Australia-based Bastion Minerals is to acquire the San Juan Gold Project in Chile’s Atacama Region.

The company has signed a binding framework agreement for executing a mining purchase option contract with Sociedad Minera del Norte (SMDN) regarding the acquisition.

The agreement provides Bastion with the option to acquire a 100% stake in the gold project, as well as surrounding licences within Capote Mining District.

As agreed, the purchase option agreement will be signed within 45 days after the completion of Bastion due diligence. During the option period, Bastion can conduct exploration works on the licences.

A $1.5m total consideration will be paid for the acquisition along with other commitments.

Bastion expects that the deal has the potential to transform it into a gold producer.

The San Juan Gold Project includes 18 mining licences within an 11.5km² area.

According to Bastion, the tenements included in the deal are strategically located within its holding in the Capote Mining District. It also includes the high-grade San Juan, Resurgemento and La Buena Gold veins systems.

Bastion executive director Ross Landles said: “This acquisition represents a rare opportunity to consolidate and control a historically significant high-grade gold system covering approximately 30km².

“The potential of this new tenement package cannot be understated and represents the execution of Bastion’s corporate strategy to identify, acquire and explore high-grade gold districts that have been locked up for several decades and missed any modern exploration methods.

“This is a very exciting and pivotal period for Bastion as we fast-track drilling at Capote, our in-country exploration team is on the ground at Capote finalising drill targets with drilling scheduled to commence in September.”