Antofagasta Minerals has signed an earn-in agreement with Canadian Kenorland Minerals for the Tanacross copper-gold project in eastern Alaska, US.

Under the terms of the agreement, Antofagasta gets an option to acquire a 70% stake in the project by funding all the exploration costs and making additional payments.

The company will make an upfront payment of $1m in cash, and a payment of $4m upon exercise of the option, and fund $30m for the exploration over eight years.

In addition, Antofagasta will spend $1m in the first year and deliver a preliminary economic assessment report.

Kenorland will initially serve as an operator for the project during the option period.

Upon Antofagasta earning the 70% interest, Kenorland and Antofagasta will form a 30:70 joint venture.

If any party’s joint venture interest decreases to less than 10%, its interest will be converted to a 2% NSR, one-quarter of which can be purchased by the other party for $2m.

Kenorland CEO Zach Flood said: “The property, which covers numerous mineralised systems and target areas, warrants significant exploration to unlock the discovery potential that we believe exists.

“We look forward to getting back on the ground as soon as possible to begin work which will lead towards drill-target definition.”

The Tanacross project is located around 70km northeast of Tok, along the Alaska Highway, covering more than 45,000ha of land owned by Alaska state.

The project hosts a cluster of late Cretaceous porphyry copper occurrences, including East Taurus, West Taurus, and Bluff.

It shows mineralisation similar to the Casino porphyry copper system, located 140km to the southeast in Yukon Territory, Canada, and the Tetlin Au Skarn system, located 70km to the southwest of the Tanacross project.

The project was initially discovered1971 by Duval and has seen a total of 17,076m of drilling in over 67 drill holes, in multiple drill campaigns carried out by nine different companies.

The most recent drill programme was conducted in 2019, while the property was held under an option to Freeport McMoRan.