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Latin Resources' Peruvian services division on track to grow sales by 118%

Published: 11:35 21 Jul 2015 AEST

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Latin Resources’ (ASX:LRS) services division PLR Services in Peru continues to grow at a fast clip with sales of at least US$223,600 in 2015 based on existing contracts.

This is up 118% on 2014 sales of US$102,600 and could grow further during the second half from proposals during the second half.

That an ASX listed resources company is able to generate cash flows is rare enough but to grow sales at this fast pace is a revelation.

PLR Services was launched in late 2013 to take advantage of the company’s successful experience in permitting, social management and other activities to provide similar services to other companies as a means of generating additional income during the prevailing challenging market conditions.

Clients include multi-national mining companies operating in Peru such as Vale (NYSE:VALE) and Latin’s project partners such as Compañia Minera Zahena S.A.C. along with junior explorers relatively new to the Peruvian operating environment.

Chris Gale, managing director, commented:

“We are very pleased with the growth of PLR Services based on new and returning customers who appreciate the quality of work and efficiency of our experienced Peru based professionals.

“PLR Services is making an increasingly important contribution to funding the company’s cash flows in Peru.

“Generating income through services is another part of the company’s broader strategy to minimise costs and to maximise non-market based funding opportunities, such as the cash and exploration funding that has been generated successively in deals made on the Mariela, Ilo Norte and Ilo Este projects.

“We look forward to continuing this strategy with our other Ilo Projects and in particular the Guadalupito Andalusite Project in Northern Peru.”


Analysis

While Latin Resources continues to maximise its non-market based funding opportunities by making agreements on its Mariela, Ilo Norte and Ilo Este projects, its PLR Services division provides it with revenue, something few juniors ever achieve.

That sales for 2015 are already forecast to be up 118% to US$223,600 in 2015 with potential for further growth highlights strongly the demand for its services.

Clients include both large multi-national companies like Vale and junior explorers who require the company’s extensive in-house experience in Peru coupled with a direct understanding of the permitting demands faced by mineral explorers.

Latin MD Chris Gale has moulded a team in Peru that has been able to monetise the extensive experience and expertise. While it is not Latin's main focus, which continues to be exploration, it will materially assist funding of its work programs. 

In our book, this is a winner.



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