Option Agreement Completed With Malbex Resources For The Grace Project
August 16, 2011 (TSX Venture: LRA) - Lara Exploration Ltd., (“Lara” or the “Company”) is pleased to report that it has completed an Option Agreement (“the Agreement”) with Malbex Resources Inc. (TSX Venture: MBG, “Malbex”) on the Company’s Grace Project in Ayacucho Region of southern Peru. Under the terms of the Agreement, Malbex can earn up to a 75% interest in the Grace Project by investing $11.5 million in exploration, paying $1.7 million in cash and common shares of Malbex to Lara and delivering a Pre-Feasibility Study as defined by National Instrument 43-101 within seven years as follows.
Malbex can earn an initial 55% interest in the Grace Project by investing $3.5 million in exploration and paying Lara $700,000 in cash and common shares over three years as outlined in the following table.
| First Option to Earn a 55% Interest in the Grace Project | ||||
| Date | Cash payment ($) | Share payment ($) | Exploration spend ($) | Drilling metres (m) |
| Signing | 100,000 | 100,000 | ||
| Year-1 | 100,000 | 100,000 | 600,000 | |
| Year-2 | 150,000 | 150,000 | 1,200,000 | 1,500 |
| Year-3 | 1,700,000 | 2,000 | ||
Malbex can then elect within 60 days to give notice to Lara that it wishes to earn an additional 20% interest (for an aggregate 75%) by investing a further $8 million in exploration, paying $1 million in cash and shares to Lara and completing a Pre-Feasibility Study as outlined in the following table.
| Second Option to Earn a 20% Interest (total 75%) in the Grace Project | ||||
| Date | Cash payment ($) | Share payment ($) | Exploration spend ($) | Drilling metres (m) |
| Notice | 125,000 | 125,000 | ||
| Year-1 | 125,000 | 125,000 | 2,000,000 | |
| Year-2 | 2,000,000 | |||
| Year-3 | 125,000 | 125,000 | 2,000,000 | |
| Year-4 | 125,000 | 125,000 | 2,000,000 | |
The Company’s 100% owned Grace Property is 5,800 hectares in size, covering Tertiary-age andesitic volcaniclastics (lapilli tuffs), cut by brecciated silica bodies and veins with wide quartz alunite and granular silica halos, indicative of a well-preserved high-sulphidation epithermal system. The property also exhibits widespread argillic alteration with patches and disseminations of pyrite. Mineralization and alteration are related to northwest-southeast oriented faulting that is host to the past-producing Vicuñita gold mine (15 kilometres to the northwest). The Grace project and alteration zone arecontiguous with the Apumayo Target to the south, currently being drilled and developed by Minera Andina de Exploraciones S.A.C.
The area of altered rocks outlined by the Company is roughly boot-shaped extending approximately 6.0 kilometres in length by 1 to 1.5 kilometres in width between the Leon Cañana and Piruroyoc peaks, at an altitude between 3,900 and 4,200 metres. Individual silica bodies are up to 1,000 metres in length and up to 200 metres in thick. To date 62 rock chip samples have been collected from the anomaly area and analyzed, 9 of which returned anomalous gold values ranging between 50 and 275 parts per billion (“ppb”) and 8 returned silver values between 0.7 and 7.5 parts per million (“ppm”). The alteration is also locally anomalous in arsenic (14 samples between 798 and 5,122 ppm), mercury (20 samples between 1.16 and 12.1 ppm) and antimony (8 samples between 57 and 620 ppm).
For maps and an extended summary of exploration results, please refer to the Company’s website www.laraexploration.com.
Quality Control
Andre Gauthier, Lara’s President, 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.
About Lara
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 and has signed agreements for eleven joint ventures, nine of which are expected to see drilling in 2011. 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 Chris MacIntyre, VP Corporate Development, at +1 416 703 0010.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.