Latin Resources Ltd (ASX:LRS) has secured two new contiguous lithium tenements at the Salinas Lithium Project in eastern Brazil, expanding the company’s lithium assets to 5,338 hectares within the highly prospective Bananal Valley district.
The valley is within Minas Gerais State, a rich mining region of Brazil that hosts the Grota do Cirilio Project currently under development by TSX-V listed Sigma Lithium Corp (TSX-V:SGML, OTCQB:SGMLF, NASDAQ:SGML).
Multiple compelling drill targets have now been defined along the lithium corridor through geology and analysis of recent assay results, with drilling expected to begin in February 2022.
High-grade results have been received over a large area, constituting a strike length of over 1.2 kilometres with hits of up to 2.71% Li2O and 1.45% Li2O from spodumene-bearing pegmatites.
‘Significant’ increase to prospectivity
Latin Resources managing director Chris Gale commented: “Our geological team is extremely keen to commence drilling in early 2022, testing multiple high priority targets at Salinas.
“In addition, the option agreement to acquire two tenements next door to Bananal Valley significantly increases the prospectivity of the project, given the two new tenements contain outcropping high-grade lithium spodumene-bearing pegmatites.”
2022 drilling program
LRS has defined 14 drill sites to test outcropping high-grade lithium-bearing pegmatites, identified in previous mapping and geochemical sampling programs.
Drill permits have been submitted for the first phase of drilling, scheduled to commence February 2022, with additional permits for the second phase of follow-up drilling to be lodged in the coming weeks.
Drilling has been designed to test two priority target areas where sampling returned multiple high-grade results (2.71% Li2O and 1.45% Li2O) from weathered spodumene-bearing pegmatites, mapped over 1.2 kilometres of strike.
Phase I drilling will be the first campaign to test this highly anomalous and outcropping mineralised trend in what the company believes is an underexplored region that currently contains 100% of Brazil’s official lithium reserves.
Lithium is a highly volatile element that is quickly leached and depleted from exposed and weathered spodumene. LRS believes the remnant presence of lithium anomalism of this calibre is therefore highly encouraging and worthy of a targeted drilling campaign.
Options agreement
Under the terms of the tenement option agreement, Latin Resources has the option to acquire a 100% interest.
Tenement 8331.219/2017
- To acquire the exclusive purchase option, Latin Resources will issue a monthly payment of BRL 3,000 (about A$750), to the vendor for a period of 12 months. At any time during the 12 months, LRS have the right to exercise its option to purchase, at which point monthly payments will cease and purchase payments will begin.
- Within 15 days of the date of the exercise date, LRS or its designated entity or individual shall pay or allocate to the vendor:
- The total amount of US$20,000 cash; and
- The total amount of US$10,000 in ordinary LRS shares.
- Within 15 days of the completion of 12 months after the exercise date, LRS or its designated entity or individual shall pay to the vendor the total amount of US$60,000.
- If LRS exercises the option and acquires 100% of the concessions, the vendor will retain a transferable 3% net smelter royalty on all commercial sales from the project. LRS will have the right to purchase this on fair agreeable commercial terms in the future.
- In addition, if a mineral resource as defined by the JORC-2012 Code of at least 10 million tonnes in any category with a grade of at least 1.3% Li2O is established within the concession, LRS will pay a bonus of US$50,000 cash plus US$50,000 in ordinary LRS shares to the vendor.
Tenement 831.799/2005
- To acquire the exclusive purchase option, Latin Resources will pay the fixed amount of US$10,000 within 30 days from the latest signature date on this agreement and the monthly amount of US$1,000 for the first (6) months as of 30 days from the latest signature date on this agreement.
- Within 30 days of the date of the exercise, LRS or its designated entity or individual shall pay or allocate to the vendor:
- The total amount of US$40,000 cash; and
- The total amount of US$15,000 in ordinary LRS shares.
- Within 30 days of the completion of 12 months after the exercise date, LRS or its designated entity or individual shall pay to the vendor the total amount of US$75,000.
- If LRS exercises the option and acquires 100% of the concessions, the vendor will retain a transferable 3% net smelter royalty on all commercial sales from the project. LRS will have the right to purchase this on fair agreeable commercial terms in the future.
- In addition, if a mineral resource as defined by the JORC-2012 Code of at least 10 million tonnes in any category with a grade of at least 1.3% Li2O is established within the concession, LRS will pay a bonus of US$50,000 cash plus US$50,000 in ordinary LRS shares to the vendor.
About Latin Resources
Latin Resources is an Australian-based mineral exploration company with several mineral resource projects in Latin America and Australia.
The Australian projects include the Cloud Nine Halloysite Project near Merredin, WA, Lachlan Fold Belt gold projects in NSW, and the Big Grey Project in the Paterson region, WA.
In Latin America, the company has two lithium projects, one in Brazil and has a joint venture agreement with Argentinian company Integra Capital to fund the next phase of exploration on its lithium pegmatite projects in Catamarca, Argentina.
The company is also actively progressing its copper porphyry MT03 project in the Ilo region of Peru.