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In the news with RFC Ambrian: Latin Resources & Australian Agriculture

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INTRODUCTION

In the news: Latin Resources & Australian Agriculture 
It’s all go at Latin Resources (ASX:LRS), as Managing Director Chris Gale has been a busy bee. Yesterday, we had an announcement from them that they have signed a binding term sheet with Chilean company Minera Activa, to enter into a JV to earn into 100% of Minera Activa’s Filipina Copper project. The project has an NI 43-101 resource of 9.3Mt at 0.80% Cu and 0.23g/t Au which was released in September 2014. 36,957 metres of drilling were completed from 1990 to 2013 and there is major prospective upside for increasing this resource. The project has mining permits and potential for immediate small scale production. Filipina is situated slap-bang in one of Chile’s premium copper districts, with neighbours including Anglo American, Freeport, Antofagasta and Hot Chilli. Simon Cowell probably has a Hacienda nearby as well.

The terms of the JV comprise an investment of US$2mn over 18 months to earn 25%, with an option to invest US$5mn to BFS to earn a further 24% for a total of 49% in the following 18 months. Latin has an option to acquire the remaining 51% in two stages by first paying US$2mn to Minera Activa by month 36 (to earn an additional 6% share to take Latin to 55%). A further payment of US$10mn would then be due to Minera Activa by month 48 for the remaining 45% to take Latin to 100%. I hope this is clear enough!

Latin aren’t standing still on their existing assets though. On the 11th November we had a press release saying that drilling at Ilo Este has commenced, and a second rig was due to commence a second hole later in the week. Latin have assigned the rights and an earn-in option to transfer 70% ownership of Ilo Este to a company called Zahena for US$1mn in cash and a minimum exploration work commitment for 11,000m of diamond drilling valued at around US$3mn.

On a lighter note: Australian Agriculture. The latest Australian Government is blocking the sale of Australia’s largest cattle property portfolio to the Chinese. The seller is a company called S. Kidman & Co and they need the money because Nicole hasn’t had a bankable film for years, I presume. The buyer was to have been Chinese investment firm Genius Link Asset Management which was said to be willing to pay over US$350mn.

Anyway, the Federal Government has decreed that selling the block of land is “contrary to the national interest”. (The property accounts for 1.3% of Australia’s landmass, 2.6% of its total agricultural land and is about the size of Ireland). Why so? Well it turns out that Anna Creek, one of the cattle stations, is next to a weapons testing area in South Australia called Woomera. The Woomera Prohibited Area was established by the British in WW2 to develop missiles to fire at Nazi Germany in answer to their V1 flying bombs. The Brits later tested seven nuclear bombs in the area.
I’m not clear what the Australian’s are testing down there now, or indeed if they have an independent nuclear missile programme. However, I suspect the problem lies as ever with the Americans. Obama ticked off the Aussies this week for agreeing to lease Darwin’s commercial port to a Chinese consortium. Obama complained about it because over 100 US warships use the port every year and they are paranoid that the Chinese will be able to spy on their movements. 2,500 US marines are stationed close to the port in readiness for the day that China decides to invade someone.

If you are a Chinese Investment Firm looking for investments then rest assured that Britain is open for business. We can offer the following opportunities:

  • Nuclear reactors
  • Gas-fired power stations
  • High-speed rail links
  • Upgrade of the A40 between Oxford and Witney
  • Newcastle United Football Club
  • Wales

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