Golden Arrow Resources Corp (CVE:GRG) will acquire up to 100% of the Indiana gold-copper project in Chile, which is a near term production target and where there is potential to expand the deposit.
Earlier this month, the group told investors it was expanding its footprint into Chile with an agreement to acquire the 3,450 hectare Atlantida project.
Indiana lies around 35km from Atlantida.
The project features a near surface deposit of high-grade gold and copper and a historic resource.
The deposit area is permitted for mining, and there are currently two ramps allowing underground access.
"With the addition of the advanced-stage Indiana project to the recently acquired Atlantida project we solidify our presence in Chile, emphasizing our commitment to the rapid identification of new resources, and value growth for our shareholders," said Joseph Grosso, executive chairman, CEO and president.
"Indiana has the added benefit of two growth paths: a fast track to production thanks to the existing mining permit and historical resources, and exploration upside both within the known vein system and throughout the property."
Golden Arrow noted that the previous inferred mineral resource has more than 600,000 ounces of gold equivalent (AuEq) consisting of around 3.093 million tonnes averaging 2.8 g/t (grams per ton) gold and 1.6% copper, at a 4 g/t AuEq cut-off.
Flotation tests have also indicated recoveries of 90% for gold and 92% for copper for sulphide mineralization.
Golden Arrow has struck an agreement with Mineria Activa SpA (MSA) - a Chilean private equity investment management firm - over the property.
Golden Arrow must pay $100,000 payment on signing, followed by US$15 million in payments staged over 48 months.
Before it makes the last payment of $7 million at the fourth year, MSA has the option of retaining 25% of the project, which will then move forward on a pro rata basis.
Golden Arrow shares eased 3.7% to $0.26 in Toronto.
Reporting by Giles Gwinnett
giles@proactiveinvestors.com