3,000m Drill Program Planned for Q3 2019
Vancouver, B.C. – Latin Metals Inc. ("Latin Metals" or the "Company") - (TSXV: LMS) (OTCQB: LMSQF) provides an update on the Organullo Property (“Organullo” or the “Property”), located in Salta Province, Argentina. The Organullo Property has been optioned to Yamana Gold Inc. (“Yamana”) whereby Yamana, through a subsidiary, has been granted an option (the “Option”) to acquire an initial 70% interest in the Property (see news release dated October 22, 2018).
Work funded 100% by Yamana in Q1 2019 includes detailed geological mapping that is ongoing on Organullo Ridge, and in the historical Julio Verne Mine, with mapping completed on 330 hectares to date. Areas of previous surface rock sampling have been extended to the north and south, with a total of 144 rock and 23 soil samples collected, with sampling planned though Q2 2019 for a cumulative 700 rock samples.
A total of 2,053 metres (m)of drill core have been re-logged and 81 Terraspec samples have been collected and sent for analysis. Logging has focused on characterization of high grade and low grade zones. Yamana has submitted environmental reports to secure a drill permit which is pending for the Property and is currently working with contractors to finalize a drill contract.
A planned 3,000m of drilling is expected to commence in mid to late July 2019, including a fence of drill holes across the main mineralized zone on Organullo ridge as well as a number of exploration drill holes aiming to expand the area of mineralization. Drill targeting for the program is ongoing.
Option Agreement with Yamana
Under the terms of the Agreement, Yamana may exercise the Option by the (i) preparation and delivery of a Pre-Feasibility Study (“PFS”) prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects(“NI 43-101”) that reports an aggregate Measured and Indicated Mineral Resource of a minimum of 1,000,000 gold-equivalent ounces^ by the 6th anniversary of the effective date of the Agreement; (ii) completion of property-related expenditures of at least US$5,000,000 in the aggregate; and (iii) cash payments of US $1,250,000 in the aggregate.
Yamana shall be responsible for funding all exploration expenditures incurred during the Option period. Upon the exercise of the Option, Yamana and Latin Metals shall be deemed to have formed a joint venture (the “Joint Venture”) with the initial joint venture interests being 70% as to Yamana and 30% as to Latin Metals, provided that prior to or concurrently with the exercise of the Option, Yamana shall have a top-up right (the “Top-up Right”) to acquire an additional 5% interest in the Project (being 75% in aggregate) by making a cash payment to Latin Metals equal to US$3.00 per gold equivalent ounce of Measured and Indicated Mineral Resources reported in the PFS.
Yamana and Latin Metals shall each fund exploration and/or development work programs in proportion to their joint venture ownership percentage, provided that if either party contributes less than its proportionate interest to a work program, that party's interest in the joint venture shall be adjusted in accordance with the party's contribution. If, as a result, such party dilutes their interest to 10% or less, the diluted party’s ownership interest shall automatically convert to a 2% net smelter return (“NSR”) royalty. The non-diluting party may repurchase 1% of the NSR royalty within 30 days of a production decision being made on the Project for US$5,000,000.
^ Gold equivalent ounces means (i) the number of gold ounces defined as a Measured Mineral Resource, an Indicated Mineral Resource plus (ii) the number of ounces of silver defined as a Measured Mineral Resource, an Indicated Mineral Resource expressed as equivalent ounces of gold, calculated at a ratio of 66:1 (all terms as defined in NI 43-101).
Keith J. Henderson, P.Geo., is the Company's qualified person as defined by NI 43-101 and has reviewed the scientific and technical information that forms the basis for portions of this news release. He has approved the disclosure herein. Mr. Henderson is not independent of the Company, as he is an employee of the Company and holds securities of the Company.
About Latin Metals
Latin Metals is a mineral exploration company acquiring a diversified portfolio of assets in South America. The Company operates with a Prospect Generator model focusing on the acquisition of prospective exploration properties at minimum cost, completing initial evaluation through cost-effective exploration to establish drill targets, and ultimately securing joint venture partners to fund drilling and advanced exploration. Shareholders are exposed to the upside of a significant discovery without the dilution associated with funding the highest-risk drill-based exploration.
Among the Company’s asset portfolio, key assets include the Organullo Gold project; a 100%-owned property in which Yamana Gold Inc. is earning an initial 70% interest through various work commitments and cash payments.
On Behalf of the Board of Directors of
LATIN METALS INC.
President & CEO
For further information, please contact:
1177 West Hastings Street
Vancouver, BC, V6E 2K3
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Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable Canadian and U.S. securities legislation, including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein including, without limitation, the change of the Company's corporate name, the expected effective date of the Consolidation and the expected outstanding Shares after the completion of the Consolidation and the anticipated business plans and timing of future activities of the Company, are forward-looking statements. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: "believes", "will", "expects", "anticipates", "intends", "estimates", "plans", "may", "should", "potential", "scheduled", or variations of such words and phrases and similar expressions, which, by their nature, refer to future events or results that may, could, would, might or will occur or be taken or achieved.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others, actual results of exploration activities, the fact that the Company's interests in its mineral properties are only options and there is no guarantee that the interests, if earned, will be certain, requirements for additional capital, future prices of precious metals, copper-gold and lithium, changes in general economic conditions, changes in the financial markets and in the demand and market price for commodities, other risks of the mining industry, the inability to obtain any necessary governmental and regulatory approvals (including TSXV approval of the name change and the Consolidation), changes in laws, regulations and policies affecting mining operations, hedging practices and currency fluctuations, as well as those factors discussed under the heading "Risks and Uncertainties" in the Company's most recent management's discussion and analysis and other filings of the Company with the Canadian Securities Authorities, copies of which can be found under the Company's profile on the SEDAR website at www.sedar.com.
Readers are cautioned not to place undue reliance on forward-looking statements. Except as otherwise required by law, the Company undertakes no obligation to update any of the forward-looking information in this news release or incorporated by reference herein.