potential bagger results pending, page-9

Hey Guys,

here is an e-mail that went between Nick and I just before Xmas.


Good morning Nick,

Can you please clarify the following for me, as I am unclear about your/our rights to the Arqueros Tenements.

From presentation

1. Option for 100% of Arqueros gold-silver deposit.

2. Option for 100% of Arqueros US$2.3m staged payments plus 3% NSR.

3. Area 374 hectares Laguna has option to acquire 100% of the Arqueros project from Anglo American.


Now with all the work/drilling planed over the next 12 months, who actually owns this resource? Do we own any of it (leases) or do we only have the options rights to it, I am confused as to how we could go to mining if we do not own the tenement leases or why we would even make that kind of financial commitment.


Dear TJ,

Our rights are very clear. Once we pay Anglo American the full acquisition price (US$2.3 million), title passes to us. Until that happens, we have the legal right to explore and develop the property. The payments to acquire are progressive. We paid them US$100k in Jun 09, will pay US$200k in Jun10 and the final US$2 million in Jun11. We have the right to walk from the project in which case, no further payments are made. We also have the right to pay Anglo all outstanding monies tomorrow, in which case, title passes to us tomorrow. Anglo cannot sell Arqueros to anyone else.

The resource is owned by Anglo American until the day we make the final payment. As mentioned, we (Laguna) have the power to take title anytime so for all effective and legal purposes, it is ours. When the time comes to make a mining decision and major financial commitments, we will take, or have taken title. The timing is in our hands, and we are using that to manage our cash effectively. What I mean is that rather than tying up $2.2 million in paying Anglo now, we get better value using that cash to assess the project, and pay them later when/if we decide it is a commercial mining proposition. And of course, if the project fails to meet expectations, we dont have to pay them out the balance.

I hope this helps,


Nick