(MENAFN - ProactiveInvestors - Australia) Argentina Mining (ASX: AVK) has inked a non-binding memorandum of understanding with New Destiny Mining (TSX.V: NED), which plans to acquire a joint venture interest in Argentina Mining's Cerro Blanco Project.
The project is situated 36 kilometres southwest of the township of Barreal in the Calingasta Valley in San Juan Province, Argentina.
The key terms of the agreement are confidential, but include cash payments, equity in the share capital of New Destiny and provision for Argentina Mining to maintain significant equity in the Cerro Blanco Project.
Equity in New Destiny provides Argentina Mining exposure to the Canadian market.
Under the agreement, New Destiny will commit to a substantial drilling-based exploration program and assume responsibility for all remaining option payments to the vendor of Cerro Blanco.
Independence Group (ASX: IGO) has provided a positive response to the memorandum of understanding and the underlying Term Sheet between Argentina Mining and New Destiny.
The company has agreed to waive its First Right of Refusal and Claw-back under the Subscription and Alliance Agreement signed between Argentina Mining and Independence Group in January 2011.
This deal enables Argentina Mining to focus on advancing its other key projects with epithermal gold-silver and porphyry copper-gold potential.
The definitive terms will be finalised in a binding agreement after the due diligence period, with a formal agreement slated for between the end of 2012 and the end of January 2013.
A new phase of mapping and geophysical interpretation has been undertaken at the Cerro Blanco Project, with a minimum of four new high-priority target areas being defined.
The main prospect at the project is the Copper Hill Prospect, where further geological mapping and interpretation of the results of the late 2011 IP-Res/3D-Mag geophysics programs has been undertaken to refine targeting of future diamond drilling.
The Copper Hill porphyry copper-gold-molybdenum deposit shares the characteristics of other well-known, large-scale Andean porphyry copper-style deposits.
The mineralised porphyry system has a diameter of 1.2 kilometres in surface outcrop, and has potential for mineralisation to depths exceeding 1,000 metres.
Drilling has intersected all four key elements of a porphyry copper system, indicating a high exploration potential for the project.
The gold content is higher than normally seen in similar Chilean copper deposits, and there is the potential for higher copper grades and large tonnages to 1000 metres depth.