Mirasol Resources Ltd (CVE:MRZ) (OTCPINK:MRZLF) (FRA:M8R), the project generator, is partnering up with Argentina-focused Patagonia Gold Corp on its Nico and Homenaje projects, the latter of which lies next to Patagonia's Cap Oeste mine.
At Homenaje, which spans over 10,000 hectares and sits on the Deseado Massif gold-silver province, Patagonia will be able to earn an undivided 75% interest over six years by delivering a positive pre-feasibility study for a resource of no less than 300,000 ounces (oz) of gold-equivalent and spend at least US$2.55 million in exploration.
At Nico, which sits 45 kilometres (km) and 80 km north of the Mina Martha and Manantial Espejo mines, operated by Patagonia and Pan American Silver, respectively, Mirasol has transferred its interest to Patagonia in exchange for a 1.5% net smelter return (NSR) royalty.
READ: Mirasol Resources begins a 2,600 metre drill program at its Sascha Marcelina project in Argentina
"We are pleased to have completed these two transactions with Patagonia, they are a great partner for both projects given to the proximity of their operations," said Mirasol president, Tim Heenan in a statement. "We look forward to Patagonia advancing and testing both the exploration potential at the Homenaje project and the near-surface production potential at Nico."
Under the binding agreement, Patagonia, at Homenaje, must commit US$400,000 to exploration within the first 18 months, including 2,500 metres (m) of drilling, and spend a further US$750,000 within the first 30 months.
After that, it must spend a minimum of US$400,000 annually, or US$ 200,000 in any six-month period. Upon completion of the option, Mirasol will hold a 25% interest and Patagonia a 75% interest in a joint venture company.
At Nico, Mirasol will have the right to regain full ownership of the property if production has not commenced by the end of the third year.
Mirasol has seven partner-funded projects, two of which are with Newcrest Mining Ltd (Chile), and one each with First Quantum Minerals (Chile), Mine Discovery Fund (Chile), Mineria Activa (Chile), Silver Sands Resources (Argentina), and Patagonia Gold (Argentina).
The company is self-funding two projects - Inca Gold (Chile) and Sacha Marcelina (Argentina).
Contact the author at giles@proactiveinvestors.com