Sprott Resource Corp. (SRC), Toronto, announced Nov. 16 that it has signed an exploration and option agreement with Lara Exploration Ltd., Vancouver, and other members of the Mantaro Group, under which SRC has the option to acquire a 100 percent interest in the Mantaro phosphate project in Peru. The Mantaro Group, of which Lara is a member, is an unincorporated joint venture that holds the rights to the Mantaro phosphate project.
According to Lara, Mantaro is one of the largest undeveloped phosphate deposits in the Pacific Rim region and provides an excellent opportunity to participate in the expanding market for phosphate-based fertilizers for production of food and biofuels. The property comprises 3,700 hectares of exploration licenses and claims near Sincos, in the Department of Junin, 200 kilometers east of Lima. The deposit was originally discovered and explored in the 1960’s by Cerro de Pasco Corp., which outlined a mineralized zone extending over 12 kilometers along the Mancaspico syncline. Trench and drill samples returned an average grade of approximately 15 percent P2O5 (phosphorus oxide) over an average deposit thickness of 24 meters. The deposit dips at an approximately 45 degree angle and is open pittable.
Lara said exploration work resumed between 1998 and 2002, including further trenching and mineral characterization studies, bulk sampling, mineral beneficiation testing, and preparation of a prefeasibility study by Bateman Phosphate Technologies. Total phosphate potential in the central portion of the property was estimated at that time to be in the range of 300 million to 750 million mt, with a historical “inferred resource” estimate of 61 million mt. These estimates are historical data only and do not conform to the resource estimation requirements of NI 43-101. Beneficiation test work conducted by Bateman Phosphate Technologies concluded it was possible to produce a concentrate grading in excess of 32 percent P2O5, and that the concentrate was amenable to production of phosphate fertilizer.
“We are very excited about this project and the opportunity to participate in the expanding market for phosphate-based fertilizers,” said Kevin Bambrough, SRC president and CEO. “We would like to thank Miles Thompson of Lara and the other members of the Mantaro Group for agreeing to work with us on this project. We look forward to bringing this project forward.”
SRC has the option to acquire a 100 percent interest in the Mantaro phosphate project by funding exploration and technical studies, making cash payments over four (4) years totaling approximately U.S.$2 million, and issuing shares to the Mantaro Group in a new project company equal to 20 percent of the outstanding shares at the time of the qualifying transaction. In addition, the Mantaro Group will receive a 2 percent royalty on any production from the Mantaro phosphate project, subject to SRC’s option to purchase the royalty for the equivalent in cash of 2 percent of the net present value of the project upon the completion of the full feasibility study. A finder’s fee of C$50,000 will be paid by SRC to Integral Wealth Securities Ltd.
SRC intends to issue a subsequent press release at a later date in which it will provide additional information on the Mantaro phosphate project.
A Canadian-based company, the primary purpose of SRC is to invest, directly and indirectly, in natural resources.
Lara says it is a well-funded junior exploration company, with projects in Brazil and Peru. Lara’s common shares trade on the TSX Venture Exchange under the symbol LRA.