Herencia Resources, through its Chilean subsidiary Iquique Resources, has entered into an agreement to acquire a 51% controlling stake in a new copper-gold project in Chile.
Located about 750 kms north of Santiago in Region III in Chile, the Guamanga project comprises about 11.2 square kilometers in total area and is currently owned by Inversiones Santa Patricia.
According to the company, the project mineralization style appears to correspond to a potential iron oxide copper gold system.
The company earlier said that seven holes have already been drilled at this project site of which three intersected significant copper and gold mineralization at shallow levels.
Under the deal, Herencia has the right to earn a 51% controlling stake in the project by drilling a minimum of 7,500m over a 30-month period and making option payments totaling $600,100 over the same period.
The company has also the alternative to drill only 6,000m and make a further cash payment of $150,000 to Inversiones if it so chooses.
On satisfaction of these conditions, Inversiones will transfer the project into a new company (yet to be established) in which Herencia will hold 51% of the issued shares and Inversiones will hold the remaining shares.
Subject to Herencia achieving its 51% ownership stake, the joint venture parties will then contribute toward all future costs in line with their 51:49% equity ownership.