Lara Options Its Corina Gold Property To Consorcio Minero Horizonte S.A., A Private Peruvian Gold Mi
Vancouver B.C. May 4th, 2010 (TSX Venture: LRA) – Lara Exploration Ltd. (“Lara” or “the Company”) is pleased to announce that it has entered into an option agreement with Consorcio Minero Horizonte S.A. (“Horizonte”) by granting them an option to acquire up to an 80% interest in the Corina Gold Property (the “Corina Property”) by paying Lara US$700,000 in cash, completing US$8,500,000 of exploration and feasibility work and paying Lara a sliding-scale royalty. Horizonte is a Peruvian based privately-owned gold producer.
Andre Gauthier, President of Lara commented, “We are very happy to have completed this transaction with Horizonte. The company is an established gold producer with an excellent knowledge of Peru, and a reputable production record, which it is trying to aggressively advance by investing in high quality projects.” He added, “Lara is looking forward to the start of the first phase of field exploration on the project, which is located in a famous gold and silver producing camp. The Corina Property is highly prospective for low sulphidation epithermal gold mineralization”.
Felix Navarrau Grau, President and CEO of Horizonte commented, “We strongly believe that the Corina Property has the potential to help Horizonte to pursue its objectives. Horizonte will start working in the field as soon as possible. It already has a team of professionals in place”.
|Cash Payments to Lara||US$|
|Upon signing Definitive Agreement||200,000|
|Phase 1: 18 Months (Commited)||500,000|
|Phase 2: 18-36 Months||1,000,000|
Horizonte will have a first option to earn a 65% interest in the Corina Property by making cash payments of US$700,000 to Lara and completing not less than US$1,500,000 (US$500,000 committed) in exploration expenditures over a three-year period, with at least US$300,000 of the Phase 1 program and US$500,000 of the Phase 2 program being spent on drilling.
Subject to completion of the first option, Horizonte would have 60 days in which to elect to invest a further US$7,000,000 over five years on feasibility work to earn an additional 15% interest (for an aggregate 80%) in the Corina Property.
Lara will retain the right to a Net Smelter Return Royalty (“NSR Royalty”) on all gold and silver produced in excess of 1.5 million ounces equivalent. This NSR Royalty will vary according to the following gold prices:
|Gold Price US$/Troy ounce||NSR Royalty|
|Less than $500/oz||Nil|
|$500 to $700/oz||1.0%|
|Greater than $700/oz||1.5%|
The Corina Property is comprised of seven mineral rights currently held by a Lara subsidiary, Maxy Gold Peru, together with additional land staked in cooperation with Horizonte. The Corina Property is located in the districts of Juan Espinoza Medrano and Cotaruse, province of Antabamba, department of Apurimac, of southern Peru, with an approximate area of 5,768.83 hectares.
The Corina Property has been little worked by Lara but it is located in a tertiary volcanic rock package that is famous for hosting many low and high sulphidation gold deposits such as Liam, Selene, Pallancata and Antapite. A surface auriferous low sulphidation epithermal vein (Promesa) has been traced over 4.5 km long with gold values reaching up to 6.7 g/t Au. The structures cut dacite and rhyolite pyroclastics, as well as a rhyolite dome and entering to the east to the basal sedimentary sequence made up by brecciated and mineralized sandstones. The structures show high potential for exploration both laterally and at depth due to very little erosion.
Andre Gauthier, Lara’s President and CEO, a member of the Quebec Order of Engineers, is a Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects and is responsible for the preparation and verification of the technical information in this release.
Lara is an exploration company following the Prospect Generator business model, which aims to minimize shareholder dilution and financial risk by generating prospects and then exploring them in joint ventures funded by partners. The Company currently holds a diverse portfolio of prospects and deposits in Brazil, Peru, Colombia and China. Lara’s common shares trade on the TSX Venture Exchange under the symbol “LRA”.
About Consorcio Minero Horizonte
Horizonte is dedicated to exploration, exploitation and the metallurgy of gold, and owns the Parcoy mine in the Pataz batholith, located at Pataz province, La Libertad department of northern Peru. The main objective of Horizonte is to increase its current gold reserves to maintain sustainable mining production. Horizonte produced 161,018 ounces gold in 2009, with an accumulated production of 2.004 million ounces gold accounted from 1990 to 2009. For 2010, Horizonte has budgeted an amount of 220,000 ounces, production that will come from the Pataz and Untuca mines.
For further information on Lara Exploration Ltd. please consult our website www.laraexploration.com or contact: Miles Thompson – CEO, or Andre Gauthier – President, at 604-669-8777.
Julia Maxwell - 604-669-8777
Chris MacIntyre – 416-640-1932
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada
accepts responsibility for the adequacy or accuracy of this release.