Lara Exploration announced that it has signed the an agreement with Capstone Mining granting an exclusive option to earn up to a 70% interest in its Planalto Copper Project in the Carajás Province of northern Brazil.
The Planalto Copper Project holds exploration licenses covering 4,726 hectares of area located near Vale’s Sossego copper mine and Oz Minerals Antas copper mine, in the Carajás Mineral Province of northern Brazil.
The area with exploration license is featured with meta-volcano-sedimentary sequences and intrusives of early Proterozoic-age with IOCG-type mineralization.
Lara has carried out exploration work since last 12 months and has yielded a series of promising drill results from the Homestead target.
The series of results include hole PDH 18-03, which intercepted 130.41mts between 68.05mts and 198.46mts down hole, with an average grade of 0.88% copper and 90ppb gold, or 0.93 % copper equivalent, within a wider zone of 284.71mts from surface averaging 0.48% Cu and 48 ppb Au.
Under the terms of the agreement, Capstone is expected to pay Lara an amount of $200,000 following receipt of a drill permit for the project.
Within a year of signing the agreement, Capstone is expected to invest a minimum of $1.2m, to drill test extensions of the mineralization identified at Homestead and scout drill other targets on the property.
Capstone is estimated to earn a 49% interest initially following investment of $5m by the third year of the agreement and can then elect to purchase an additional 2% interest in the project from Lara paying $400,000.
By the fifth anniversary of the agreement, it could reach a 61% interest by committing to fund a feasibility study.
The third and final phase would include Capstone electing to finance, build and operate a commercial mining operation such that, it benefits Lara with 30% and Capstone 70%, with Lara repaying its pro-rata share of the financing out of cash flow.
Lara is expected to hold certain buy back rights to reacquire a majority interest in the project if Capstone decides to discontinue investing.
Capstone is a Canadian base metals mining company, with two producing copper mines that include Pinto Valley in the US and Cozamin in Mexico.