investor presentation - creating value through exploration, acquisitions and discovery
TRANSCRIPT
TSX.V: LRA
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Investor Presentation October 2012
Creating Value Through Discovery in South America
“Creating Value Through Exploration, Acquisitions and Discovery”
TSX.V: LRA
Forward Looking Statements
Except for statements of historical fact rela3ng to the Company, certain informa3on contained herein cons3tutes forward-‐looking statements. Forward-‐looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “an3cipate” and other similar words, or statements that certain events or condi3ons “may” or “will” occur. Forward-‐looking statements are based on the opinions and es3mates of management on the date the statements are made, and are subject to a variety of risks and uncertain3es and other factors that could cause actual events or results to differ materially from those projected in the forward-‐looking statements. There can be no assurance that such forward-‐looking statements will prove to be accurate, as actual results and future events could differ materially from those an3cipated in such statements. Accordingly, readers should not place undue reliance on such statements. The Company does not undertake to update any forward-‐looking statements that are incorporated by reference herein, except in accordance with applicable securi3es laws. For a descrip3on of material factors that could cause the Company’s actual results to differ materially from the forward-‐looking statements, please review the Company’s Prospectus, Annual Informa3on Form, and MD&A filed on www.sedar.com. The Qualified Person (QP) for projects in China and Peru is Andre Gauthier. The Qualified Person (QP) for projects in Brazil is Mike Bennell
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TSX.V: LRA
• TSX Venture Exchange lis3ng in Canada since 2005. Opera3ons in Brazil, Peru, Chile and Colombia.
• Interna3onally recognized Management and Explora3on Team with a long-‐standing presence in South America.
• Growing por]olio of explora3on projects with 19 partnerships poten3ally delivering over $80m in cash payments and third-‐party funded explora3on.
• Well-‐funded with $6m in treasury and only 31m shares outstanding.
Company Snapshot
Management & Directors
Miles Thompson, Chairman Andre Gauthier, President Michael Bennell, VP Explora3on Chris MacIntyre, VP Corporate David Miles, CFO
Kim Casswell, Corp Secretary Noel Diaz, GM Peru
Helio Ikeda, Manager Brazil
Independent Directors
Michael Winn
Byron King Adrian Calvert
Chris Jones
Share Capital Price Shares % Total Fully Diluted Cash
Shares Outstanding $1.35 30,499,687 83% 6,570,000
Warrants $1.85 4,683,175 11% 7,553,800
Op3ons $1.04 2,436,875 6% 2,542,350
Fully Diluted Shares 37,019,697 100% 16,666,150
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TSX.V: LRA
Prospects – our business is acquiring mineral prospects and performing enough work on them to define targets and akract outside capital to fund on-‐going explora3on and development work
Alliances – we conduct high-‐risk genera3ve work for specific commodi3es in specific regions, funded by partners, with any targets acquired then go into Joint Ventures Joint Ventures – we retain risk-‐free minority interests in the prospects we generate ourselves and through Alliances, shares in partner companies and/or royal3es in our projects, remaining exposed to the outstanding returns possible when a substan3al discovery is made
Risk – this low-‐risk approach makes Lara a more sustainable business with limited downside risk; no individual project failure can kill the Company, while a discovery on any one of them could generate substan3al capital returns.
Prospect Generator Business Model
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TSX.V: LRA
Multi-Commodity Project Portfolio
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TSX.V: LRA
Option and Joint Venture Agreements
Partner Project Commodity Country Lara Residual
% Payment US$m
ExploraEon US$m
Shares m Years
Aguia Resources Sergipe Potash Brazil 25% 0.10 1.50 10.0 2 Codelco Liberdade Copper Brazil 25% 3.00 4 Avanco Resources Conceicao Nickel, PGE Brazil 25% 1.50 3 Avenue Resources North Brazil Tin Brazil 25% 2.50 4 Focus Graphite Caninde Graphite Brazil 40% 7.00 0.50 5 Redzone Resources Lara + Tingo Este Copper Peru 45% 0.85 Network Explora3on Picha Copper, Silver Peru 25%+PFS 1.20 8.00 3.00 3 Malbex Resources Grace Gold Peru 25%+FS 1.70 11.50 6 Halston Explora3on Condoroma Copper Peru 25%+FS 1.80 10.50 6 Halston Explora3on Coporaque Copper Peru 25%+FS 1.65 10.00 6 Alta Resources Atenea Gold Peru 25%+FS 1.50 6.75 7 Totals 7.95 62.25
• 5 new agreements completed in H1-‐2012 despite the very challenging market condi3ons
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TSX.V: LRA
3 Strategic Alliances
Partner Commodity Countries Lara Residual
% Payment US$m
ExploraEon US$m/Year Years
Antofagasta Copper Brazil 30% 3 0.6 3 Kiwanda Phosphate Peru, Chile, Colombia 30% 0.5 3 Kiwanda Coal Peru, Colombia 30% 0.6 3 Totals 3.00 1.7
• 3 Strategic Alliances completed in 2012
• Provide annual funding for genera3ve work, with projects developed then going into joint ventures where the partner will fund explora3on and development to earn a 70% interest
• Low-‐risk way for Lara to leverage its experience and database to acquire new joint venture project interests
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TSX.V: LRA
Listed Interests and Royalty Agreements
Partner Project Commodity Country Lara Interest Cash US$m Royalty Shares m Ver3cal Mineração Curionopolis Iron Brazil Royalty 0.80 0.75-‐1.50/t Horizonte Minerals Vila Oito Nickel Brazil Shares 8.5 Avenue Resources Sao Lourenco Tin Brazil Royalty 1.00 1.0% 3.0 Hochschild Lampa Gold Peru Royalty 2.0% CJL Capital Chocos Zinc-‐Lead Peru Royalty 0.45 2.0% Totals 2.25
• Most joint venture agreements result in a royalty interest if Lara elects not to fund its minority interest
• Market currently puts high value on royal3es and Lara intends to grow this part of its por]olio in the coming years
• The Ver3cal iron project is now permiked to begin small-‐scale produc3on and, subject comple3on of project finance, could be the first royalty to start paying out
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TSX.V: LRA
• 2011 – Lara (Cu, Mo) – Curionópolis (Cu, Au) – Curionópolis (Fe) – Liberdade (Cu) – Canabrava (VMS) – Vila Oito (Ni)
Six Drill Programs Already in 2012
• 5 out of 6 drill programs in 2011 were successful in intercep3ng significant mineraliza3on. The 4 programs completed so far in 2012 have all been similarly successful.
