Latin Resources (ASX:LRS) Presentation, FNN Online Investor Event, October 2020

Company Presentations

Latin Resources (ASX:LRS) Executive Director Chris Gale provides an update on the company, discussing the Yarara Gold Project, the Noombenberry Halloysite Project, and the company's Latin American projects.

I'm going to give you an update on Latin Resources. Latin Resources has now been going for just over 10 years. Matter of fact, this September was our tenth year anniversary as a listed company.

Turn to the next slide, please, Clive.

Disclaimer for those people who have come through, disclaimer, it's there.

So, next slide, please.

Okay, so I'll just mention, major focus at Latin Resources over the last 10 years has been particularly in Peru, Argentina, and a couple of projects in Brazil. But more recent times, we've been able to secure and power our business model is to develop a project at a certain level and attract a high end joint venture partner. Pleased to say now that both of our projects in South America, our project in Peru, and certainly our lithium project in Argentina is now being fully funded by JV Partners. So in recent times, we've moved into Australia.

Earlier this year, we actually secured the Yarara gold project in New South Wales, which forms part of the Lachlan Fold belt. We also, late last year or so, October/November last year, secured a Halloysite project in West Australia. And as I mentioned earlier, First Quantum are our joint venture partner on Peru copper project, and also just secured in more recent times, Integra Capital, a large investment group, to help us develop our lithium projects in Argentina. So fundamentally, our South American projects are now fully funded, and we have 100 per cent focus on Australia with our projects there.

We'll move to the next slide, please, Clive.

I'll just run through our Australian projects.

Next slide, please, Clive.

The Yarara gold project in the Lachlan Fold, New South Wales, as we know there are some great mines sitting out there in the Lachlan Fold, Cadia, and a few of those others. We've picked a group of projects and one of the things that we've found over the years is that it's always good to go back to where perhaps the historical mining has been initially created some... this is well over 100 years ago. The old timers went down there actually looking for gold. There's a lot of historical gold mines sitting on this particular project.

Move to the next slide, Clive, please, now.

These projects, high grade, narrow vein type structures, we've actually secured now all of these, all granted, and following the granting, we're now in the process of talking to landowners. Part of that process is to talk to landowners, get their permission to move onto their land, look at some of those mines. There's some great names in there. Billabong, Rangitara, Just In Time, Perseverance, Four Mile Creek, Peep-O-Day, Discovery and Hidden Treasure. All high grade mines. And obviously, most of these, they couldn't get to depth. Obviously, they drilled shafts to probably 30 to 40, maybe 50 metres. But what we're going to do now is obviously carry out new age exploration efforts. Carried out some geophysics recently, using the old data, reinterpreting the geophysics, and we're now going to start building a model around actually drilling program.

Next slide, please, Clive.

As you can see by this area, very flat. Great infrastructure, roads, et cetera. So the next steps for these projects is actually find our data, finish doing that sense interpretation. We've got currently now approximately three landowners access agreements signed, so in those priority areas that we're focusing in, those areas I mentioned earlier, once that access application is completed, we're going to run some reconnaissance geochemical sampling over those areas. Land disturbance applications are being submitted, which means that once those permits are approved, we can actually get onto the ground, run some exploration field work to define those drill locations as drill targets, and start our drilling program. We hope to be in position by the end of this year to have all that in place and start drilling the first quarter of 2021.

Next slide, please.

Okay, I'll move on to the Noombenberry Halloysite project, Merredin, here in Western Australia. It's just great to have a project that I can jump in the car and drive three hours to visit that site, as opposed to South America, when you're in the air for 24 hours, and jump in a car for six hours to get to the site. So, it's a breath of fresh air for myself and our exploration team. A total of 17 sites, we've actually investigated throughout this particular area, we bought this project, as I said, early October of last year, and fundamentally what we're looking for is high grade kaolin, and in particular, a mineral called Halloysite, which I'll describe in the next few slides.

Next slide, please.

So, soft rock halloysite project here in Merredin, the actual halloysite itself, it's very important to have this project. Kaolin is fundamentally... The grade kaolin is not easy to come upon. What's important here is to find a project that has high grade kaolin, as well as Halloysite through this particular project. Now these projects, traditional applications for kaolin and halloysite have been paper and ceramics. New applications we're seeing, particularly for halloysite, is nanotechnology, batteries, technology products, homes, et cetera, and construction products. So, getting a great more demand for these projects, because of the actual applications of recent products.

Next slide, please, Clive.

