10/02/2011 - 11:22

Latin Resources announces $20m expansion

10/02/2011 - 11:22

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Shares in Perth-based mineral sands hopeful Latin Resources have jumped after it announced a major expansion of its Guadalupito iron and mineral sands project in Peru.

Shares in Perth-based mineral sands hopeful Latin Resources have jumped after it announced a major expansion of its Guadalupito iron and mineral sands project in Peru.

Latin announced today it would acquire over 14,000 hectares of minerals deposits adjacent to Guadalipito from 14 individual vendor companies for $US20.035 million, to be paid over 10 years.

The acquisition increases Latin's tenements by more than seven times, to 16,268 hectares.

Investors reacted strongly to the news, with Latin's share price up 12 per cent at 11:16AM today, trading at $0.28.

Latin's strategy has also piqued the interest of Cape Lambert Resources chairman, Tony Sage, who holds 17 per cent of the company's shares.

Latin Resources managing director Chris Gale said the acquisition had the potential to turn the company into one of the world's pre-eminent magnetite and minerals sands producers.

"We will now control more than 7 times the mineralised area in a location that is showing prospects as an extremely attractive standalone magnetite project," Mr Gale said.

"In addition to magnetite, previous surveys indicate promising evidence of gold, rare earths and heavy mineral sands, which for us are really just a bonus.

"The acquisition is consistent with the strategy to develop Guadalupito into a highly promising flagship project that has the additional benefit of being located only 10 km from a major port and a Brazilian owned steel smelter that is one of the largest in Peru.

"Capital costs for the project are expected to be low as only very simple beneficiation will be required; mother nature has done most of the hard work for us.

"The purchase price is payable by way of instalments over a 10 year period giving us considerable flexibility to consider a range of funding options including existing cash reserves, future cash flows and equity.

"We are delighted to announce this company making acquisition and will now focus our efforts on delineating a JORC compliant resource at Guadalupito."

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