ASX/Media Announcement 8 September 2016 Latitude strengthens its position in WA s Mt Ida goldfield with acquisition of Mt Ida South project Recapitalised explorer more than triples its ground holding in one of Australia s most prospective emerging gold belts Highlights Binding term sheet to acquire 80% interest in Mt Ida South gold project More than triples Latitude s regional land holding to over 250km 2 Tenements contiguous with Latitude s recently acquired Quinn Hills/Mt Ida projects Project contains numerous historical gold prospects, which have never been followed up Tenements surround high grade Mt Ida deposit, owned by Eastern Goldfields (ASX: EGS) Expanded ground package provides a pipeline of outstanding targets for gold exploration with drilling programs to be fast tracked over the coming months Latitude Consolidated Limited (ASX: LCD) ( Latitude or the Company ) is pleased to advise that it will significantly expand its strategic footprint in WA s highly prospective Mt Ida greenstone belt after reaching agreement to acquire the Mt Ida South gold project from a private consortium. The deal, which follows its recently completed acquisition of the nearby Mt Ida South and Quinn Hills tenement packages, will provide a major boost to the Company s strategy to acquire and develop a portfolio of advanced gold exploration projects in this emerging gold province. Following the acquisition, the recapitalised gold explorer will control more than 250 square kilometres of tenements covering a significant portion of the highly prospective but under explored Mt Ida greenstone belt. Regionally, the area is bounded by the Zuleika and Mt Ida faults and has proven to be a historically prolific area of gold endowment. The Company has signed a binding term sheet with a private consortium ( Vendor ) for the acquisition of an 80 per cent interest in the Mt Ida South gold project. The Mount Ida South project comprises a portfolio of eight tenements immediately adjoining the Company s existing tenement package, which was acquired through the recently completed transaction with MGK Resources Pty Ltd (see Figure 1 and Annexure 1). The Mt Ida South package includes two granted tenements and six tenements currently awaiting grant by the Department of Minerals and Petroleum. The granted tenements will be transferred to Latitude on completion of the acquisition and the pending tenements will be transferred upon granting (assuming they are not granted before completion). The Company s expanded Mt Ida tenement portfolio is located in the heart of a highly prospective yet under explored gold district, but one which is attracting a growing level of exploration activity. The Mt Ida greenstone belt also hosts the high grade Mt Ida underground deposit, owned by Eastern Goldfields Ltd (ASX: EGS), which is surrounded by the newly acquired tenement package (see Figure 1).
Eastern Goldfields has announced that it is aiming to develop a standalone mill at Mt Ida to establish a second processing hub alongside its Davyhurst project, where production is scheduled to commence later this year. It also recently announced a joint venture and strategic alliance with Intermin Resources, including a farm in deal on Intermin s nearby Menzies and Goongarrie gold projects, as part of a regional consolidation strategy. Latitude s CEO, Mike Edwards, said the acquisition of the Mount Ida South project was a significant coup for the Company. This is a an extremely valuable and strategic ground package which complements and adds critical mass to our existing Quinn Hills and Mt Ida projects, he said. As a result of this deal, we will more than triple our ground holdings in the Mt Ida greenstone belt, which has emerged recently as one of the most exciting gold districts in the Eastern Goldfields. The tenements contain numerous historical workings, an extensive strike length of prospective greenstone belt stratigraphy and multiple walk up drill targets. Together with our existing projects which contain established JORC 2004 compliant resources we will have a very strong pipeline of exploration opportunities to pursue over the coming months. We look forward to updating the market in the near future on our exploration strategy, including our plans to commence drilling at the Quinn Hills and Mt Ida projects in the next few weeks. Acquisition Terms Payment of an option fee of $5,000 plus GST for a 21 day exclusive due diligence period. This option fee has already been paid. Following completion of successful due diligence and upon exercise of the option, as consideration for the acquisition of the Mt Ida South Project: o issue of 2,000,000 fully paid ordinary shares; o issue of 6,000,000 options (all subject to shareholder approval at the Company s upcoming Annual General Meeting), with the following terms 2,000,000 unlisted options exercisable at $0.08 each within two years from issue date; 2,000,000 unlisted options exercisable at $0.15 each within three years from issue date; and 2,000,000 unlisted options exercisable at $0.25 each within four years from issue date. The acquisition must be completed by 30 November 2016.
Figure 1. Latitude Consolidated tenement package.
