Lara Exploration said that it will award an earn-in option of up to 70% in its Planalto Copper Project in Brazil to Canadian base metals mining firm Capstone Mining.
The Planalto Copper Project, which is made up of three exploration licenses covering meta-volcano-sedimentary sequences and intrusives of early Proterozoic-age with IOCG-type mineralization, is located in the Carajás Province in the northern part of Brazil.
The copper deposit, which is spread over 4,726 hectares, is located near Vale’s Sossego copper mine and the Antas copper mine owned by Oz Minerals.
Lara Exploration revealed that its exploration work at the Planalto Copper Project in the last 12 months had produced encouraging drill results from the Homestead target. Included in these are hole PDH 18-03, which encountered an average grade of 0.88% copper and 90ppb gold, or 0.93 % copper equivalent “CuEq”, within a wider zone of 284.71m from surface averaging 0.48% Cu and 48 ppb Au.
According to Lara Exploration, exploration work in the past at the Planalto Copper Project includes surface sampling, which highlighted two copper-in-soil anomalies with values of more than 300 parts per million (ppm) copper, with one of them nearly 1.3km by 0.9km in size and the other being 2.9km by 0.3km.
Capstone Mining will have an option to earn an initial stake of 49% with an investment of $5m in the Brazilian copper project by the third anniversary of the agreement with Lara Exploration. It can then opt to buy a further 2% stake in the Planalto Copper Project by paying $400,000 to Lara Exploration and committing to finance a feasibility study by the fifth anniversary, to raise its stake to 61%.
In the third and last phase, Capstone Mining will have the option to finance, build and operate a commercial mining operation to take its stake to 70% in the Brazilian copper project with Lara Exploration to hold the remaining stake of 30%.
Lara Exploration will hold some buy back rights to reacquire a majority stake in the Planalto Copper Project in the case of Capstone Mining deciding to stop its investments.