Latin Resources Ltd (ASX:LRS) is well-funded to progress its lithium and cobalt projects in Argentina after securing a $6 million convertible security funding agreement (CSFA) from The Lind Partners, New York.
The new funding will provide working capital to pursue exploration activities including the commencement of drilling at Latin’s Catamarca lithium projects in Argentina.
Latin was recently granted 13 of the 14 mining licences under application at its Catamarca projects, taking the total concessions granted in Catamarca to 21.
Favourable conversion terms for Latin
The new funding will include an initial amount of $2 million to be advanced to Latin, and a further investment of up to $4 million, subject to certain conditions having been met.
Lind will have the option, with the permission of Latin, to waive the repayment of $2.4 million for the initial amount and, instead, take a 5% direct equity ownership into the lithium projects.
It is worth noting that the CSFA has a fixed conversion price of 1.5 cents per share, which is more than double the company’s current share price of 0.7 cents.
Latin can elect to pay back the convertible note with cash at any time.
The recently granted mining licences cover existing mining areas and future zones which will be the focus of drilling over the coming months.
Importantly, the granted licences allow Latin to proceed with drill permitting and mining operational permitting.
New lithium targets identified
Latin’s geology team has been working on two new prospects in the Catamarca project area to generate drilling targets - Loma Pelada and Ipizca I.
Loma Pelada and Ipizca I are high-quality prospects with the possibility of containing significant tonnages of lithium bearing pegmatites.
Ipizca I Adit wall with widespread pink spodumene
For both the prospects, initial drill hole design for a first pass drilling program using diamond drilling has been completed with the current field work to refine the final hole locations.
The 3,180 metre drilling program will cover the entirety of each prospect in wide spaced drilling to evaluate the overall scale and orientation of the prospects.
Upon completion of the drilling and return of assays, follow-up resource definition drilling will be planned and undertaken where warranted.
La Rioja cobalt project
The company is also planning to define drill targets at its La Rioja cobalt project.
Latin’s three exploration licenses at La Rioja cover an area of 22,563 hectares that completely surrounds the historical King Tut high grade cobalt-gold mine.
The main activity in the region was in the early 1900s with a recorded production of between 60 tonnes and 80 tonnes of cobalt ore with an average grade of 1.3% cobalt.
Sources that date back to 1984 suggests the King Tut mine is the only known cobalt deposit in Argentina and contains grades usually ranging between 0.2% and 2.45% cobalt.
Unlocking lithium, cobalt bounty in Argentina
Latin has over 263,000 hectares of exploration concessions in the lithium pegmatite districts of Catamarca, San Luis and Salta Provinces, Argentina.
This is in addition to 22,563 hectares of prime cobalt exploration ground at La Rioja.
The company is also progressing its iron oxide copper-gold (IOCG) and copper porphyry projects in the Ilo region in Peru with joint venture partner First Quantum Minerals Limited (TSE:FM).