Laconia makes move to Peru

THE BOURSE WHISPERER: Perth-based Laconia Resources has reached an agreement to acquire the Rasuhuilca project, an advanced gold-silver development project in Peru.

The project has been acquired from Gold Mines of Peru and as part of the transaction, Laconia will also pick up GMP’s other Peruvian projects, the Motil and Porcuchia gold-silver tailings projects.


Projects location map. Source: Company announcement

Consideration for the acquisition consists of:

–    42.055 million ordinary Laconia shares;

–    14.5 million performance shares;

–     $120,000 paid over 6 months to a third party;

–    $500,000 from production revenue only if production revenue is reached within 5 years; and

–    Dr Saliba Sassine, the chairman of Gold Mines of Peru, will join the Laconia Board on successful completion of Laconia’s due diligence.

The acquisition is subject to shareholder approval and a number of other conditions precedent normally associated with acquisitions of this type.

The Rasuhuilca project is a high grade gold and silver project.

Laconia described the project as having outstanding near-term development potential and major exploration upside.

A Deasibility Study was completed on the project in June 2008.

“Laconia will seek to update and re-affirm the Feasibility Study, and aims to bring the project into production as a high grade, small tonnage mining operation in 12 to 18 months,” Laconia Resources said in its ASX announcement.

“The company’s strategy is to utilise the significant potential revenues from the project to unlock the major exploration upside at the Rasuhuilca project area, and add additional resources to the project.”

The best developed mineralised body in the project, as it currently stands, is the Rasuhuilca zone.

According to Laconia this has been subjected to exploration activity by way of underground development.

This has occurred over the zone’s central 250m long portion where a vertical extent of at least 180m reaches a thickness ranging from 17m to 40m in a steeply south-plunging shoot.

Average grades returned from underground channel sampling have been in the vicinity of about two grams per tonne gold and 185 grams per tonne gold.

“The reliance on historical data used in the estimate and the lack of independent QAQC data resulted in reporting of the Rasuhuilca zone, as an Inferred Resource,” Laconia said.

“Once independent sampling has been completed to confirm the tenor of the historic data, it is envisaged that the confidence in the resource will be upgraded so that it can be used as the basis for mine planning activities.”

Laconia said it considers there to be potential to increase the current resource base at Rasuhuilca and on other targets along strike.