Under terms of the deal, Hochschild will complete several exploration and investment milestones and make staged payments to Mirasol. Hochschild, with a current market valuation of about £902.78 million, will pay US$50,000 in cash on signing a formal agreement, and will be required to commit to spending a minimum of $800,000 in the first 18-month exploration programme, and to drill 1,500m within 30 months of formalising the accord.

Mirasol, valued at C$84 million, will remain the operator and receive management fees under the exploration contracts.

At the end of the 18-month period, Hochschild will have the right to exercise the earn-in phase of the agreement. Mirasol can choose to contribute its 30% of development expenditures or exercise an option for Hochschild to finance 100% of the development costs through to production. Under the latter scenario, Mirasol would retain a 25% interest in the project and HOC's interest would be increased to 75%.

"We are very pleased to be partnering once again with Hochschild to explore and advance one of our projects. We look forward to concluding the binding agreement and starting an aggressive exploration programme at the project," Mirasol CEO Stephen Nano said.

He characterised Indra as an attractive conceptual epithermal gold-silver target located at low altitude in the Paleocene age belt, which allowed for year-round work and would complement the company's seasonal exploration activities in the Mio-Pliocene belt of Chile and in the Santa Cruz region of Argentina.

Mirasol staked the Indra project as part of its Atacama-Puna generative programme, surrounding what Mirasol interprets may be the upper levels of a large epithermal gold-silver system. The 21,000ha Indra project is 5km south of the 1.37 million ounce El Guanaco gold mine, in northern Chile.