(MENAFN - ProactiveInvestors - Australia) Red Gum Resources (ASX: RGX) is poised to further increase its South American exposure and has entered into eight separate letter agreements with private individuals for an option to acquire the Majada Copper-Gold Project.
Red Gum recently highlighted a corporate strategy to increase copper and gold exposure, with this latest deal potentially achieving the goal in the near term.
The project is located 120 kilometres south of La Serena in Region IV of northern Chile, and comprises 587 hectares of third party exploitation mineral claims, distributed in two geographically separated areas being Majada Este and Majada Oeste.
In addition, Red Gum has applied for new exploration claims adjoining the Majada Oeste area, totalling an additional 400 hectares, which will provide a buffer area in which the Company can evaluate the potential for additional extensions.
Red Gum now has 60 days to make a decision to execute formal purchase agreements to wholly acquire the project, which would then require staged cash payments over three years to the current owners.
The transaction remains subject to due diligence, formal legal documentation and final board approval - with closing scheduled for the 14th January 14 2013.
The company had over 1.6 million in cash at the end of September 2012.
1% copper and 1g/t gold
Highlighting the prospectivity of the project, numerous historical copper-gold oxide pits and workings along the mineralised trends have reported values in excess of 1% copper and 1g/t gold.
The project is under-explored as there is no evidence of previous drilling, with limited pre-existing geophysical data supports sulphide mineralisation beneath surficial oxides.