Lara Exploration and Capstone Mining Sign Planalto Deal

Lara Exploration (TSXV:LRA) has announced that it has signed a letter of intent granting Capstone Mining an exclusive option to earn up to a 70 percent interest in the company’s Planalto copper project in the Carajás Province of northern Brazil.

Lara’s exploration work over the last 12 months has yielded a series of very promising drill results from the Homestead target, including hole PDH 18-03, which intercepted 130.41 metres between 68.05 metres and 198.46 metres down hole, with an average grade of 0.88 percent copper and 90 ppb gold, or 0.93 percent copper equivalent within a wider zone of 284.71 metres from surface averaging 0.48 percent copper and 48 ppb gold.

As quoted in the press release:

Under the terms of the letter of intent, Capstone will pay Lara US$150,000 immediately and US$ 200,000 following receipt of a drill permit for the project and execution of the definitive agreement. Capstone will then invest a minimum of US$1.2 million within a year of signing the agreement, to drill test extensions of the mineralization identified at Homestead and scout drill other targets on the property.

Capstone can earn an initial 49 percent interest by investing US$5 million by the third anniversary of the agreement and can then elect to purchase an additional 2 percent interest in the project by paying Lara US$400,000 and committing to fund a feasibility study by the fifth anniversary, to reach a 61 percent interest. The third and final phase will comprise Capstone electing to finance, build and operate a commercial mining operation to the benefit of Lara 30 percent and Capstone 70 percent, with Lara repaying its pro-rata share of the financing out of cash flow. Lara will hold certain buy back rights to reacquire a majority interest in the project should Capstone decide to discontinue investing.

Click here to read the full Lara Exploration (TSXV:LRA) press release.