Canada-based Lara Exploration Ltd. has signed an Option Agreement with Australia-based Aguia Resources Limited, whereby Aguia may pay US$100,000 and issue up to 15 million shares to Lara and carry out US$1.5 million of exploration within two years of the renewal of certain of the exploration licenses to acquire a 100% interest in Lara’s Sergipe Potash Project in northeast Brazil. Lara is engaged in identification, acquisition and exploration of precious and base metal deposits and other resource opportunities in South America; it holds a diverse portfolio of prospects and deposits in Brazil, Peru, Colombia and China, including also the Boyaca Phosphate Project.
Under the terms of the agreement, Aguia will issue 4 million shares (which will be subject to a 12 month hold period) to Lara upon publication of the extension of certain of the exploration licenses and carry out exploration of at least US$1.5 million in exploration expenditures by the first anniversary of the Extension Date. The exploration must include at least one drill hole to test the known potash horizons within the Property (to a depth that will result in the targeted Ibura Member of the Muribeca Formation being fully tested). Such exploration is a firm commitment and not optional unless Aguia pays $1.5 million to Lara, but Aguia may terminate the Agreement if the exploration licenses are not extended within 2 years.
Aguia may then issue a further 6 million shares to Lara on or before the first anniversary of the Extension Date to earn a 75% interest in the project. Aguia may issue and deliver a further 5 million shares (free of any restrictions on transfer through the ASX) to Lara on or before the second anniversary of the Extension Date to acquire 100% ownership and control of the project.
Lara’s Sergipe Potash Project comprises 21,483 hectares of exploration licenses located in Sergipe State, northeast Brazil. The licenses are adjacent to and cover the extensions of the potash-bearing sedimentary basins of the Vale owned Taquari-Vassouras mine, which produces about 650,000 tons of potash annually. These license areas have been explored extensively for oil and gas in the past and a database of seismic surveys and exploration drilling is available through the Brazilian National Petroleum Agency. This ANP data includes eight wells drilled within Lara’s license areas, several of which intercepted potash, with the best drilled intercept a cumulative 37.6 meters of potash mineralization in ten separate sedimentary units between 1,710 and 1,806 meters depth. Aguia has approximately 68,700 hectares of licenses including blocks that are adjacent and contiguous with those of Lara in the northern part of the basin and blocks covering southern extensions of the basin. It owns in Brazil the Mata da Corda Phosphate Project.