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Lachlan Star gains CMP Gold Trust as substantial holder

Lachlan Star (ASX: LSA) has a new substantial shareholder in the CMP Gold Trust, with the trust now holding a 10.2% stake in the company on the conversion of special warrants to shares.

The warrants were part of a recent capital raising exercise by Lachlan Star which included 16 million special warrants at A$0.82 to raise A$13.12 million, with a second component a one-half purchase warrant for an additional share at A$1.20.

Lachlan Star in another major plus for the company also recently announced it has the potential to maximise economic returns from low grade gold mineralisation that is currently mined as waste at its wholly owned CMD Gold Mine in Chile with the delivery of initial results of a large scale trial of run of mine dump leaching.

Currently there is a large amount of gold mineralisation between 0.15 grams per tonne (g/t) gold and the current mineral reserve cut-off grades of around 0.3g/t gold that is currently mined and sent to waste dumps.

If the final results of the trial indicate that the material is economic to process, there is significant potential for the CMD Gold Mine to increase gold production at reduced waste to ore ratios.

September quarter produces 10,330 ounces

In the September quarter Lachlan Star produced 10,330 gold ounces, with over 886 ounces in inventory, with the C1 cash cost of US$953 per ounce, (inclusive of US$198 per ounce non cash process inventory adjustment, US$755 per ounce pre inventory adjustment).

The CMD Gold Mine Gross operating profit was US$4.08 million for the period, with the cost per tonne of ore being reduced 23% (period on period) to US$19.82. Importantly - the average gold sale price was US$1,713 per ounce.

The CMD Gold Mine
Lachlan Star has a JORC Probable Reserve of; 5.8 million tonnes at 0.8g/t gold for 157,000 ounces. The total JORC Resource is 1.4 million gold ounces.
CMD is an open pit heap leach gold mine that commenced production in 1995 and has historically produced around 830,000 gold ounces.  The company has an unhedged production of around 45,000 gold ounces annually, and is targeting 75,000 ounces for 2012.