THE BOURSE WHISPERER: Laconia Resources (ASX: LCR) has signed a Binding Term Sheet to enter into an option agreement to acquire an 80 per cent interest in 5,622 hectares covering 11 exploration licences adjacent to the company’s Rasuhuilca project located in the Andean volcanic arc of southern Peru.
Laconia described the new licences as being similar to its 100 per cent-controlled Rasuhuilca project in that they are the considered to be prospective for epithermal and porphyry style gold-silver-copper.
Location of Laconia’s current project and new earn-in option licence
outlines. Stippled boundaries show areas of intense alteration and
primary exploration targets. Source: Company announcement
The option period is for seven years and involves minimal initial outlay.
“This option to significantly expand our exploration ground in the highly prospective Andean volcanic arc provides Laconia’s shareholders with a unique investment opportunity in one of the world’s premier metal provinces and further solidifies the company’s near-term development position at Rasuhuilca,” Laconia Resources managing director Ian Stuart said in the company’s announcement to the Australian Securities Exchange.
Laconia will earn the 80 per cent interest in the Licences once the Option Agreement has been exercised it has completed undertakings outlined in the Binding Term Sheet.
This includes payment of the final option exercise payment and completion of a Detailed Feasibility Study.
Terms of the Binding Term Sheet include:
– Up front consideration of US$150,000 comprising US$60,000 paid upon execution of the Binding Term Sheet and the balance of US$90,000 payable upon execution of a formal Option Agreement;
– Five annual option payments to the Vendors of a minimum of US$250,000 and maximum of US$300,000 commencing in 2014, calculated by an agreed mechanism linked to the degree of the positive percentage increase in the price of gold;
– The remaining 20 per cent interest in the Licences held by the Vendors will be free carried until completion of a Detailed Feasibility Study;
– Final option exercise payment to acquire the 80 per cent interest of a minimum of US$5M and a maximum of US$6M, calculated by an agreed mechanism linked to the degree of the positive percentage increase in the price of gold;
– Post-acquisition the Vendors will retain a 2.5 per cent net smelter royalty; and
– Laconia is to spend $1.3M per annum towards exploration on the Licences commencing in 2015 for four consecutive years;
The formal Option Agreement will be subject to all necessary regulatory approvals.