Solaris Copper Chile has signed a definitive earn-in option agreement with Minera Freeport-McMoRan South America (Freeport) with respect to the latter’s Tamarugo property in Chile.

Spread over an area of 5,100ha, the Tamarugo property is located in northern Chile approximately 85km northeast of Copiapo and nearly 65km southwest of Codelco’s El Salvador Copper Mine.

It is known to host porphyry copper deposits.

Solaris Copper CEO Greg Smith said: “We are pleased to build on our existing relationship with Freeport in Chile as they advance our Ricardo property and we commence exploration at Tamarugo.

“Tamarugo was selected for Solaris by J. David Lowell, the leading expert on copper porphyry exploration.”

Under the terms of the option agreement, Solaris Chile will earn a 75% interest in Tamarugo for $5.5m and the delivery of a pre-feasibility study of the Tamarugo mine, subject to a back-in right in favour of Freeport.

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Solaris Chile will pay $4m in exploration expenditures over a period of four years to earn an initial 51% interest in Tamarugo.

The company will also pay an initial 1,000,000 warrants exercisable for three years into common shares of Solaris priced at C$0.35 ($0.26) a share and an additional one million common shares of Solaris upon discovering potential economic mineralisation at Tamarugo.

Other Solaris projects include the 100%-owned Warintza copper-molybdenum property in Ecuador and the 60%-owned La Verde copper-silver-gold property in Mexico.

Last October, Minera Freeport-McMoRan signed an option agreement with Solaris Copper’s subsidiary Minera Ricardo Resources to acquire up to 80% in the Ricardo copper-molybdenum property in Chile.