Citation Resources Limited has reached an in principle agreement with Latin American Resources Limited whereby the Company will reduce to a 10% finance carried equity interest in LAR. This agreement is in line with previous announcements by the Company during 2015 whereby the Company disclosed that it was seeking to retain an equity interest in LAR and its Atzam and Tortugas Oil Projects in Guatemala through the introduction of a new farm in partner to finance LAR.
In addition to the 10% interest, the Company will also have an option to acquire an additional 5% interest by paying US$1m to LAR (or its nominee) within 12 months from completion of the agreement.
If the Company does not choose to exercise its option within the 12 month period, Citation will forfeit its 10% interest in LAR. This will allow the Company time to assess the progress of the Guatemalan projects before committing to any future expenditure on the project.