ACE Investors

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By Team Ace Investors

Company Overview

Latin ResourcesLimited ("LRS" or the "Company) is an Australian-based mineral exploration company with projects in South America and Australia that is developing mineral projects in commodities that progress global efforts towards Net Zero emissions. The Company is focused on its flagship Salinas Lithium Project in the pro-mining district of Minas Gerais, Brazil, where the Company has defined its maiden JORC Mineral Resource Estimate at the Colina Lithium Deposit of 13.3Mt @ 1.2% Li2O.

Significant upside growth potential has been established at Colina, with an exploration target of 13.5Mt to 22Mt @ 1.2% – 1.5 % Li2O. Latin has commenced a 65,000m drilling campaign at the Colina and Colina West Deposits to fast-track rapid resource growth. Latin also holds the Catamarca Lithium Project in Argentina and, through developing these assets, aims to become one of the key lithium players to feed the world's insatiable appetite for battery metals.

During the quarter, the Company progressed activities at its Salinas Lithium Project in Brazil, announcing the Maiden Mineral Resource Estimate (MRE) for the Colina Deposit, identifying the new discovery at Colina West, and reporting further positive results from ongoing metallurgical test work. At the Cloud Nine Halloysite-Kaolin Project in Western Australia, the Company upgraded the MRE, completed the excavation of the test pit and collected bulk samples for offtake discussions.

The Company has made significant progress across its project portfolio and has announced the Maiden JORC Mineral Resource Estimate for the Colina Lithium Deposit and the significant upside identified in the Exploration Target Range. Add to this the high-grade results from its adjacent discoveries, Colina West and Colina South; it gives it great confidence that the Company will extend the potential of the Salinas Lithium Project.

Technical Chart

Note – the stock chart indicates that the stock has started its upward territory, and investors can expect this trend to continue from there. Based on Gapped Up, and Stochastic Buy SignalIndicators, the stock chart indicates a buy case.

Investment Rationale

Expanded the Salinas Lithium Project Tenure – In February 2023, the Company provided an update on the expansion of the Salinas Lithium Project in Brazil, which hosts the Company's 100% owned Colina Lithium Deposit. 17 new applications covering over 29,940 hectares have been lodged with the Brazilian National Mining Agency (ANM) over what the Company believes to be areas that contain favourable basement lithologies to host lithium-bearing pegmatites, like those found at Colina. These new tenements represent an expansion of approximately 367% over the Company's previous holdings to a total of over 38,000 hectares now under Latin's control. The Company has also secured the rights to additional mining rights directly adjacent to the South of Colina, where drilling by the Company has confirmed the extension of the Colina host lithologies and pegmatitic intrusive bodies (assay results pending) by signing a new option agreement. The current 65,000m diamond drilling program, which commenced in early January, will focus on the expansion of the existing Colina Mineral Resource Estimate to the west and south. The Company will also undertake first-pass reconnaissance drilling at the existing Salinas South and Lajinha Prospect areas in the coming months.
Significant upside growth potential identified at Colina – During the quarter, the Company completed resource definition drilling and received final assay results confirming the continuity of high-grade at depth and along strike. Latin commissioned Toronto-based independent resource consultants, SGS Geological Services (SGS), to undertake the estimation of the MRE and a wider Exploration Target Range (ETR) for the Colina Lithium Deposit. Based on assay results from a total of 47 diamond drill holes for some 10,528m of drilling, SGS independently estimated the maiden Mineral Resource for the Colina Deposit in only ten months since the commencement of drilling in early 2022. Of the 57 diamond drill holes completed at the cut-off date, 47 drill holes have assay results used for the MRE to produce a JORC Indicated and Inferred Mineral Resource Estimate of 13.3 Mt @1.2% Li2O (2.08 Mt Indicated and 11.17 Mt Inferred). SGS also estimated a JORC ETR of 13.5 – 22 Mt with a grade range of 1.2 – 1.5% Li2O for the Colina Deposit based on data from all the available 57 diamond drill holes.

ACE's Recommendation

The Salinas Lithium Project is continuing to grow to potentially become one of the world's leading lithium projects with this expanded tenement package. Latin Resources is looking forward to significant progress on its projects in South America in 2023. The focus for the Company will be on growing its JORC Resource at its Salinas Lithium Project and completing its feasibility studies. It is expecting 2023 to be a watershed year in Latin's 15 years of operations.

The Company's proprietary knowledge gained over the past 12 months throughout the resource definition drilling of Colina, coupled with its understanding of the wider regional controls to mineralisation in this area, has enabled it to identify these opportunities to secure what we believe are favourable exploration areas for the Company.

Recent drilling is showing very positive signs that Colina West will become a major contributor to the Salinas lithium JORC Resource upgrade. The Company is seeing a significant increase in the abundance and thickness of spodumene pegmatites developed at Colina West, with this emerging priority area now extending over 500m along strike and 300m up‐dip. The Company will continue to target this area with more drilling to ascertain its limits and to provide sufficient drill coverage to include this area in its planned Mineral Resource update scheduled for the second quarter of this year. We recommend the stock as BUY at the closing price of $0.12.

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