Lara And Antofagasta Form Strategic Alliance To Explore For Copper In Brazil
September 27, 2012 (TSX Venture: LRA) - Lara Exploration Ltd., (“Lara” or the “Company”) is pleased to report that it has entered into a Strategic Alliance Agreement (the “Alliance”) with Antofagasta Minerals S.A. (“Antofagasta”). Under the terms of the Alliance, Antofagasta will invest US$ 1,200,000 over a two-year period (renewable annually by mutual consent thereafter) to fund joint generative exploration for copper and related metals in certain areas of Brazil designated as the area of interest of the Alliance. Lara will manage the exploration during the Alliance phase.
By funding the generative work carried out by the Alliance, Antofagasta will acquire a 51% interest in any project that a technical committee (consisting of representatives of both Lara and Antofagasta) nominates as a Designated Project. Antofagasta may earn an additional 19% interest (for a cumulative 70% interest) by spending a further US$ 5,000,000 on the Designated Project within four years, with a minimum of US$ 500,000 committed in the first year. Upon acquiring a 70% interest in a Designated Project, Antofagasta will pay Lara US$ 3,000,000 and the Designated Project will continue to be explored and, if warranted, developed as a joint venture. If Lara is unable or unwilling to fund its proportionate share of the joint venture expenses, normal dilution clauses will apply, with a conversion to a 2% net smelter return royalty if its interest drops below 10%. Lara will manage the exploration during the first two years of each such joint venture, after which time Antofagasta can elect to manage the exploration.
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 primarily in Brazil and Peru where it has signed agreements for fifteen joint ventures and three Strategic Alliances. Lara’s common shares trade on the TSX Venture Exchange under the symbol “LRA”. For further information on Lara Exploration Ltd. please consult our website www.laraexploration.com, or contact Chris MacIntyre, VP Corporate Development, at +1 416 703 0010.
Antofagasta Minerals S.A. is the mining division of Antofagasta plc, a London Stock Exchange listed company and a constituent of the FTSE-100 Index, with interests also in transport and water distribution. Currently, Antofagasta plc activities are primarily concentrated in Chile where it owns and operates four copper mines: Los Pelambres, Esperanza, El Tesoro and Michilla. Total production in 2011 was 640,500 tonnes of copper, 9,900 tonnes of molybdenum and 196,800 ounces of gold. Antofagasta plc also has exploration, evaluation and/or feasibility programs in North America, Latin America, Europe, Asia, Australia and Africa.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.