Otis said Centerra could earn up to 70% of Oakley by spending US$7 million on exploration and paying $550,000 over six years.

Oakley has an inferred 9.97 million tonne resource grading 0.51g/t gold for 163,000oz at the Blue Hill Creek deposit.

Otis will act as project manager and president and CEO Craig Lindsay said there would likely be a drilling programme in 2020.

"While our focus remains on the growth and development of our Kilgore project, we are excited to partner with Centerra to move this project forward and realise further value on Oakley," he said.

Excellon president and CEO Brendan Cahill said in the statement the company was looking forward to working with Centerra following the proposed acquisition of Otis.

Excellon (TSX: EXN), which has the Platosa mine in Mexico and exploration projects in Mexico and Germany, is acquiring Otis through a share exchange transaction announced last month.

The Oakley agreement will give Centerra a new exploration project in North America.

The miner has had a run of bad news, recently reporting a third fatality in three months at its Kumtor operation in the Kyrgyz Republic, is in a legal dispute with its joint venture partner over the Hardrock project in Ontario and is working on a comprehensive review of its Mount Milligan mine in British Columbia which is pointing to a material reduction in reserves and resources.

It expects to produce 80-90 million pounds of copper this year and 740,000 to 820,000 ounces of gold, reflecting the ramp up of its new Öksüt mine in Turkey.

Both Otis and Centerra lost more than 4% yesterday in a tough day on equities markets.

Otis' close at C11.5c puts its value about $20 million (US$15 million) and Centerra finished at $8.77 to capitalise it about $2.6 billion (US$1.9 billion).

Excellon dropped almost 14% to return to a one-year low of 50c, capitalising it about $56 million (US$41 million).