Laconia Resources' (ASX: LCR) has acquired an option which will provide the company complete access to the entire Jarhuarazo volcanic alteration system in southern Peru - which is highly prospective for copper, gold and silver.
Laconia has negotiated and signed a formal option agreement to add 80% of 5,622 hectares adjacent to its wholly-owned Rasuhuilca Project which is an advanced, high grade gold and silver project which contains existing development levels and cross-cuts - located in the Andean volcanic arc.
The Option Agreement is for seven years and involves minimal initial outlay, for an indirect 80% interest over 11 additional exploration licences.
Importantly, the new licences are considered highly prospective for Epithermal and Porphyry style Copper-Gold-Silver, and are similar to the high-grades at Rasuhuilca.
Highlighting the prospectivity of the area, recently announced historical adit channel sampling at Española 1 Prospect includes: 24.9 metres at 3.88% copper, 2.98g/t gold and 66.63g/t silver, including 15.5 metres at 6.54% copper, 4.77g/t gold and 103.86g/t silver.
Ian Stuart, managing director for Laconia, commented on the outcome: "The signing of this Option Agreement significantly expands our exploration ground in the highly prospective Andean volcanic arc, where we recently announced high-grade copper results which have subsequently seen the Company expand its exploration model to include an El-Indio style copper-gold porphyry system.
"Following on from these results, it is a great outcome for Laconia to have secured the entire volcanic system as the Company believes this area demonstrates significant potential to host epithermal and porphyry systems.
"The company looks forward to advancing its exploration for a large Copper-Gold-Silver mineralised system, while concurrently expanding our existing high-grade gold silver resource."
Main terms of the option
Seven year Option Agreement to acquire an 80% ownership interest in Sallka Uno y Dos S.A.C. ("SALLKA") and Andes Exploration of Peru Numero Dos S.A.C. ("ANDES DOS"), the companies holding the 11 Licenses;
- The Option Agreement is subject to the following conditions precedent: (i) Sallka formalizing its 100% ownership title over 2 of the 11 Licenses before May 31, 2013; and (ii) ANDES DOS formalizing its 100% ownership title over 9 of the 11 Licenses;
- Up front consideration of US$150,000 comprising US$60,000 paid to date leaving a balance of US$90,000 due by the date in which the conditions precedent are fulfilled.
- Five annual option payments to the Vendors for a minimum of US$250,000 and maximum of US$300,000 calculated by an agreed mechanism linked to the degree of the positive percentage increase in the price of gold. The first annual payment is due in March 2014;
- Final option payment of a minimum of US$5M and maximum of US$6M to acquire 80% ownership interest, calculated by an agreed mechanism linked to the degree of the positive percentage increase in the price of gold;
- Post-acquisition, the Vendors to retain 2.25% net smelter royalty;
- Laconia is to spend $1.3M per annum of exploration over the 11 Licences. The first expenditure commitment is due by mid-2015; and
- Laconia is to manage and operate the exploration program.
Laconia's Peruvian portfolio has now increased to an extensive 8,387 hectares, with today's option agreement covering 5,622 hectares next to the company's wholly-owned Rasuhuilca Project.
Rasuhuilca is developing into a 'company maker' for Laconia, with a resource update due in coming months which could add to the current resource of; 360,000 tonnes at 1.97g/t gold and 179g/t silver (at a 2.5 g/t gold-equivalent cut-off).
Laconia also recently announced five additional Exploration Targets of 365,000 tonnes to 792,000 tonnes at 2.4-3.1g/t gold and 84.9-122.4g/t silver at vein systems within Rasuhuilca adding significant potential to the project.
Now with the new option agreement, Laconia has secured a vastly increased exposure in this promising area.
While it is still early days, Laconia has made great strides at Rasuhuilca - and the surrounding area - in just nine months since acquiring the project in June 2012.
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