Royal Road Minerals Limited (CVE:RYR) is set to buy the La Redención gold project, which lies just 450 metres from the boundary of the group's La Golondrina project in Colombia.
It has struck a deal with optioners Oliver Acosta Benavides, Euberto Ernesto Calderón and Jesús Yerobi Santander to acquire an undivided 100% of the project in the Nariño Province of southern Colombia.
Chief executive Tim Coughlin told investors on Monday: "We are excited about this new partnership and about the potential at Mina La Redención.
“It is our view that gold mineralization at La Redención is an exposed extension of the same high-grade gold system at La Golondrina, testifying to the lateral and vertical extent of vein and hornfels-hosted gold mineralization in this area and thus to its plus million ounce potential."
The mining firm has already reported encouraging samples from La Golondrina.
To take up the option, Royal Road must assist the optioners up to US$20,000 to complete regulatory work and acquire required approvals
Then it must pay a total of US$20,000 and a further US$25,000 on or before the date that it first begins drilling on the La Redención project.
It must pay US $30,000 in three equal installments of US $10,000 on the first, second and third anniversary dates of regulatory approval and complete a minimum of 750 meters of drilling at La Redención on or before the third anniversary of the effective date of regulatory approvals
The optionors will have the right to receive a 20% net profit royalty to be paid once payback of all capital invested to explore, develop and construct the operation has been made.