Elementos (ASX:ELT) has secured an option to earn a 50% interest in a copper exploration project located in a major copper-gold district in central Chile from HMC Gold.
The company can earn the stake by spending US$7 million (A$6.5 million) on exploration and development over three years.
The option covers the Cerrilo Tamaya (Tamaya) copper project in Chile which comprises 5,690 hectares and 1,200 hectares of mining concessions and exploration applications respectively.
Tamaya is located in the Cerrilo Tamaya historic mining district which reported historical production of 2 million tonnes at 12% copper and has excellent exploration, mining and development infrastructure.
These include a network of graded tracks that link to asphalt roads 5 kilometres either side of the property; the Pan-American highway 15 kilometres to the east; mining support services at La Serena and a bulk handling port at regional capital and port of Coquimbo, which is just 55 kilometres to the south.
Local services and accommodation can be found in the town of Ovalle, 15 kilometres east, while high voltage power lines run along the Pan American Highway.
The district also hosts a number of other deposits such as Andacollo, El Espino, Tres Valles, and Punitaqui.
Producing mines in the region include the Las Ventanas copper mine and the El Tambo gold mine.
Tamaya has extensive oxide and sulphide mineralisation evident at surface over the main 4 kilometre long vein system and has potential for secondary veins and deeper mineralisation along the main trend, as well as bulk-tonnage breccia and stratiform mineralisation.
Elementos added the area has never been explored using modern day techniques.
The company plans to test the remnants of the known mineralisation whilst exploring for new targets.
Elementos will carry out mapping, sampling, alteration studies, geophysics and drilling. First drill tests are expected within the first year.
This is aimed at investigating the potential for delineating a copper oxide resource capable of development into a solvent extraction and electro-winning operation.
Exploration for sulphide copper-gold mineralisation for on-site treatment by flotation into concentrates while the company will test the old tailings dam and extensive historic waste piles for their grade and tonnage potential.
Elementos will manage and fund all exploration activities, including 5000 metres of drilling, to a total of US$7 million.
On completion of the earn-in Period, a contributing joint venture managed by Elementos will be formed for continued exploration, evaluation and development
The deal is subject to a 45-day due diligence and finalisation of the shareholders and option agreements.
The option agreement over Tamaya follows closely on yesterday's announcement of an option to acquire a 90% interest over the Mercedes copper project in northern Chile.
Mercedes comprises 8,589 hectares of mining concessions and 21,200 hectares of exploration permit applications near to a region hosting large mines and deposits including BHP Billiton's (ASX: BHP) 64 million tonne at 1.01% copper-oxide and 222 million tonne at 0.91% copper sulphide Spence mine.