Southern Hemisphere Mining Ltd (ASX:SUH) has signed a deal which could result in Canadian copper producer Hudbay Minerals Inc. (TSX:HBM) (NYSE:HBM) obtaining 70% of the Llahuin Copper-Gold Project in Chile.
An option agreement has been signed by the company’s subsidiary Minera Llahuin SCM with Hudbay’s subsidiary HudBay Chile SpA.
The agreement provides a path for Hudbay Chile to earn a 70% interest in the Llahuin Project by making a series of cash payments totalling US$5.8 million over five years.
Exploration commitment
It also involves Hudbay Chile committing to spend a minimum of US$3.5 million on exploration over the first three years.
A cash payment of US$50,000 was paid by Hudbay Chile to Minera Llahuin upon execution of the option agreement.
Llahuin is a highly prospective copper-gold project close to the city of Illapel in the Coquimbo Region, 250 kilometres north of Santiago.
Measured and indicated resource
The project has a measured and indicated resource of 149 million tonnes at 0.29% copper, 0.12 g/t gold and 0.008% molybdenum, or 0.41% copper equivalent.
It also has an inferred resource of 20 million tonnes at 0.20% copper, 0.19 g/t gold and 0.005% molybdenum, or 0.36% copper equivalent.
There is an opportunity to grow the resource, which is mainly from the Central Porphyry Zone, particularly from the Cerro de Oro and Ferrocarril zones.