--- ADDS BROKER COMMENT FROM CANTOR FITZGERALD AND UPDATED SHARE PRICE ---
Currently Argentina-focused, the firm is looking to acquire 100% stakes in Trilogy's Carreta Quemada and Chamizo gold projects through exploration expenditure of up to US$3.5mln and a put option on the amount of gold discovered.
"Finalisation of the requisite documentation is ongoing," Patagonia said in a statement on Wednesday, with negotiations "well advanced".
The deal will likely be structured in stages that involve no money being paid directly to private Canadian firm Triology.
It is thought that to earn 51% of the properties, Patagonia has to spend US$1.5mln on exploration over 18 months.
An exploration programme will aim to discover a potential stand-alone gold resource within 18 months.
Cantor Fitzgerald said: "The original financial terms look reasonable and we are pleased to see the cash going into the ground and not away from the projects."
The broker added that the "additional project and geographical diversity is positive" for Patagonia.
Cantor retained its buy recommendation on the stock as the market awaits the 2016 gold production guidance from the company.
Shares in Patagonia lifted more than 1.4% in early deals to 1.77p.