viewLatin Resources Ltd

Latin Resources enters gold sector with earn-in for project in prolific Lachlan Fold Belt

The transformative move follows the company completing funding of its South American lithium and copper projects through joint venture partners.

Latin Resources Ltd - Latin Resources enters gold sector with earn-in for project in prolific Lachlan Fold Belt
A binding farm-in terms sheet has been executed to earn up to 75% in Yarara Gold Project

Latin Resources Ltd (ASX:LRS) (FRA:XL5) has made a strategic move into the strong gold sector with an earn-in agreement covering the Yarara Gold Project in the prolific Lachlan Fold Belt of NSW.

The company has signed a binding farm-in terms sheet with Mining and Energy Group Pty Ltd (MEG) to earn up to a 75% interest in the southern NSW gold project, which is also prospective for copper.

Next chapter

Entering this new chapter focused on gold exploration closer to home in the highly prospective Lachlan Fold Belt follows the company funding its South American operations through new partnerships.

LRS recently announced a joint venture with Integra Capital in respect of its lithium project in Argentina.

This supplements a JV with global copper major First Quantum Minerals Limited (TSE:FM) (OTCMKTS:FQVLF), in which First Quantum is sole funding exploration costs on the copper porphyry project in Peru.

Latin’s managing director Chris Gale described the new farm-in joint venture opportunity as an outstanding entry into one of Australia’s premier gold jurisdictions to create strong shareholder value.

World-class province

“The Yarara project presents an excellent opportunity to secure a significant and highly prospective gold project which has not benefited from modern exploration techniques in an emerging area of the Lachlan Fold Belt which has an established reputation as a world-class mineral province.

“Now we have our South American projects fully funded in Peru and Argentina, we can move our focus onto a very exciting gold project in the Lachlan Fold Belt, an area that shows incredible promise to enable LRS to become an exciting Australian junior explorer.”

The Lachlan Fold Belt is a well-established mineral province hosting several world-class mining operations such as Cadia, Northparkes, Tomingley, Cowal and Peak Hill gold mines.

This belt has attracted strong recent attention following the copper-gold discovery by Alkane Resources Limited (ASX:ALK) at the Boda prospect and other exploration successes.

EL8958 Exploration Licence tenement showing historical mines.

Historic production

The new LRS project about 70 kilometres east of Albury covers 50 kilometres of strike of the Yarara Shear Zone which contains 20 dormant historic high-grade gold mines and numerous gold workings.

This shear zone was mined from 1877 to the 1930s and production mostly came from four mines in the northern part of the zone and very high-grade sheeted gold mined in the southern Ournie area.

The gold has a high fineness and is associated with quartz and sulphides and this is possibly analogous to the Bethanga gold workings in Victoria where the workings were taken to over 200 metres in mine development.

Historical records show an average ROM grade in excess of an ounce per tonne to a depth of less than 70 metres.

Metallogenic Study (Mine No 195-200), Geological Survey of NSW 1982 as published in the JC Downes Report, October 2003.

Metallic mineral occurrences

There have been numerous metallic mineral occurrences recorded on the tenement block.

Yarara project is prospective for the following styles of mineral deposit:

  • High-grade epithermal gold deposits in shear zones in the metasedimentary rocks;
  • Intrusive related gold deposits;
  • Bulk-tonnage gold deposits in granites; and
  • Skarn deposits (gold, base metals).

Areas of interest

There are three principal areas of interest to the company within the project:

  1. Yarara Reefs: The Yarara area hosts structurally located gold mineralisation in sediments. A major shear zone provides the main focus for mineralisation.
  2. Carboona: At Carboona, known mineralisation includes a wide variety of metals, including lead, tin, tungsten, gold and silver which are spatially related to granite contact or to a major shear zone; and
  3. Ournie: The Ournie goldfield contains historical workings for gold and silver hosted in granite.

Historic results suggest potential for the discovery of bulk tonnage granite-hosted gold deposits similar to those at Cadia-Ridgeway, and there is also significant and relatively untested exploration potential for high-grade shear zone hosted gold deposits in the area and, to a lesser extent, copper.

Exploration plans

Latin Resources intends carrying out pre-drilling exploration activities that would initially involve the acquisition of high-resolution geophysics, in particular low-level closely-spaced TEM type of surveys.

This would be in conjunction with detailed data compilation and interpretation followed by structural control studies/interpretations leading to drilling target definition.

The intended approach will enable the prioritisation of high-value targets and initial reconnaissance drill testing to be completed within 3-6 months.

Agreement terms

Latin Resources has the right to acquire up to a 75% interest in EL 8958 from MEG and this earn-in comprises five stages to be completed after a non-refundable deposit of $30,000 is paid to MEG, which will then provide all mining information in its possession.

In stage one LRS will earn a 20% JV interest by issuing to MEG or its nominee 40 million shares at a deemed issue price of the lesser of $0.003 per share or equal to the price at which LRS issues shares only in the next placement that occurs after the date of the terms sheet.

This stage also includes paying MEG $20,000 cash and issuing to MEG or its nominee that number of LRS shares calculated by dividing $130,000 by the lower of $0.003 and the 30-day VWAP of LRS shares prior to the grant of drilling permits.

The subsequent four stages will see LRS reach 75% by making further expenditure and meeting exploration milestones.

Capital raising

The company has conducted a share placement to professional and sophisticated investors and also plans a share purchase plan (SPP) to eligible shareholders to raise capital for exploration, project development, working and other capital requirements.

The placement will raise up to $215,200 (before costs) through placing 53.8 million shares at an issue price of $0.004 per share, with 1 free attaching listed option for every 1 share subscribed for and issued, with an expiry date December 31, 2022, and $0.012 exercise price.

The company also intends to conduct the SPP to existing shareholders at the lowest price per share possible permitted by the ASX Listing Rules, being $0.005, together with 1 listed option for every 1 share issued.

The SPP offer will allow eligible shareholders to subscribe for up to $15,000 worth of shares.

Quick facts: Latin Resources Ltd


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Market Cap: $63.11 m

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