HIF was set up in 2011 by the German government as part of its national strategy for raw materials.

"We now have the opportunity to deploy the most advanced technologies as exploration commences. This agreement also reflects the wealth of learning and technical expertise in Freiberg, mere kilometres from the project," said Excellon CEO Brendan Cahill.

Excellon is preparing to start the first ever drill programme for precious metals on the large Silver City epithermal field, which has a history of mining dating back to the 12th century. Past mining targeted a 36km southwest-northeast strike zone, up to 5km wide. The region is host to numerous historical mining camps, small mines and prospects, many of which were only explored or developed to a maximum depth of 200m.

Excellon, which has focused on its high-grade Platosa mine in Mexico, recently added the Kilgore project in Idaho, USA, via the US$32.3 million acquisition of Otis Gold.

It signed an option agreement with Globex Mining Enterprises in September last year to acquire 100% of the 164sq.km Silver City project in staged payments over three years totaling C$500,000 and $1.6 million in cash and shares, respectively.

Shares in the company (TSX:EXN) closed at 78c Tuesday, capitalising the company at C$120 million.