Lara Options The Sergipe Potash Project To Aguia Resources
January 23, 2012 (TSX Venture: LRA) - Lara Exploration Ltd (“Lara” or the “Company”), is pleased to report that it has signed a Letter of Intent (“LOI”) with Aguia Resources Ltd (ASX: AGR, “Aguia”), whereby Aguia may issue up to 15 million shares and carry out $1.5 million of exploration within two years to acquire up to a 100% interest in Lara’s Sergipe Potash Project in northeast Brazil.
Miles Thompson, Chairman and CEO of Lara commented: “Our property packages are adjacent and complementary and we are very excited that Aguia plans to drill in the short term. This deal gives us exposure to a much larger part of this producing and highly prospective potash basin, in addition to Aguia’s very exciting new phosphate discovery in southern Brazil.”
Under the terms of the LOI, Aguia will issue 4 million ordinary shares to Lara upon approval of the transaction by the Australian Stock Exchange (“ASX”), which will be subject to a 12 month hold period and carry out exploration of at least $1,500,000 by the first anniversary of the LOI. The exploration must include at least one drill hole to test the known potash horizons within the Property (to a depth that will result in the targeted Ibura Member of the Muribeca Formation being fully tested). Such exploration is a firm commitment and not optional unless Aguia pays $1,500,000 to Lara . Aguia may issue a further 6 million ordinary shares to Lara on or before the first anniversary of the LOI to earn a 75% interest in the project. Aguia may issue and deliver a further 5 million ordinary shares (free of any restrictions on transfer through the ASX) to Lara on or before the second anniversary of the LOI to acquire 100% ownership and control of the project.
Lara’s Sergipe Potash Project comprises 21,483 hectares of exploration licenses located in Sergipe State, northeast Brazil. The claims are adjacent to and cover the extensions of the potash-bearing sedimentary basins of the Taquari-Vassouras mine (owned by Vale S.A.), which produces approximately 650,000 tons of potash annually. These properties have been explored extensively for oil and gas in the past and a database of seismic surveys and exploration drilling is available through the Brazilian National Petroleum Agency (“ANP”). This ANP data includes eight wells drilled within Lara’s property, several of which intercepted potash, with the best drilled intercept a cumulative 37.6 meters of potash mineralization in ten separate sedimentary units between 1,710 and 1,806 meters depth. Aguia has approximately 68,700 hectares of licenses including blocks that are adjacent and contiguous with those of Lara in the northern part of the basin and blocks covering southern extensions of the basin.
Lara had, at the end of 2009, signed an option for Talon Metals Corp., to earn a 75% interest in the property by paying Lara US$500,000 in cash, completing US$4 million in exploration work, including a minimum of 5 drill holes and delivering a resource report by 2014. In 2011, Talon sold its option to Rio Verde Minerals Development Corp., which focused its efforts in the southern part of the basin and did not fulfill its drilling commitment, returning control of the properties to Lara in January 2012.
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 Standards of Disclosure for Mineral Projects and is responsible for the preparation and verification of the technical information in this release.
Aguia Resources Ltd., is an ASX listed company trading under the symbol AGR, with approximately 99 million shares outstanding, currently trading at around A$0.50/share. Aguia’s primary focus is on the exploration and development of large scale potash and phosphate projects in Brazil. Through its 100 per cent owned subsidiaries Aguia Metais Ltda. and Potassio do Atlantico Ltda., it has an established and highly experienced in-country management team based in Belo Horizonte, Brazil.
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 primarily in Brazil and Peru where it has signed agreements for fifteen joint ventures. 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.