Laconia Resources (ASX: LCR) is set to acquire Rasuhuilca advanced high grade gold silver development project in mining friendly Peru, which has near term development potential and major exploration upside.
The company has resolved to proceed with the acquisition from Gold Mines of Peru after completing due diligence on the project.
Laconia plans to update and reaffirm a Feasibility Study carried out in June 2008, with the aim of bringing the project into production in 12 to 18 months.
This acquisition will establish Laconia as an emerging precious and base metals exploration and development company and diversifies its activities from the company's existing portfolio of projects in Western Australia.
Consideration for the acquisition comprises 42 million Laconia shares, 14.5 million performance shares and $120,000 paid over a six month period to a third party.
An additional $500,000 from production revenue will be paid if production revenue is reached within five years.
Gold Mines of Peru chairman Dr Saliba Sassine will join the board of Laconia following shareholder approval of the acquisition.
The transaction also includes Gold Mines of Peru’s other Peruvian projects, the Motil and Porcuchia gold-silver tailings projects.
The acquisition is subject to shareholder approval, with a shareholder meeting planned for mid to late April 2012.
The Rasuhuilca project
Rasuhuilca comprises four concessions covering 2,765 hectares, and is located 500 kilometres southeast of the capital Lima in the Andean volcanic arc of southern Peru.
The best developed mineralised body in the project is the Rasuhuilca zone, which has been explored by underground development, intensively over its central 250 metres long portion where it has a vertical extent of at least 180 metres and reaches a thickness from 17-40 metres in a steeply south-plunging shoot.
Average grades from underground channel sampling are about 2 grams per tonne (g/t) gold and 185g/t silver.
The Rasuhuilca zone Resource is classed as Inferred due to the reliance on historical data and the lack of independent QAQC data.
Laconia plans to upgrade the confidence in this Resource to support mine planning activities.
In addition, the company believes there is potential to increase the current resource base at the Rasuhuilca zone and in other targets along strike.
Rasuhuilca is situated in the same region as Hochschild Mining Plc’s (LON: HOC) major silver and gold operations which host Reserves and Resources in excess of 186 million ounces silver and 1.1 million ounces gold.
Access to Rasuhuilca is via sealed highways through Nasca and Puquio, then minor roads. The final stage of approach to the project is via tracks from the nearby village of Chipao.
Laconia plans to improve project access, and a short runway airstrip may also be constructed on the project area.
There is a ready workforce, with prior experience in exploration and mining operations, in the villages of Chipao and Andamarca.