Laconia Resources deals itself into advanced stage gold-silver project in Peru

Laconia Resources (ASX: LCR) has acquired the Rasuhuilca advanced high-grade gold-silver development project in mining friendly Peru, which has significant near-term development potential and major exploration upside.

The project has been acquired from Perth-based exploration company Gold Mines of Peru Limited for a consideration of 42 million Laconia shares, 14.5 million performance shares and $120,000 paid over 6 months to a third party.

A total of $500,000 from production revenue will be paid only if production revenue is reached within five years.

In addition, Dr Saliba Sassine, the chairman of Gold Mines of Peru, will join the Laconia Board on successful completion of Laconia’s due diligence.

The acquisition is subject to shareholder approval and a number of other conditions.

Laconia will also acquire Gold Mines of Peru’s other Peruvian projects, the Motil and Porcuchia gold-silver tailings projects, as part of the transaction.

The acquisition represents a major milestone for Laconia and establishes the company as a significant emerging precious and base metals exploration and development company.

The Rasuhuilca project

A Feasibility Study was conducted at Rasuhuilca in June 2008 and the project complements Laconia’s existing portfolio of high grade precious and base metals projects in Western Australia where the company has delivered strong consistent drilling results.

Laconia will seek to update and re-affirm the Feasibility Study, and aims to bring the project into production as a high grade, small tonnage mining operation in 12-18 months, using revenues to unlock the project’s major exploration upside.

The Rasuhuilca project is located 500 kilometres south east of the capital Lima, in the Andean volcanic arc of southern Peru, and comprises four concessions (Patacancha No. 1 to 4) for a total area of 2,765 hectares.

These concessions cover a large part of an extensive high-sulphidation alteration system. The alteration system contains numerous zones of gold-silver mineralisation, as veins and more irregular bodies of veining, brecciation, and silicification.

Gold-silver mineralisation is typical of high-sulphidation epithermal style mineralisation.

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 185 g/t silver. The reliance on historical data used in the estimate and the lack of independent QAQC data resulted in reporting of the Rasuhuilca zone, as an Inferred Resource.

The company envisages that the confidence in the resource will be upgraded so that it can be used as the basis for mine planning activities once independent sampling has been completed to confirm the tenor of the historic data.

There is significant potential to increase the current resource base at Rasuhuilca and on other targets along strike, as well as discovery of  gold-dominant epithermal and copper/gold porphyry mineralisation within the tenement package.

The project is located in the same region as Hochschild Mining Plc’s (LON: HOC) major silver and gold operations. Hochschild has reserves and resources exceeding 186 million ounces silver and 1.1 million ounces gold.

Access to the project 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.

Recent uncertainty in Peru with a change of government and a new proposed mining tax regime has been resolved with the passing of a new tax through congress.

Capital Raising

Laconia plans to raise up to $1.5 million through the issue of 37.5 million shares at $0.04 per share to advance work on the Peruvian projects. Alto Capital has been appointed as manager to the offer.

The capital raising will be subject to shareholder approval at a general meeting to be held on or about 10 January 2012.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/22716/laconia-resources-deals-itself-into-advanced-stage-gold-silver-project-in-peru-22716.html