Laconia Resources signs option agreement over new Peru tenements

THE BOURSE WHISPERER: Laconia Resources (ASX: LCR)  has negotiated and signed a formal option agreement, which will result in the company adding 5,622 hectares, covering 11 exploration licences alongside its 100 per cent-owned Rasuhuilca project located in the Andean volcanic arc of southern Peru.

Laconia indicated the new licences to be similar to the high-grade Rasuhuilca project, and that the company considers them to also be prospective for epithermal and porphyry style copper-gold-silver.

 

Location of Laconia’s current Rasuhuilca project and new earn-in option licence outlines. Source: Company announcement

 

“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,” Laconia Resources managing director Ian Stuart said in the company’s announcement to the Australian Securities Exchange.

“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.”

Laconia sad the Option Agreement is for seven years and involves minimal initial outlay.

The company outlined the main terms of the Option Agreement as follows:

• Seven year Option Agreement to acquire an 80 per cent 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 per cent ownership title over 2 of the 11 Licenses before May 31, 2013; and (ii) ANDES DOS formalizing its 100 per cent 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$5 million and maximum of US$6 million to acquire 80 per cent 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 per cent net smelter royalty;

• Laconia is to spend $1.3 million 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 Resources acquired of the Rasuhuilca project in June 2012.

Rasuhuilca is an advanced, high-grade gold and silver project, which Laconia considers to represent development potential in the current high gold and silver price environment.

The Rasuhuilca project currently has an Inferred Resource estimate of 360,000 tonnes at 1.97 grams per tonne gold and 179 grams per tonne silver (at a 2.5g/t gold-equivalent cut-off).