Lara Exploration Ltd.: Option Granted to Malbex Resources for 75% of the Grace Project, Peru
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/16/11 -- Lara Exploration Ltd. (TSX VENTURE: LRA) ('Lara' or the 'Company') is pleased to report that it has entered into an Option Agreement ('the Agreement') with Malbex Resources Inc. (TSX VENTURE: MBG) ('Malbex') on the Company's Grace Project in Ayacucho Region of southern Peru. Under the terms of the Agreement, Malbex can earn up to a 75% interest in the Grace Project by investing US$11.5 million in exploration, paying US$1.7 million in cash (of which one-half may be satisfied by issuing common shares of Malbex) to Lara and delivering a Pre-Feasibility Study as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects, within seven years as follows.
Malbex can earn an initial 55% interest in the Grace Project by investing $3.5 million in exploration and paying Lara $700,000 in cash and common shares over three years as outlined in the following table.
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First Option to Earn a 55% Interest in the Grace Project
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Cash Share Exploration Drilling
Payment Payment Commitment Metres
Date ($) ($) ($) (m)
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Signing 100,000 100,000 - -
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Year-1 600,000
100,000 100,000 (firm commitment) -
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Year-2 150,000 150,000 1,200,000 1,500
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Year-3 - - 1,700,000 2,000
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Malbex can then elect within 60 days to give notice to Lara that it wishes to earn an additional 20% interest (for an aggregate 75%) by investing a further $8 million in exploration, paying $1 million in cash and shares to Lara and completing a Pre-Feasibility Study as outlined in the following table.
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Second Option to Earn a 20% Interest (total 75%) in the Grace Project
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Cash Share Exploration Drilling
Payment Payment Commitment Metres
Date ($) ($) ($) (m)
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Notice 125,000 125,000 - -
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Year-4 125,000 125,000 2,000,000 -
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Year-5 - - 2,000,000 -
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Year-6 125,000 125,000 2,000,000 -
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Year-7 125,000 125,000 2,000,000 -
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The Company's 100% owned Grace Property is 5,800 hectares in size, covering Tertiary-age andesitic volcaniclastics (lapilli tuffs), cut by brecciated silica bodies and veins with wide quartz alunite and granular silica halos, indicative of a well-preserved high-sulphidation epithermal system. The property also exhibits widespread argillic alteration with patches of disseminated pyrite. Mineralization and alteration are related to northwest-southeast oriented faulting that is host to the past-producing Vicunita gold mine (15 kilometres to the northwest). The Grace project and alteration zone are contiguous with the Apumayo Target to the south, currently being drilled and developed by Minera Andina de Exploraciones S.A.C.
The area of altered rocks outlined by the Company is roughly boot-shaped extending approximately 6.0 kilometres in length by 1 to 1.5 kilometres in width between the Leon Canana and Piruroyoc peaks, at an altitude between 3,900 and 4,200 metres. Individual silica bodies are up to 1,000 metres in length and up to 200 metres in thick. To date 62 rock chip samples have been collected from the anomaly area and analyzed, 9 of which returned anomalous gold values ranging between 50 and 275 parts per billion ('ppb') and 8 returned silver values between 0.7 and 7.5 parts per million ('ppm'). The alteration is also locally anomalous in arsenic (14 samples between 798 and 5,122 ppm), mercury (20 samples between 1.16 and 12.1 ppm) and antimony (8 samples between 57 and 620 ppm).
For maps and an extended summary of exploration results, please refer to the Company's website www.laraexploration.com.
Qualified Person, Quality Control and Quality Assurance
Andre Gauthier, Lara's President, a member of the Quebec Order of Engineers, is a Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects and is responsible for the preparation of and has verified the technical information in this release.
The Company follows industry standard quality assurance and quality control procedures for all its samples, under the supervision of Noel Diaz, General Manager Peru.
About Lara
Lara is an exploration company following the Prospect Generator business model, which aims to minimize shareholder dilution and financial risk by generating prospects and then exploring them in joint ventures funded by partners. The Company currently holds a diverse portfolio of prospects and deposits in Brazil, Peru, Colombia and China and has signed agreements for eleven joint ventures, nine of which are expected to see drilling in 2011. Lara's common shares trade on the TSX Venture Exchange under the symbol 'LRA'.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Lara Exploration Ltd.
Chris MacIntyre
VP Corporate Development
1 416 703 0010
info@laraexploration.com
www.laraexploration.com