Lara is an exploration company following the prospect and royalty generator business model, to minimide shareholder dilution and financial risk
Lara Exploration Ltd. (“Lara” or the “Company”), is pleased to report that it has, with partner Global Battery Metals Ltd. (“GBM”), signed an Option and Royalty Agreement (“the Agreement”) for the sale of the Lara Copper Project for US$5.75 million and a 1.5% NSR royalty to Minsur S.A. (“Minsur”). Minsur is a Peruvian tin and gold miner that is in the late stages of building the US$1.6 billion capex Mina Justa open pit copper mine near Marcona, in the same district as the Lara project.
The Lara Copper Project comprises mineral rights covering a partly defined copper-molybdenum porphyry deposit, located in the Laramate Province of the Ayacucho Department, approximately 40km inland from the town of Palpa on the Panamerican Highway. The Project is registered in the name of Minas Dixon S.A., which is in turn owned 55% by GBM and 45% by Lara.
Under the terms of the Agreement Lara and GBM have granted Minsur an exclusive option to acquire a 100% interest in the Project by making staged cash payments of US$5.75 million, based on permitting milestones.
In addition to the cash payments tabled above, Minsur has also granted a 1.5% Net Smelter Return Royalty (“NSR”) to Lara (0.75%) and GBM (0.75%), payable on any production from the property. Minsur retains the right to purchase a 0.25% NSR from each of Lara and GBM (collectively one third) of the NSR for US$5 million at any time prior to the commencement of commercial production.
Source: Company Press Release