VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan 21, 2013) - Lara Exploration Ltd. ("Lara" or the "Company") (TSX VENTURE:LRA) is pleased to report that it has secured renewals for the Exploration Licenses comprising its Sergipe Potash Project in northeast Brazil. Under the terms of the Option Agreement (the "Agreement") signed with Aguia Resources Ltd. ("Aguia") on May 31, 2012, the renewal of these licenses triggers the first payment and Aguia is now required to issue 4 million of its ordinary shares to Lara. However, the issue of these shares remains subject to approval by the shareholders of Aguia at a general meeting scheduled to be held in March 2013. Once issued, the shares will remain in escrow until December 21, 2013 (one year from the date of publication of the renewals).
Aguia is currently focusing its efforts on its phosphate projects in southern Brazil, but expects to resume work on the Sergipe Potash Project in the second half of this year. Under the terms of the Agreement, Aguia has until December 21, 2013 to fulfill its minimum exploration work commitment of $1.5 million, which must include at least one drill hole to test the known potash horizons within the Property (to a depth that will result in the targeted Ibura Member of the Muribeca Formation being fully tested). Aguia may then issue Lara with another 6 million ordinary shares to earn a 75% interest in the project. Aguia may issue and deliver a further 5 million ordinary shares to Lara on or before December 21, 2014 to acquire 100% ownership and control of the project.
Lara''s Sergipe Potash Project comprises 21,483 hectares of exploration licenses located in Sergipe State, northeast Brazil. The claims are adjacent to and cover the extensions of the potash-bearing sedimentary basins of the Taquari-Vassouras mine (owned by Vale S.A.), which produces approximately 650,000 tons of potash annually. These properties have been explored extensively for oil and gas in the past and a database of seismic surveys and exploration drilling is available through the Brazilian National Petroleum Agency ("ANP"). This ANP data includes eight wells drilled within Lara''s property, several of which intercepted potash, with the best drilled intercept a cumulative 37.6 meters of potash mineralization in ten separate sedimentary units between 1,710 and 1,806 meters depth. Aguia has approximately 68,700 hectares of licenses, including blocks that are adjacent and contiguous with those of Lara in the northern part of the basin and blocks covering southern extensions of the basin.
Michael Bennell, Lara''s Vice President Exploration and a Fellow of the Australasian Institute of Mining and Metallurgy, is a Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects and has approved the technical disclosure in this release and has verified the data disclosed.
Lara is a South American-focused exploration company following the Prospect Generator business model, which aims to minimize shareholder dilution and financial risk by generating prospects and then exploring them in joint ventures funded by partners. The Company currently holds a diverse portfolio of prospects and deposits, mostly funded through fifteen Joint Ventures and three Strategic Alliances. Lara''s common shares trade on the TSX Venture Exchange under the symbol "LRA".