Lara Exploration Ltd. (TSX VENTURE:LRA) ("Lara" or the "Company") is pleased to report that it has signed a Letter of Intent ("the Agreement") with Focus Graphite Inc. ("Focus"), whereby Focus can earn up to a 60% interest in Lara's wholly-owned Canindé Graphite Project ("the Project") in Ceará State, northeast Brazil.
Focus can earn an initial 51% interest in the Project by spending $2.5 million on exploration (including a minimum of 2,000 metres of drilling) of the Project within three years of signing a definitive agreement ($500,000 in each of the first two years and $1,500,000 in the third year) and issuing 500,000 common shares to Lara (100,000 shares on signing the definitive agreement and 400,000 shares by the third anniversary thereof). Focus can then elect to earn an additional 9% (for a total of 60%) in the Project by investing a further $4.5 million on exploration (including a minimum of 5,000 metres of drilling) and by delivering a Preliminary Economic Assessment within two years. The Agreement is binding on both parties, but subject to a 60 day due diligence period, approval of the Boards of both companies and TSX Venture Exchange approval. The parties propose to complete the definitive agreement by August 31st, 2012.
The Canindé Graphite Project comprises 15,615 hectares of exploration licenses accessible on paved highways from the state capital, Fortaleza. Reconnaissance work by Lara has identified a number of anomalous weathered bedrock outcrops with massive flake graphite bodies up to approximately 10 meters wide, associated with wider zones of lower-grade disseminated graphite flake occurrences along a 16 kilometre long, north-northwest trending zone within the property (see Company news releases of December 05, 2011 and April 11, 2012).
Focus will act as the operator of the Canindé project exploration program throughout the duration of the Agreement.
Michael Bennell, Lara's Vice President Exploration and a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM), is a Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects and has approved, and is responsible for the preparation and verification of the technical information in this release.