Lachlan Star Limited — Capital/Financing Update 2012

Sep 16, 2012

==> picture [191 x 69] intentionally omitted <==

**LACHLAN

STAR
LIMITED**

17 September 2012

**INDICATED

MINERAL
RESOURCE
INCREASED
BY
15%
TO
2.06 MILLION
OUNCES
OF
GOLD
AND
INFERRED
MINERAL
RESOURCES MAINTAINED
AT
1.35
MILLION
OUNCES
OF
GOLD**

• TOTAL
  CONTAINED
  GOLD
  WITHIN
  MINERAL
  RESOURCES
  HAVE
  INCREASED
  BY
  OVER 500%
  WITHIN
  THE
  PAST
  TWO
  YEARS

• ADDITIONAL
  DYNAMIC
  LEACH
  PADS
  BUILT
  TO
  INCREASE
  GOLD
  PRODUCTION

• DELIVERY
  OF
  THE
  OWNER
  MINING
  FLEET
  COMMENCES

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES

Perth,
Western
Australia:
Gold
miner,
Lachlan
Star
Limited
(“Lachlan”
or
the
“Company”)
(ASX
and
TSX:
LSA) is
pleased
to announce
an
updated
and
increased
mineral
resource
for
the
Tres
Perlas
deposit
at
its
100%
owned
CMD
Gold
Mine
in
Chile.

"We
are
pleased
to
report
that
over
the
course
of
less
than
2
years,
our
team
has
managed
to
deliver
in
excess
of
500% growth
in
contained
gold
within
the
CMD
Gold
Mine's
mineral
resource,"
said
Mick
McMullen,
Chairman
of
Lachlan
Star.
“

This
latest
estimate
represents
an
increase
of
278,000
ounces
of
contained
gold
from
the
April
2012
estimate.
The
CMD
Gold Mine
Indicated
mineral
resource
now
contains
2,058,000
ounces
of
gold
and
the
Inferred
mineral
resources
contain
a
further 1,354,000
ounces
of
gold
as
shown
in
Table
1.

Table
1
–
Comparison
of
September
2012
and
April
2012
CMD
Gold
Mine
Global
Mineral
Resource
Estimates

Classification	April 2012 Mineral Resource(koz)	Sept 2012 Mineral Resource(koz)	K Oz’s Change	% Change
Indicated	1,788	2,058	270	15%
Inferred	1,342	1,354	12	1%

Figure
1
illustrates
the
rapid
growth
in
the
CMD
Gold
Mine
global
resource
base
since
the
Company
took
ownership
in December
2010,
as
well
as
the
increasing
confidence
levels
of
the
mineral
resource
estimates.

Figure
1
–
CMD
Gold
Mine
Global
Mineral
Resource
Growth

==> picture [569 x 317] intentionally omitted <==

----- Start of picture text -----

Indicated
and
Inferred
Ounces
of
Gold
in
Mineral
Resources

4.0

3.5

3.0

2.5
Inferred
Ounces

2.0
Indicated
Ounces

1.5

1.0

0.5

-­‐
Dec-­‐10
Jan-­‐11
Feb-­‐11
Mar-­‐11
Apr-­‐11
Jan-­‐12
Feb-­‐12
Apr-­‐12
Sep-­‐12
----- End of picture text -----

**Updated

Tres
Perlas
Mineral
Resource**

The
new
Tres
Perlas
deposit
mineral
resource
contains
1,602,000
ounces
of
gold
in
the
Indicated
category
and
a
further 1,138,000
ounces
of
gold
are
contained
in
the
Inferred
category
as
shown
in
Table
2
which
contains
a
summary
of
the
mineral resources
for
the
CMD
Gold
Mine.

The
increase
in
contained
ounces
has
been
as
a
result
of
a
slight
increase
in
average
grade
(4%)
and
additional
near
surface tonnages
identified
by
drilling
around
the
Mercedes
Hill
area
on
the
edge
of
the
Churrumata
pit.

==> picture [51 x 42] intentionally omitted <==

2

Figure
2
–
View
of
Mercedes
Hill
looking
to
the
West

==> picture [489 x 324] intentionally omitted <==

Mining
of
the
Mercedes
Hill
area
was
commenced
in
September
and
is
expected
to
provide
low
waste
to
ore
ratio
material from
the
December
2012
quarter
onwards.
Progress
to
date
is
shown
in
Figure
3
below.

