Latin Resources (ASX: LRS) has signed agreements with vendors of the Guadalupito iron and mineral sands project in northern Peru that offsets 70% of its cash payment obligations through to 2017 to subsequent years.
The amendment has allowed Latin to significantly offset a total amount of US$4.9 Million in cash payment obligations due between 2014 and 2017 to subsequent years.
Over this period, the company will also issue a total of 11 million ordinary shares in lieu of US$621,000.00 in
The amendment to the original sale agreement has also added another two additional concessions covering 500 hectares to the original 20 mining concessions in Peru totalling 14,068 hectares.
As part of the amendment Latin has also agreed to increase the Royalty payment to the vendors from 1% NSR to 1.5% NSR.
It will also extend the Royalty to cover all Latin owned mining concessions within 5 kilometres of the limits of the concessions covered by the sale agreement and subsequent amendment.
"Latin is pleased to have reduced the cash payment obligations through what we see are crucial years for feasibility and construction of what we have no doubt is an extraordinary project.
"We expect these reductions will also contribute significantly to attracting a suitable JV partner for the project," managing director Chris Gale.
"Results from the first phase of a new round of test work on composite samples from our billion tonne 'Los Conchales' resource are undergoing final interpretation, and we will be pleased to inform the market of their significance very soon."
Latin had in December 2013 received surface rights covering the 1.073 billion tonne JORC inferred resource at Los Conchales and much of the 4.5Bt conceptual exploration target.
They allow unrestricted and exclusive access to the land overlying the mining concessions for future exploration and development work, including mining: provided other corresponding authorisations and permits are obtained.
Los Conchales resource covers just 1,350 hectares of the Guadalupito project.
It is located in unpopulated desert, adjacent to Panamerican Highway, just 15 kilometres from the Santa River, 25 kilometres by road to Peru's largest steel smelter and 29 kilometres by road to Chimbote Port.
The reduction of cash payments for the Guadalupito Project is expected to contribute to Latin Resources attracting a joint venture partner.
It may also allow the outstanding obligations to be funded by production. This will in turn set the stage for the company to progress development of the project.
There is also another catalyst for Latin with results due from the first phase of a new round of test work on composite samples from Latin's billion tonne 'Los Conchales' resource.
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