Curionopolis IOCG Project

The Company’s Curionópolis IOCG Project covers 16,452 hectares and is located in the prolific Carajás District, approximately 10 kilometres south of the Serra Pelada gold project being developed by Colossus Minerals Ltd.

The Company is currently conducting exploration programs for iron ore (Vertical JV), copper and gold on the property. The mineralization identified at Curionópolis is IOCG-type (iron oxide copper gold), typical of the Carajás District. Gold and copper values are accompanied by geochemically anomalous arsenic, silver, bismuth, tungsten, molybdenum and uranium. Geology of the target areas are metamorphosed volcano-sedimentary sequences with wide-spread magnetite and actinolite veining, as well as pervasive actinolite, albite and scapolite alteration that also typical of IOCG systems.

Copper-Gold Exploration

The Company has completed stream sediment sampling throughout the property, identifying several high priority gold and copper anomalies in -80# sediment samples, with the Chico Target to the northwest of the town of Curionópolis reporting the best results, 443 parts per billion gold (“ppb Au”), 733 parts per million copper (“ppm Cu”) with geochemically anomalous bismuth (max. 84 ppm), molybdenum (max. 24 ppm) and tungsten (max. 23 ppm). The Osmar target, with known small-scale copper workings, showed higher gold values with a maximum of 2,945 ppb Au but copper results were somewhat lower with a maximum of 154 ppm Cu from stream sediment sampling.

Lara’s geologists have so far completed follow-up soil sampling and rock chip sampling over an area of approximately four kilometres by three kilometres on the Chico target zone, identifying more than twelve north-west or north-northeast oriented, sub-vertical auriferous quartz-iron-oxide veins and breccias dominated by hematite and magnetite. The rock chip sampling indicates that veins on this trend are gold-rich with anomalous values of copper, silver, molybdenum and locally tin. Individual veins vary from a few tens of meters to several hundred meters in strike length and locally form a sheeted vein system. To date only reconnaissance rock chip sampling has been completed, with the best result of 8.6 g/t Au over 2.5 metres from the main Chico working. Rock chip grab samples from veins and rock dumps at other current and abandoned small-scale workings indicate gold values up to a maximum of 24.78 ppm Au. Vein textures are suggestive of a high-level epithermal vein emplacement.

On the two kilometre long Osmar target, located to the west of Curionópolis, ten north- or northeast orientated breccia veins with oxidized copper and gold mineralization have been identified and many are being partially exploited on a small-scale by artisanal miners (“garimpeiros”). Orientation -80# soil gridding has been carried out with the best soil values of 10,000 ppm Cu and 406 ppb Au. Copper and gold soil anomaly zones are generally co-incident and many of the highest values are closely related to the presence of known copper veins. The copper-in-soil anomalies generally show a greater aerial extent than for gold. The best rock chip sample, taken from one of the exposed veins with secondary copper mineralization reported 1,576 ppb Au and 18.9 % Cu. Soil sampling has also identified further anomalous copper zones 2 kilometres to the west and to the southwest of the Osmar target.

Iron Ore Exploration:

The central part of the Curionópolis Property covers iron formations that are a mixture of massive hematite-rich material and silica-hematite banded iron formations that extend for approximately 10 kilometres and rise over 100m above the surrounding topography. Surface work has so far confirmed the presence of iron mineralization along most of the 10 kilometres of strike length within the property.

To date 17 diamond drillholes have been completed on the Serra Morena target, from which a preliminary mineral resource is being calculated. Significant intervals and grades of iron mineralization have been intercepted in most of the drill holes (see Table 1).

Terms of the Curionópolis Agreement:

The Company’s Curionópolis IOCG Project covers 16,452 hectares, 7,781 hectares of which is 100%-owned and 8,671 hectares is subject to the Curionópolis Option Agreement.

Under the terms of the Curionópolis Option Agreement, Lara may acquire 100% of the Curionópolis Property from Redrock Exploration (BVI) Ltd., ("Redrock") and its Brazilian subsidiaries for US$ 630,000 in cash payments and US$2.7 million in exploration expenditures (staged over three years) and royalties. The royalties comprise a 50% net profits interest ("NPI") on income derived from the sale of iron or iron mining rights and a 2% net smelter return royalty ("NSR") on any other metals produced. Lara has the option to acquire half of the NSR (i.e. 1%) for US$ 1.5 million in cash. 

As foreseen in the above agreement, the iron formations within the Curionópolis Property are being ceded to Vertical Mineração Ltda., (“Vertical”) a special purpose company, owned by a group of local iron producers. Under the terms of the agreement with Vertical, Lara is ceding approximately 1,365 hectares of the Curionópolis Property to Vertical in exchange for US$1.4 million in cash payable over two years, US$3.0 million in exploration expenditures over a three year period and a $3/tonne to $4/tonne royalty payment on any lump iron-ore production.

Lara is entitled to 50% of the cash and royalty payments paid by Vertical and will be the operator during the exploration phase of the project. Lara also retains the rights to any discoveries of non-ferrous metals within the ceded area. The agreement with Vertical also reduces by half Lara’s work commitment on the remaining property.

The Carajás District:

The Carajás is one of Brazil's most prolific mining districts, with Vale S.A. producing >100 million tonnes per annum of high-grade iron ore. The Carajás District is also an emerging IOCG copper province of considerable importance with five IOCG deposits discovered to date: Sossego, Salobo, Alemão, Km-118 and Cristalino. Sossego is currently producing approximately 140,000 tonnes per year of copper in concentrates while Km-118 is expected to start production of copper metal in 2010 and Salobo is slated to start producing in 2011.