Mirasol Resources Ltd. signed a binding letter of agreement with Newcrest Mining Ltd. unit Newcrest International Pty Ltd., allowing the latter to earn up an 80% stake in Mirasol's 18,480-hectare Zeus gold project in Chile.

To acquire the stake, Newcrest will make US$1 million in staged option payments to Mirasol and commit to spend at least US$1.5 million over an initial 18-month period.

Newcrest will also assume costs arising from an option-to-purchase agreement struck by Mirasol with the underlying owner of a 2,500- hectare portion of third-party claims at Zeus.

To earn the initial 51% stake in the project, Newcrest will pay US$400,000 and spend US$8 million on the project over a four-year period.

To proceed to the second stage of the farm-in, Newcrest will pay US$500,000 and have the right to earn 65% of the project over an additional two-year period by delivering a preliminary economic assessment, based on a NI 43-101-compliant resource of at least 1 million ounces of gold at a cutoff of 0.30 g/t of gold.

Newcrest will need to deliver a positive bankable feasibility study or spend US$100 million in the third stage to raise its project stake to 75% over an additional two-year period.

After completion of the third stage, Mirasol can contribute its 25% share of further development expenditures or allow Newcrest to finance Mirasol's share of development costs through to production in exchange for a further 5% interest in the project.

Newcrest's loan will have an interest rate of 12-month London Interbank Offered Rate plus 3% and will be repaid from 70% of Mirasol's share of dividends and secured against the shares of the Mirasol subsidiary that holds the interest in the project.

The deal includes a 2% net smelter returns dilution royalty, which will be triggered upon dilution of a party's interest to 10%, with a 0.5% buyback right for Newcrest at fair market value on the Mirasol-owned claims.

Mirasol inked a deal in January to acquire the project by making staged payments totaling US$2.8 million over the option period for these claims.