Lara Exploration Signs Heads of Agreement for Sale of Interests

Lara Exploration Ltd. (TSXV:LRA) announced that together with its partner Kiwanda Mines LLC, it has signed a Heads of Agreement for the sale of a number of rights and options held by their Phosphate Alliance and Coal Alliance to Phillips River Mining Limited (ASX:TTR). It is understood that Kiwanda already owns a 19.9 percent interest in Phillips River. Subject to completion of the proposed transaction and a related financing, it plans to use Phillips River to pursue the interests formerly held by its phosphate and coal alliances.

As quoted in the press release:

For the coal assets, Phillips River will pay an amount determined by an independent valuation which, after deduction of an initial $450,000 payment to Lara, will be satisfied by the issuance of shares of Phillips River (split 75% to Kiwanda and 25% to Lara) at a deemed price of A$ 0.20 each. Of such shares, 60% will be paid on closing and the remaining 40% will be paid on achievement of production and resource establishment milestones. The amount payable for the phosphate assets will also be determined by an independent valuation, the first 50% of which will be paid on closing and the remaining 50% of which will be paid on achievement of production and resource establishment milestones. Phillips River has also agreed to reimburse Lara $770,000 (inclusive of the foregoing $450,000) of the costs incurred by Lara in acquiring and maintaining these interests, with $200,000 paid on signing of the Heads of Agreement and the remainder upon closing the transaction. Phillips River will also assume the day-to-day costs of these assets, effective immediately. Finally, Lara will have the right to appoint one of the six directors comprising Phillips River’s board of directors.

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