to Mine Gold in Argentina

Mansfield Minerals Inc. (TSX VENTURE:MDR) is pleased to announce it has received notice from the Salta Provincial Government that it has granted the environmental permit (DIA, Declaracion de Impacto Ambiental) allowing the Company to develop the Lindero open pit, heap leach gold mine. This is the primary permit required for project development. Lindero is the first bulk tonnage open pit gold deposit to be permitted in Salta Province.

Work on the bankable feasibility study is ongoing with completion anticipated by Q1 - 2012.

Different production options are being assessed from a standard 10 year life of mine production plan to more selective mining approaches that would allow for initial processing of higher grade ore at reduced throughput, to reduce initial capital cost, followed by scaling up of the operation utilizing the early project cash flow. This strategy, if pursued, would reduce the initial project financing requirement and the associated capital risk and payback period. On completion of the bankable feasibility study in early 2012, Mansfield believes the deposit could progress to production by Q4 – 2013.

The ongoing feasibility study followed completion of a NI 43-101 compliant pre-feasibility study for Lindero by AMEC Americas Limited and Kappes Cassiday & Associates in March 2010. Highlights from the pre-feasibility study (see the Company's March 22, 2010 press release) included:

  • Measured and indicated resources at 0.20 g/t cut off grade of 2.20 million oz plus inferred resources of 0.75 million oz
  • Proven and probable reserves at 0.19 g/t cut off grade: 1.92 million oz
  • Gold production (average, first five years) of 161,000 oz/year of gold at cash cost of US$373/oz
  • Average life of mine (average, 11 years) gold production of 124,000 oz/year at cash cost of $407/oz
  • Capital costs: $213 million initial plus $15 million sustaining, or $168/payable oz
  • Pre-tax NPV (6%, $1,100/oz gold): $416 million
  • IRR ($1100/oz gold): 44.1%

Notes:

  1. CIM definitions were followed for estimation of Mineral Resources and Mineral Reserves.
  2. Mineral Resources were constrained within an economic open pit shell, generated using a gold price of US$890 per ounce of gold, a processing cost of $3.07 per tonne, a mining cost of $1.10, a sales cost of $12 per ounce and a metallurgical recovery of 70%.
  3. Mineral Reserves are estimated using a cut-off grade of 0.19 g/t Au, based on a gold price of US$775 per ounce.
  4. Mineral Resources are inclusive of Mineral Reserves.
  5. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

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