Chilean copper miner Antofagasta, through its subsidiary, has agreed to acquire a 70% stake in San Marco Resources’ wholly-owned Chunibas copper-silver project in Sonora State, Mexico.
As per the earn-in agreement, Antofagasta needs to spend $8m towards project costs in exchange for the interest.
The company is also required to pay San Marco an aggregate amount of $200,000 over a period of four years.
The total consideration includes a firm exploration expenditure commitment of $700,000, which will be directed towards an initial drilling programme, which is set to begin following the end of the rainy season.
Of the $700,000 commitment, $100,000 will be used to reimburse San Marco for the costs it incurred on recent project exploration expenses.
San Marco will serve as the project operator, guided by a technical committee that will comprise representatives from both the companies.
Once the earn-in option is exercised, the parties will form a joint venture in proportion to their respective interests in the project.
San Marco Resources CEO Chris Grijalva said: “We are pleased to have Antofagasta as a partner and look forward to a successful, team approached exploration programme on our copper/silver discovery at the Chunibas project.
“The project consists of stratiform, volcanic hosted copper-silver mineralisation, similar to several ore deposits in northern Chile and is a style of mineralisation not previously discovered in Mexico.”
Located around 160km east of Hermosillo, the Chunibas property hosts several mining concessions with an aggregate surface area of 530ha.