Agreement Signed On The Mantaro Phosphate Deposit In Peru With Sprott Resource Corp.
Lara Exploration Ltd. (“Lara” or the “Company”) is pleased to report it has completed an Exploration and Option Agreement (the “Agreement”) with Sprott Resource Corp. (“Sprott”) to advance the Mantaro Phosphate Deposit (“Mantaro”) in Peru. Mantaro is one of the largest undeveloped phosphate deposits in the Pacific Rim region and provides an excellent opportunity to participate in the expanding market for phosphate-based fertilizers for production of food and biofuels.
The property comprises 3,700 hectares of exploration licenses and claims near Sincos, in the Department of Junín, 200km east of Lima. The deposit was originally discovered and explored in the 1960’s by Cerro de Pasco Corporation, which outlined a mineralized zone extending over 12 kilometres along the Mancaspico syncline. Trench and drill samples returned an average grade of approximately 15% P2O5 (phosphorus oxide) over an average deposit thickness of 24 metres. The deposit dips at approximately a 45 degree angle and is open pittable.
Exploration work resumed between 1998 and 2002, including further trenching and mineral characterization studies, bulk sampling, mineral beneficiation testing and preparation of a prefeasibility study by Bateman Phosphate Technologies. Total phosphate potential in the central portion of the property were estimated at that time to be in the range of 300 million to 750 million tonnes, with a historical “inferred resource” estimate of 61 million tonnes. These estimates are historical data only and do not conform to the resource estimation requirements of NI 43-101. Beneficiation test work conducted by Bateman Phosphate Technologies concluded it was possible to produce a concentrate grading in excess of 32% P2O5 and that the concentrate was amenable to production of phosphate fertilizer.
Lara is part of the Mantaro Group, an unincorporated joint venture that holds the rights to the Mantaro Phosphate Project. Under the terms of the Exploration and Option Agreement, Sprott has the option to acquire a 100% interest in the Mantaro Phosphate Project by funding exploration and technical studies, making certain cash payments and issuing shares in a new project company to the Mantaro Group. Sprott is proposing to undertake exploration work, beneficiation studies and market analysis to develop sufficient data for preparation of an NI 43-101 compliant resource estimate and to complete a prefeasibility study for development of the property. If the results of this work are positive and Sprott exercises its purchase option, Lara will be issued shares in the new listed vehicle equivalent to 10% of the outstanding shares at the time of the Qualifying Transaction (as defined under TSX Venture Exchange Policy). Lara will also be entitled to a 0.5% royalty on any production from the Mantaro Project. Sprott will have the option to purchase this royalty for the equivalent in cash of 0.5% of the Net Present Value of the Project upon completion of a Bankable Feasibility Study.
Michael Bennell, Lara’s Vice President Exploration and a member of the Australasian Institute of Mining and Metallurgy (AusIMM), is a Qualified Person as defined by National Instrument 43-101, and is responsible for the preparation and verification of the technical information in this release.
Lara is a well-funded junior exploration company with projects in Brazil and Peru. Lara’s common shares trade on the TSX Venture Exchange under the symbol “LRA”.
For further information on Lara Exploration Ltd. please consult our website www.laraexploration.com or contact: Miles Thompson, President or Kim Casswell, Corporate Secretary at (604) 669-8777.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.