Mariela Iron Ore Project (100%) – Iron / Copper / Gold

Location

The Mariela Project is located in the Islay Province of Arequipa in southern Peru. The Project is located on the PanAmerican Highway, a major transport route, and is 60km from the Ilo City Port.

The Project comprises seven concessions covering – 5,200ha which are highlighted in orange in Figure 1.

Figure 1: Location of the Mariela Project concessions, crossed by the Panamerican Highway and 60 km north of the Ilo mineral port. Latin’s Ilo Norte and Ilo Este projects are also marked.

Drilling commenced during May 2012. The program is being managed by the Junefield Group. Twenty diamond drill holes are planned to test a coincident magnetic-gravity anomaly, as detailed below.

Geophysical Survey

Initial mapping at Mariela identified intrusive rocks in the west of the concession block, and volcanic and sedimentary rocks to the east and north-east. A significant portion of the concessions are covered by distal colluvial material that obscures underlying geology.

Historical government regional aero-magnetic data included a significant magnetic anomaly in the area and was one of the reasons LRS purchased these concessions.

A magnetic survey was completed over twenty nine lines, for a total length of 95.4km. The magnetic data gathered was of good quality and reliable for further processing and modelling. Part of line 230000mE was measured twice for quality control and the results of both profiles are comparable although the repeats were not exactly at the very same coordinates.

The magnetic relief on Mariela is rather smooth suggesting a thick sand layer over most of the grid except for a few shallow magnetic responses scattered in the center of the grid. The below map indicates two magnetic backgrounds. The lowest one and the most magnetic extends in the southern half of the grid indicating a magnetic rock unit contrasting with the highest magnetic background in the northern part of the grid over weaker magnetic susceptibility rock unit.

A broad negative magnetic anomaly was outlined in the southern unit rock centered along line 230200mE, station 8107700mN. The anomaly extends further towards the north and forms a positive shoulder.

A “straight forward” model was completed in order to match the measured total magnetic field. The model extends 500 meters on both sides of line 230200nE, and over 3,000 meters in the N-S direction. The magnetic susceptibility used for the magnetic body is 1.0 SI which corresponds to approximately 30% of magnetite.

The body extends at depth between 30 and 100 meters below the surface. The thick part of the mineralisation of up to 200m in the thickness corresponds to the negative magnetic response whilst the positive part corresponds to a gently dipping extension in the northern part of the anomaly.

Figure 2: Total field data and imaging from the ground magnetic survey at Mariela showing a clear bi-polar anomaly with a strong positive in red and a strong negative in blue. The thickest part of the modelled magnetic body source corresponds to the negative (blue) part of the anomaly. The North South Section along the 230200mE line that appears in figure 3 is marked with red arrows. Mining concessions Essendon 1 and Bombers 1, 3 and 4 are Latin concessions. Concessions Dylan III and IV are owned by third parties.

Figure 3: North/South section along 230200mE survey line showing the modelled magnetic body in blue solid. The section line is marked with red arrows in Figure 2.

Figure 4: Mariela  - 3D Gravity Model

In July 2012, LRS announced that Junefield has informed the completion of the first three drill holes of the planned 20 hole program at Mariela.

Table 1: Drill collar information from the first three holes completed at Mariela as at 30.07.2012

Junefield moved a second diamond rig onto the project after completion of first hole to 797 m depth.

Junefield appointed SRK consultants in July 2012 to oversee logging, sampling and analysis of drill core and to provide Latin with JORC compliant exploration results and resource estimates.

Figure 5: Mariela Drilling Program (12,000m)

Earn-In Option Agreement

LRS has signed an Earn–In Option Agreement with Total Genius Iron Mining SAC (Iron Mining), a wholly owned subsidiary of the Junefield Group. The key terms of the agreement are:

1. A$ 700,000 cash payable to PLR at signing date;
2. Iron Mining to earn up to 70% interest on Mariela and Dylan concessions by funding all activities up to completion of a Bankable Feasibility Study or to a total cost of A$35M;
3. If Iron Mining fails to implement the exploration program for the Project in accordance with the terms of the agreement within four years from the agreement coming into effect, PLR will have the right to terminate the agreement and retain 100% ownership of the Project.

The Earn-In Agreement provides LRS with a free-carry to the stage of developing the Project for commencement of production.