We actually did some surface sampling at the project round about January of this year. We actually sent those samples off to a specialist first test minerals laboratory in the UK, which specialises in this particular mineral.

Just go to the next slide, please, Clive.

And what we found there is that this particular project actually contained halloysite, which was quite exciting for us at the time. Some good grades there in kaolin as well. We had some kaolinite up there at about 76%, 15% halloysite. All these grades, excellent on the surface.

So what we intend on doing now...

Move to the next slide, please, Clive to start the drilling program. So, the drill permits are in. It's a position now where we hope to start drilling these projects some time in November, drill for around 20 to 50 metres deep. The highlight aspect, finishing this drilling, is to come up with a third JORC resource, obviously if the grades come up as we've seen on surface. Thanks, Clive.

Next slide.

Okay, we'll run through our South American projects now.

Next slide, please.

So, in Catamarca, which we recently announced, secured a JV partner with a company called Integra Capital which is a private equity group in Argentina is a significant sized project. We have the largest land hole, hard rock spodumene in Argentina. Massive pegmatite structures throughout this project. Lucky enough to secure Integra and this is a market that's gone public now is that Integra will become our largest shareholder, taking a 10% stake in Latin resources. So they not only like the product we are giving, they like the company as well, which is fantastic for us.

Next slide, please.

So, this particular drilling program we carried out in 2017, very high grade, through Catamarca at the Ancasti and Villisman projects. What Integra really like about this project was the grade. We typically see a higher grade than we do here in Western Australia in the spodumene in Argentina, and one of the things that's great about the tender, they have two projects that I might consult on, based on the sense in helping us to go, our hard rock project, hopefully build a company into a world-class lithium producer.

Next slide.

Just a little bit on our... a couple of projects in Peru. In 2010/2011, we staked over 100,000 hectares, one of the largest copper districts in South America, called Ilo Sur Copper. There's three big mines through there who've been operating in this area for well over 70 years. It's a port, it's a refinery, fantastic infrastructure. These mines produce around 400,000 to 500,000 tons of copper each year, and are pushing out through the port Ilo. So we're are about 60/70 kilometres from that particular port].

Next slide, please.

Around three years ago, we actually went through some of the data that we had actually compiled with First Quantum, showed what we actually had found in that particular area, and we worked a deal with First Quantum where they would fund our project, and our position, we're finishing off the geophysics. Once that geophysics is finished, we believe by the end of the year, we'll have a couple of drill targets, and hopefully start drilling that pretty quickly. The major problem is the Covid issue, see a lot worse than what it was here. Still getting around 60,000 to 70,000 cases a day, which is terrible. But we believe that pretty soon we may be able to get out in the field and start that program up again.

One of the other things that we did recently in 2018 was secure a listed company in Toronto, the Toronto Stock Exchange, called Westminster Resources. It was sold with other copper projects into the Westminster shell, which we actually control 30% of now, so we could focus on our lithium projects in Argentina.

Next slide, please.

Westminster now control those other projects that we actually had drilled, and had some recent results from that. So we're really looking forward to working with Westminster over the next 12 months to reinvigorate these projects and start a drilling campaign on that, because we're a big believer in battery metals, a big believer in lithium, obviously, copper, and we think that... I noticed the previous speaker was from Acorn. They're big believers in what's about to happen. And so are we. So watch this space.

Next slide, please.

The next steps for us, through October till December, continue exploration work on the Yarara gold project. Once permits are approved, we'll commence the drilling program on the Yarara. We hope to start drilling the Noombenberry project next month. We're just waiting for those permits there. So, the fieldwork to commence now in Argentinian lithium projects. Once again, COVID restrictions pending there. And soon to be finishing off our geophysics program into three projects, a couple of projects in Peru, we'll hopefully start drilling. So, lots of news are coming up in the next three months and into 2021.

Next slide.

Company metrics, company structure. We're currently at a market cap of $19 million at a share price of two cents. We have 961 shares on issue. That's post the Integra deal, which will happen over the next few days. Options on issue. When we look at some of our peers in the Kaolin market and Andromeda, $250 million. Argent minerals, up in Lachlan Fold, $40 million. Hot Chile, the copper projects over there, $126 million. So, we've got a fair bit of catching up to do, but it's up to us to drive the fundamentals, which is getting the drilling and the results. I mentioned the top shareholders. We've got cash in hand $650,000, which doesn't include the equity we have in Westminster, which is $500,000.

That's it for me. Thank you, Clive. Any questions, obviously, we'll answer those a bit later on.


Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.