Precious metals miner Minera and Collingwood Peru have signed a letter of intent (LOI) to establish a joint venture to explore the Veca exploration lease located in north central Peru.
Under the terms of the LOI, Minera will initially manage and hold 60% of the joint venture with Collingwood holding the remaining 40%.
Minera will make an initial payment of $100,000 and any gold found that can be transformed into minable reserves will involve a $10 an ounce payment to Collingwood.
Minera's executive chairman Courtney Chamberlain said the Veca exploration lease represents a high-quality exploration project in one of Peru’s premier gold districts.
"La Libertad is a prolific gold producing district hosting many well known gold deposits such as Lagunas Norte, Santa Rosa and San Simon,” Chamberlain said.
"Extensive surface sampling by a previous exploration company has demonstrated good gold grades in association with geological structures and bedded partings, providing potentially open pitable, bulk tonnage drill targets."
By making a $2m payment, Minera will raise its equity in the joint venture to 70%.
In the initial year, Minera must spend at least $200,000 on exploration work and is entitled to cancel the contract without any additional obligations.