Cott Oil and Gas has entered into an option agreement with Eloro Resources to acquire 25% stake in La Victoria Gold Silver Project in Peru.

The property, which is held by a Peruvian-based Eloro subsidiary, is located in the prolific North-Central Mineral Belt of Peru, covering approximately 80.4km2.

Under the terms of the Agreement, Cott will have to invest up to C$5m in expenditures by 31 July 2018, to acquire the stake in La Victoria project.

It can gain an initial 10% stake in the gold silver project by expending C$2m by or before 30 October 2017. The remaining 15% stake can be earned by the company by spending additional C$3m by or before 31 July 2018.

The companies will form a joint venture at the end of the purchase of initial stake or the remaining stake on the basis of their respective interest in La Victoria.

The execution of the definitive agreement reached by the companies is subject to the satisfactory completion by Cott of its due diligence investigation of the property and also subject to the approval by the boards of directors of Eloro and Cott.

It is also subject to approval of the ASX in the case of Cott and the approval of the TSX Venture Exchange in case of Eloro.

Eloro is an exploration and mine development company which holds a 100% stake in the La Victoria Gold/Silver Project.

After selling its oil and gas assets in late 2016, Cott has been looking to diversify into the mineral resource sector.