Figure
3
–Mercedes
Hill
looking
to
the
Southwest
(13
Sept
2012)

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3

**Mineral

Resource
Discussion**

The
latest
mineral
resource
estimate
incorporates
drilling
results
received
post
the
previous
mineral
resource
estimate
in April
2012.

Only
the
Tres
Perlas
mineral
resource
estimate
has
been
updated
at
this
time
as
this
is
where
the
bulk
of
the drilling
has
taken
place
in
recent
months.

The
increase
in
mineral
resources
were
almost
entirely
in
the
Indicated
category,
with
the
CMD
Gold
Mine
Indicated
mineral resources
now
containing
over
2
million
ounces
of
gold.
There
exists
significant
potential
to
continue
to
expand
the
mineral resources
at
the
CMD
Gold
Mine,
in
particular
at
the
Tres
Perlas
deposit
which
is
open
down
dip
and
towards
the
north
east around
the
El
Sauce
area.

The
CMD
Gold
Mine
processes
ore
via
a
three
stage
crush
and
heap
leach
circuit
that
has
been
treating
predominately sulphide
ore
since
1995.
Recoveries
have
averaged
approximately
73%
until
the
introduction
of
the
dynamic
leach
system
in 2011,
after
which
recoveries
have
increased
to
around
75%.
The
majority
of
the
increase
in
the
mineral
resources
to
date
has been
as
a
result
of
infill
drilling
between
and
along
strike
of
historical
pits.
There
is
potential
to
increase
mineral
resources
at depth
by
further
drilling
which
would
be
amenable
to
mineral
processing
through
the
current
sulphide
heap
leach
circuit.

**Mining

Equipment
Purchases**

On
the
12[th] September
2012
the
Company
received
the
first
of
the
new
mining
equipment,
consisting
of
two
WA600
loaders.

==> picture [347 x 217] intentionally omitted <==

Over
the
next
three
months
the
Company
will
take
ownership
of
the
following
equipment:

• Mining
  Fleet
  consisting
  of
  seven
  HD785
  (100
  tonne)
  trucks,
  two
  WA900
  loaders
  and
  ancillary
  support
  equipment;

• Dynamic
  pad
  fleet
  consisting
  of
  seven
  Mercedes
  Benz
  road
  trucks
  to
  be
  utilised
  in
  moving
  material
  between
  the primary
  and
  secondary
  leach
  pads.

This
equipment
will
allow
the
operation
to
decrease
reliance
on
mining
contractors,
improve
efficiency,
increase
throughput and
reduce
unit
costs.

**Additional

Dynamic
Leach
Capacity**

The
Company
recently
expanded
the
dynamic
leach
pad
space,
shown
in
Figure
5,
and
is
currently
stacking
on
this
area.
The additional
space
will
allow
an
increase
in
ore
stacked
from
around
350kt
per
month
to
more
than
450kt
per
month
without impacting
on
the
residence
time
on
the
primary
leach
pad,
allowing
the
operation
to
leach
around
65%
of
the
contained
gold in
approximately
4
months
on
the
primary
leach
before
the
ore
being
moved
to
the
secondary
leach
for
recovery
of
an additional
10%
of
contained
gold.

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4

**Figure

5
–
Additional
dynamic
leach
pad
space
(13
Sept
2012)**

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For
and
on
behalf
of
the
Board

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Mick
McMullen Chairman

For
further
information
please
visit
www.lachlanstar.com.au or
contact:

Mick
McMullen Chairman Lachlan
Star Tel:
+61(0)8
9481
0051 Email: mick.mcmullen@lachlanstar.com.au

Declan
Franzmann Managing
Director Lachlan
Star Tel:
+61(0)8
9481
0051 Email: declan.franzmann@lachlanstar.com.au

==> picture [51 x 42] intentionally omitted <==

5

Table
2
–
CMD
Gold
Mine
Indicated
and
Inferred
Mineral
Resource[1]

	CMD Gold Mine
	Mineral Resources(September 2012)
Deposit	Indicated Inferred
	Tonnes (Mt) Grade (Au) Ounces (kozs) Tonnes (Mt) Grade (Au) Ounces (kozs)
Las Loas(April 2011)	2.9 0.8 73 1.5 0.8 38
Toro(Feb 2012)	17.5 0.6 348 11.6 0.4 135
Tres Perlas(Sept 2012)	130.1 0.4 1,602 99.4 0.4 1,138
Chisperos (April 2011)	1.0 1.1 36 1.4 1.0 43
Total	151.5 0.4 2,058 113.9 0.4 1,354

1. Rep orted
above
0.15
g/t
Au
for
all
except
Las
Loas
and
Chisperos
deposits
which
are
reported
above
0.30
g/t
Au

1. Table
   contains
   rounding
   and
   may
   not sum
   precisely

**About

Lachlan
Star
Limited**

Lachlan
Star
Limited
is
an
emerging
minerals
exploration
and
development
company
headquartered
in
Perth,
Western
Australia.