Figure 2. Regional view of the Quinns and Mt Ida South package
Capital Raising The Company recently finalised its Tranche 2 placement, securing a further $431,654 through the issue of 10,791,350 shares at $0.04 per share. Further, the Company announced on 29 August 2016 that its entitlements issue, which was undertaken to existing shareholders on a 2 for 5 basis at $0.04 per share, raised $402,130.64 through the issue of 10,053,266 shares at $0.04 per share. The shortfall of the Entitlements Issue was 7,497,352 shares, which Directors intend to place within the approved three month period. The successful placement of these shares would raise a further $299,894. The Company had approximately $1.15 million cash on hand as at 31 August 2016, after completion of the Tranche 2 Placement and Entitlements Issue, which does not include any cash to be received from the Entitlements Issue Shortfall. Capital Structure Post Transaction The indicative effect of the capital raising and transaction on the capital structure of the Company will be as follows: Ordinary Shares Options Performance Shares Current issued capital 76,279,143 1,534,857 4,000,000 Securities to be issued pursuant to the Transaction (1) Placement of Shortfall of the Entitlements Issue (2) to raise a further $299,894 Capital Structure on completion of the Shortfall and Transaction 2,000,000 6,000,000 (3) 7,497,352 85,776,495 7,534,857 4,000,000 (1) Issue of 2,000,000 shares in accordance with the binding agreement with the Vendors upon exercising the options to acquire. The shares are to be issued under the Company s 15% placement capacity. (2) Shortfall in relation to the Entitlements Issue, refer to ASX announcement on 29 August 2016. (3) Subject to shareholder approval of the Options at the upcoming Annual General Meeting. a. 2,000,000 unlisted options exercisable at $0.08 each within two years from issue date; b. 2,000,000 unlisted options exercisable at $0.15 each within three years from issue date; and c. 2,000,000 unlisted options exercisable at $0.25 each within four years from issue date.
Experienced Team Michael Edwards is a Geologist and Economist with over 20 years experience in Senior Management in both the private and public sector. Mr Edwards has served as CEO and Director with a number of ASX listed resource exploration companies. Tim Moore holds several other Board positions with private companies and has successfully invested in a number of industries including media and resources. Roger Steinepreis is the Chairman of Steinepreis Paganin, a leading WA corporate law firm. Mr Steinepreis has been practising as a lawyer for more than 25 years and is the legal adviser to a number of public companies on a wide range of corporate and resources related matters, as well as serving as a Director of a number of ASX listed companies. Morgan Barron is a Chartered Accountant with more than 15 years in corporate advisory and has advised and guided many companies in a range of corporate and compliance activities. In addition, Mr Barron has been involved in numerous corporate reconstructions and mergers and acquisitions. Mr Barron is also a director and shareholder of Ventnor Capital Pty Ltd and Ventnor Securities Pty Ltd. Competent Person s Statement: The information included in this report that relates to Historical Exploration Results is based on information compiled by Michael Edwards, B.Sc, B.Bus, Grad dip OEN, a competent person who is a member of the Australian Institute of Geoscientists. Mr. Edwards is currently acting CEO for the Company and holds a direct interest in Latitude Consolidated. Mr. Edwards has worked as a geologist in regional exploration, mine evaluation roles for over 10 years in precious and base metal deposits. Mr. Edwards has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Edwards consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. For more information, please contact: Michael Edwards Chief Executive Officer (p) 08 9482 0550 (e) medwards@latitudeconsolidated.com Nicholas Read/Paul Armstrong Read Corporate Investor and Public Relations (p) 08 9388 1474 (e) nicholas@readcorporate.com.au About the Company Latitude Consolidated (ASX:LCD) is an ASX listed Perth based Resources company with a focus on acquiring and developing near term gold production assets as well advanced greenfields and brownfields gold projects predominantly in Western Australia. On 1 st of September 2016 the Company announced that it had completed the acquisition of 100% of the issued capital of MGK Resources Pty Ltd which holds the Quinn Hills and Mt Ida South projects which are located approximately 110km west of Leonora in the Eastern Goldfields of Western Australia. The Company is putting together an experienced team that is actively seeking new projects in the region.
Annexure A Permit Schedule Tenement Block Size Grant Date E29/921 28 BL 16/11/2016 E29/900 30 BL Grant pending E29/901 4 BL 30/11/2016 E29/969 11 BL Grant pending E29/970 2 BL Grant pending E29/971 1 BL Grant pending E29/973 3 BL Grant pending E29/992 20 BL Grant pending