• 2012 – Lara (Cu, Mo) -‐ done – Curionópolis (Cu, Au) -‐ done – Curionópolis (Fe) -‐ done – São Lourenço (Sn) -‐ done – Conceição (Ni) – drilling – Liberdade (Cu) -‐ drilling
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TSX.V: LRA
Brazil Exploration Highlights
• Codelco follow-‐up drilling at Liberdade copper.
• Curionopolis high-‐grade copper target, >1% Cu breccias.
• High-‐grade 3n veins intercepted at São Lourenço.
• Potash JV with Aguia Resources • Growing pipeline of iron,
copper and graphite prospects.
• New copper Alliance with Antofagasta
• 14 projects, 7 funded by JV
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TSX.V: LRA
Peru Exploration Highlights • Drilling substan3ally
expanded footprint of the Lara Cu porphyry.
• World class epithermal district outlined at Sami.
• Grace and Corina gold targets drill-‐ready.
• Condoroma, Coporaque and Picha copper targets drill ready
• 18 projects, 11 funded by partners
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TSX.V: LRA
• 20 high sulphida3on epithermal gold and porphyry style copper-‐gold targets inden3fied.
• The large area of prospec3ve altera3on is indica3ve of district poten3al.
• Pitusaja zone of strong silica altera3on with gold values. Similar outcrops nearby suggest mineraliza3on extends under cover for several kilometres.
Sami (Peru) – District-Scale Epithermal System
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TSX.V: LRA
• Carajas -‐ Iron-‐oxide-‐copper-‐gold district with several opera3ng mines.
• Ar3sanal workings expose altera3on and copper mineraliza3on.
• Codelco drillhole FTCD-‐01 intercepted 66m at 0.5% Cu from surface and 37m at 0.52% Cu from 139.5 metres down hole.
• Follow-‐up drilling program on-‐going.
Liberdade (Brazil) – IOCG Discovery
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• Drilling has materially expanded the mineraliza3on to 2km by 0.5km.
• Low al3tude, close to infrastructure and the coast.
Lara Copper (Peru) – Mid-Size Cu-Mo Porphyry
• Purchase by Minsur of a 70% interest in the nearby Marcona -‐ Mina Justa deposit for $505 million establishes valua3on target benchmark
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• Iron forma3ons extend for over 10km within the property.
• Pilot mining license and permivng in place for small-‐ scale produc3on.
• Infill drilling, resource calcula3ons, mining planning and permivng being finalized for a full Mining License.
• Ver3cal working on project finance currently. No defined 3meline at present, but expect ~$2m/year in royal3es to Lara once in produc3on.
Vertical Iron (Brazil) - Royalty Project
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TSX.V: LRA
• Carajas – IOCG district with several opera3ng mines.
• Ar3sanal workings expose high-‐grade copper veins.
• Recent drill holes include: 53.8m at 9.59% Cu & 29.05m at 4.56% Cu
Curionopolis (Brazil) - High-Grade Copper
TSX.V: LRA
• People -‐ management has depth (10 geologists), is highly experienced technically, commercially and locally. Insiders are significant shareholders.
• Poli3cs – ac3ve in mul3ple jurisdic3ons – Brazil, Peru, Chile and Colombia. • Finance – $6m treasury sufficient for 2013-‐14. The company expects addi3onal cash
from por]olio sales, share sales and royal3es going forward. • Paper – approximately 31m shares outstanding and 37m fully diluted.
• Partnerships – over $70m of explora3on to be poten3ally paid for by joint ventures and alliances with companies from Canada, UK, Australia and South America.
• Commodi3es – diversified por]olio including Au, Ag, Sn, Cu, Ni, Fe, Zn, Pb, K, P and C (graphite) exposure.
• Por]olio -‐ includes a number of significant discoveries and projects maturing towards resource defini3on and mining.
• Payback – large diverse por]olio gives mul3ple chances of the kind of explora3on success that generates outstanding returns to shareholders, while the partnerships funding limits the downside risk.
De-Risking Exploration