Golden Arrow Resources has signed an option agreement with Mirasol Resources on the drill-ready Libanesa silver-gold project in Argentina.

The letter of intent (LOI) gives Golden Arrow the right to acquire a 75% undivided interest in the advanced exploration project in Santa Cruz.

In exchange, the firm is required to incur $4m in exploration work at the project and make staged cash payments totalling $1m to Mirasol, over a six-year period.

Mirasol president Tim Heenan said: “Golden Arrow has been a successful explorer in Argentina for well over a decade and will be a strong partner to advance Libanesa. Mirasol is securing the permits necessary for the start of exploration during H2 2021.”

Upon completion of the option, Golden Arrow will own a 75% stake in the participating JV company holding Libanesa. Mirasol will own the remaining 25% interest.

Golden Arrow executive chairman, president and CEO Joseph Grosso said: “Libanesa presents an excellent opportunity for discovery and provides Golden Arrow with a new exploration entry into this exciting area of Santa Cruz, which hosts multiple high-grade gold and silver mines.”

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Additionally, Golden Arrow will complete at least 2,000m of drilling at the project by the end of the second year.

Located at the north-eastern margin of the Deseado Massif Au-Ag metallogenic province, the Libanesa project hosts several diversified geological, geochemical and geophysical supported drill targets.

Earlier this year, Golden Arrow Resources signed an agreement to option its Caballos Copper-Gold Project to mineral exploration company Hanaq Argentina.

According to the deal, Hanaq will have the opportunity to earn a 70% interest in Caballos by incurring $4m on exploration at the project over a six-year period.