Austral Gold Argentina has agreed to set up a joint venture (JV) with Mexplort Perforaciones Mineras for new precious metal projects in Argentina.

The new 50:50 JV will focus on identifying and developing new precious metal projects in the Indio belt in the San Juan province.

According to the deal, Austral Gold will have an option to earn a 50% stake in the Mexplort’s Jaguelito advanced exploration stage project in the province.

To earn the stake, Austral is required to invest $2m in exploration work at the project within two years from the option approval by the Instituto Provincial de Exploraciones y Explotaciones Mineras de la Provincia de San Juan (IPEEM).

Furthermore, Austral will have to provide $2m in exploration expenditures within two years after completing the first stage of the project.

Mexplort will also receive $3m from Austral if the board of the JV approves the project construction based on a bankable feasibility study (BFS).

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By GlobalData

Austral Gold CEO Stabro Kasaneva said: “We are investing in the Jaguelito project as we believe the project has the potential to discover a high-sulphidation deposit of the Alturas – Del Carmen or even Veladero type in Argentina.

“The Jaguelito project appears to have the same affected volcanic units that host a large zone of alteration having the same age, based on evidence of mineralisation of silver and gold intercepted in previous drilling campaigns.”

The Jaguelito project is a high-sulphidation deposit, where up to 30,000m has already been drilled.

Mexplort is a subsidiary of Corporación America International.