Lara Converts Its Interest In The Mantaro Phosphate Project To Shares Of Sprott Resource Corp.
Lara Exploration ("Lara" or the "Company") is pleased to report that it has signed a Letter of Intent ("LOI") with Sprott Resource Corp. ("SRC") to sell its future interest the Mantaro Phosphate Project ("Mantaro") for approximately US$3.0 million in common shares of SRC. The proposed transaction is subject to the execution and delivery of a definitive agreement.
Lara is part of the Mantaro Group, an unincorporated joint venture that holds the rights to Mantaro, potentially one of the largest undeveloped phosphate deposits on the Pacific Rim. Under the terms of the option and exploration agreement entered into between SRC and the Mantaro Group on November 15, 2007 (the "Original Agreement") (see November 16, 2007 news release), SRC had the option to acquire a 100% interest in Mantaro by funding exploration and technical studies, making certain cash payments and issuing shares in a new project company to the Mantaro Group. For its share, Lara would have been issued with 10% of the outstanding shares of the new project company at the time of the Qualifying Transaction. Under the terms of the new LOI, Lara will convert its 10% future interest into 1,180,872 common shares of SRC, but retain its right to a 0.5% royalty on any production from Mantaro, which SRC may purchase at its election for the equivalent in cash of 0.5% of the Net Present Value of the Project upon completion of a Bankable Feasibility Study.
Miles Thompson, President and CEO of Lara says: "We are very pleased to crystallise value from our work on Mantaro and to deepen the relationship with SRC. This transaction both strengthens Lara's balance sheet and validates our business model as a multi-commodity Prospect Generator".
About Sprott Resource Corp.
SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. SRC is well positioned to draw upon the considerable experience and expertise of both its Board of Directors and Sprott Consulting Limited Partnership (SCLP), of which Sprott Asset Management Inc. is the sole limited partner. Pursuant to a management services agreement between SCLP and SRC, SCLP provides day-to-day business management for SRC as well as other management and administrative services.
About Lara Exploration Ltd.
Lara is a natural resource prospect generator, with multi-commodity exploration portfolio 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 news release