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Latin Resources Receives Positive Scoping Study, Drives Guadalupito Development

Latin Resources (ASX: LRS) has received a Scoping Study from Ausenco that gives it confidence to continue drilling to upgrade Inferred Resources at its Guadalupito Iron Sands Project in northern Peru to Indicated and Measure categories.

While details of the study were not released due to their basis on an exploration target and Inferred Resources, it has given Latin the impetus to evaluate proceeding with pre-feasibility studies.

Mining would be undertaken in two stages, with the second implemented four years after the first.

Each stage would employ two IHC Beaver Type 500l bucket line dredges (each capable of lifting 1,875 tonnes per hour), and a pumping system that delivers screened dredged material through a floating pipeline to a floating heavy mineral concentrator situated in the dredge pond.

Heavy mineral concentrate from the floating concentrator would be pumped as a slurry to a mineral separation plant where a variety of industry proven processes deliver separate concentrates containing magnetite, andalusite, zircon, ilmenite, rutile and gold respectively.

"The scoping study for Guadalupito gives Latin Resources great confidence pushing Guadalupito forward towards production," managing director Chris Gale said.

"The first phase Scoping Study completed by Ausenco now adds to our JORC inferred resources and this coupled with the excellent access to infrastructure ,water and power allows the next phase of planning to continue for the development of the Guadalupito project."

Scoping Study

The mining scenario developed by Ausenco's Minerals and Metals division uses Snowden's Proof of Concept mining study announced on 17 July 2012 that was based on a conceptual model of up to 2.7 billion tonnes Run of Mine.

This was extrapolated from Latin's maiden JORC compliant Inferred Resource estimate and assumes an average mineable depth of 13.3 metres.

The Study focuses on two areas within Latin's overall 17,500 hectare concession holding: the Blackburn South area comprising 6,269 hectare and Blackburn Central comprising 1,818 hectare.

These are offset 200 metres from the coast line in order to buffer and protect coast waters, reducing the overall study area to 7,520 hectares.

It examines dredge mining and the concentration of a number of target minerals using proven mineral sands mining and processing technology together with overall project infrastructure and logistics at a +/- 35% level of accuracy.

Guadalupito Iron Sands Project

Latin is rapidly advancing its Guadalupito Iron Sands Project in northern Peru, as it aggressively works to define over 1 billion tonnes of Resources at the project by the end of 2012.

Importantly, the company has previously outlined an exploration target at Los Conchales of 690 million tonnes at 6.8% Heavy Mineral within just 6% of Latin's 17,500 hectares of mineral rights at Guadalupito.

Los Conchales represents a major new Heavy Mineral deposit 3 kilometres northeast of the existing 393 million tonnes at 4.5% Heavy Mineral Resource at Guadalupito.

It falls two thirds outside the limits of the Snowden estimate of between 1.1 to 4.4 billion tonnes for the entire Guadalupito project, and has three times the depth extent - and still open at depth - of the Snowden estimate.

This highlights the increasing potential of Guadalupito to become a world class mineral sands project.

This is further evident in recent mineralogical test work confirming that a high iron (62%) and relatively low titanium (4%) magnetite product can be produced from pilot plant style processing on bulk sample composites.

Latin is working on producing a high purity andalusite concentrate, and to date all indications are that this type of concentrate should have impurities well below even the lower limits of andalusite sold in existing markets.

What this means is that with both magnetite and the higher value andalusite dominating the Heavy Mineral assemblage, revenues will be substantial.

Continuing infill drilling is targeted at upgraded the conceptual exploration target into an Inferred Resource at Tres Chosas and Heldmaier by the end of the year.

Guadalupito is located 25 kilometres north of Chimbote, home to a major port and one of the largest steel smelters in Peru.

Access to Chimbote would be via the Pan-American Highway which runs immediately adjacent to the project.

The project also has ready access to water and power, which are within 10 to 20 kilometres of the project respectively.

Analysis

The positive scoping study from Ausenco on Guadalupito provides Latin Resources with a strong mandate to push forward and drillto upgrade inferred resources to indicated and measured categories, and to evaluate proceeding with pre-feasibility studies.

There are significant milestones ahead for value increment for Latin. Not to be forgotten is that substantial shareholder Junefield is sitting on a 19.8% stake in Latin. This provides significant support given the Junefield founder is understood to be "bullish" on Latin's development path.

In all, this provides upside from the the current share price of $0.30 in the next 6-12 months.

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