The
Company
is
focused
on
acquiring
and developing
assets
within
the
gold
and
copper
sectors
within
Australia
and
Chile.
The
company
has
a
board
of
directors
and
management
team
with
an
impressive
track
record of
advancing
resource
projects
through
to
production. Lachlan
Star’s
current
projects
include
a
100%
interest
in
the
CMD
Gold
Mine
in
Chile,
a
100%
interest
in
the
Bushranger
Copper
Project
in
New
South
Wales
(subject
to Newmont
earning
51%)
and
a
100%
interest
in
the
Princhester
magnesite
deposit
in
Queensland.

**Competent

Persons
Statement**

The
information
in
the
news
release
that
relates
to
the
Mineral
Resources
of
Tres
Perlas,
Chisperos,
Las
Loas,
and
Toro
is
based
on
information
compiled
by
David
Slater,
who
is a
Chartered
Professional
Member
of
The
Australasian
Institute
of
Mining
and
Metallurgy.
Mr.
Slater
is
employed
full
time
by
Coffey
Mining
Pty
Ltd.
The
information
in
the
news release
that
relates
to
exploration
results
is
based
on
information
approved
by
Declan
Franzmann,
who
is
a
Chartered
Professional
Member
of
The
Australasian
Institute
of Mining
and
Metallurgy.
Mr.
Franzmann
is
employed
by
Citraen
Pty
Ltd
and
is
an
officer
of
the
Company.
Each
of
Mr.
Slater
and
Mr.
Franzmann
has
sufficient
experience,
which
is relevant
to
the
style
of
mineralisation
and
type
of
deposit
under
consideration
and
to
the
activity
which
he
is
undertaking,
to
qualify
as
a
Competent
Person
as
defined
in
the 2004
Edition
of
the
“Australasian
Code
for
Reporting
of
Mineral
Resources
and
Ore
Reserves”
and
to
qualify
as
a
“Qualified
Person”
under
NI
43-­‐101.
Each
of
Mr.
Slater
and
Mr. Franzmann
consents
to
the
inclusion
in
the
news
release
of
the
matters
based
on
his
information
in
the
form
and
context
in
which
it
appears.

**Caution

Regarding
Forward
Looking
Information:**

This
report
contains
forward-­‐looking
information,
which
is
based
on
assumptions
and
judgments
of
management
regarding
future
events
and
results.
Such
forward-­‐looking information
includes
but
is
not
limited
to
information
with
respect
to
future
exploration
and
drilling,
procurement
of
financing
and
procurement
of
necessary
regulatory approvals.

Forward-­‐looking
information
involves
known
and
unknown
risks,
uncertainties,
and
other
factors
which
may
cause
the
actual
results,
performance
or
achievements
of
the Company
to
be
materially
different
from
any
anticipated
future
results,
performance
or
achievements
expressed
or
implied
by
such
forward-­‐looking
information.
Such
factors include,
among
others,
the
actual
market
price
of
gold,
the
actual
results
of
current
exploration,
the
actual
results
of
future
exploration,
changes
in
project
parameters
as
plans continue
to
be
evaluated,
as
well
as
those
factors
disclosed
in
the
Company's
publicly
filed
documents.
The
Company
believes
that
the
assumptions
and
expectations
reflected in
the
forward-­‐looking
information
are
reasonable.
Assumptions
have
been
made
regarding,
among
other
things,
the
Company’s
ability
to
carry
on
its
exploration
and development
activities,
the
timely
receipt
of
required
approvals,
the
price
of
gold,
the
ability
of
the
Company
to
operate
in
a
safe,
efficient
and
effective
manner
and
the
ability of
the
Company
to
obtain
financing
as
and
when
required
and
on
reasonable
terms.
Readers
should
not
place
undue
reliance
on
forward-­‐looking
information.
Lachlan
Star
does not
undertake
to
update
any
forward-­‐looking
information,
except
in
accordance
with
applicable
securities
laws.

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6