Latin Metals has entered into a binding agreement with AngloGold Argentina Exploraciones to grant the latter the option to earn up to an 80% stake in its gold exploration projects in northwestern Argentina.

The deal involves the Organullo, Ana Maria, and Trigal projects that are located in Salta Province.

As per the terms, AngloGold Argentina will have the option of initially acquiring a 75% stake by paying $2.5m. The fully-owned subsidiary of AngloGold Ashanti will also have to spend $10m on exploration expenditures pertaining to the projects within five years of the start of the option period.

Latin Metals will be entitled to get exploration results and data during the option period from AngloGold Argentina on a quarterly basis.

AngloGold Argentina can acquire an additional 5% stake in the Argentine gold exploration projects by preparing and delivering an independent measured and indicated mineral resource estimate to its partner. Besides, it has to pay $4.65 per gold equivalent ounce contained within the mineral resource estimate to Latin Metals.

Latin Metals president and CEO Keith Henderson said: “We are delighted to welcome AngloGold as an option partner. AngloGold Ashanti is the fourth largest gold producer globally, with operations across four continents.

“AngloGold’s investment of up to USD $12.575 million for a 75% ownership interest in the Projects is a significant investment and, if AngloGold were to exercise its top-up right for an aggregate 80% ownership, additional investments by AngloGold would include delivery of a Mineral Resource estimate and further cash payments commensurate with defined ounces to Latin Metals.”

According to Latin Metals, the Organullo project was explored and mined historically on a small scale at the Julio Verne mine in the 1930s. At that time, it had produced copper, gold, and bismuth.

The company acquired the unexplored Ana Maria project via staking. The asset features three mining claims that are partly contiguous with the Organullo project.

Trigal is a gold and silver exploration project. It was originally identified as having potential after a bulk leach extractable gold (BLEG) sampling programme carried out by Latin Metals in partnership with Newmont.

The project is contiguous with the El Quevar project, which is owned by Golden Minerals, and optioned by Barrick Gold in 2020.