An Antofagasta PLC unit agreed to acquire a 70% interest in San Marco Resources Inc.'s Chunibas gold-silver project in Mexico, according to an Aug. 9 release.

The property comprises several mining concessions with an overall surface area of 530 hectares.

As part of the terms, Antofagasta is required to spend US$8 million in exploration expenditures and make cash payments totaling US$200,000 over a four-year period.

Upon exercise of the earn-in option, San Marco and Antofagasta will form a 30/70 joint venture over the project.

If either party's interest dilutes to 10% or less, it will convert into a net smelter return royalty, ranging from 1% to 2% depending on the circumstances of the dilution.

The initial drill program is anticipated to start as soon as the rainy season ends, and local road conditions improve. San Marco will be the project operator, under the direction of a technical committee consisting of an equal number of members from each company.