Lexington Moves Quickly To Capitalize On Chilean Property Option. Additional Properties Under Review Necessitate Relinquishment Of Nevada Gold Trend Option.
HENDERSON, Nev., May 2, 2012 /PRNewswire/ -- Lexington Energy Services Inc. (PINKSHEETS: LXES) (the "Company") reports that the South American rare earth and commodity mineral concessions currently under review, particularly in Chile, require the full time application of all corporate resources to fully evaluate the scope of the opportunities that these potential acquisitions represent. As a result, the Company will not be proceeding with its option to acquire an interest in various mineral leases located in the Long Canyon Gold Trend in East Central Nevada.
Lexington has agreed to provide the Nevada properties optionor 50,000 restricted shares in the capital of the Company in lieu of exercising the option as set out in the Agreement. The shares represent a good faith payment by Lexington in recognition of the optionor's extension of certain terms, as set out in the Agreement, so that the Company could pursue its due diligence of the Lota Bay Coal Project, and other South American concessions under review.
As previously reported, Lexington has entered into an Option Agreement (the "Agreement") to acquire the rights to recover a bituminous thermal coal resource that lies on the sea floor of Bahia Lota in Chile's Gulf of Arauco. The resource encompasses 275,000 proven tonnes of recoverable bituminous thermal coal with additional probable reserves of 90,000 tonnes in zone 1. Current price averaging of US$113/mt represents a potential recovery value of US$40,000,000. It should also be noted that the necessary infrastructure is in place on the site; grid power, water, sewage disposal, highway and rail access, as well as a ready labor force from the nearby city of Lota, population 52,000.
To facilitate the ongoing work program, an initial $100,000 interim convertible debenture financing has been arranged.
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