Sergipe Potash Project

The Sergipe Potash Project comprises two separate license blocks, with a total area of 21,483 hectares, which cover strike extensions of the known potash deposits in Vale’s Taquari-Vassouras Mine. The license blocks are also contiguous with the Capela and Panqueca targets held by Rio Verde Minerals Ltd. (“TSX: RVD, “Rio Verde”). A significant amount of exploration data is available on the Project from the oil and gas industry, which includes geological and geophysical data from 11 oil wells. Two of these wells intersected a cumulative 37 and 5 metres of potash mineralization respectively, in ten and two individual potash-bearing horizons, at depths between 1,300 and 1,800 metres. Furthermore, data is available for at least 30 2-D seismic lines over the Project.

On December 7, 2009 the Company entered into an Agreement with Talon Metals Corp. (TSX: TLO), whereby Talon can earn up to a 75% interest in the project by funding exploration and making cash payments to Lara. In order to earn its interest, Talon must pay Lara US$0.5 million in cash (US$200,000 paid to date), undertake a minimum US$4 million exploration work program over four years and deliver a Resource Report on the projects by late 2014. Talon will be the operator of the work programs, which must include at least five drillholes targeting potentially economic potash-bearing evaporite sequences within Lara’s licenses.

In 2011, Talon transferred its potash projects and the JV with Lara to Rio Verde Minerals Ltd. (“TSX: RVD, “Rio Verde”). In order to keep the agreement in good standing, Rio Verde must complete a drill hole targeting the potash horizons on Lara properties and pay US$100,000 to Lara in 2011.