Copper. Credit: Jonathan Zander

Freeport-McMoRan’s subsidiary Minera Freeport-McMoRan South America has signed an option agreement with Solaris Copper’s subsidiary Minera Ricardo Resources to acquire up to 80% in the early-stage Ricardo copper-molybdenum property in Chile.

Under the terms of the agreement, Freeport can make gross expenditures of $130m, or alternatively complete an investment of $30m and deliver a feasibility study for a mine at Ricardo under a three-stage process to acquire the interest.

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Spread over an area of 14,000ha, the Ricardo property is located along the West Fissure fault in Chile around 25km south of Chilean state-owned miner Codelco’s Chuquicamata copper mine.

The West Fissure is said to comprise several other large porphyry copper deposits.

Solaris Copper CEO Greg Smith said: “Exploration at the prospective Ricardo property will be significantly enhanced by the technical and financial capacity of Freeport.

“We are very pleased to partner with Freeport in advancing the Ricardo property as we focus on our flagship Warintza project in Ecuador.”

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“Exploration will be significantly enhanced by the technical and financial capacity of Freeport.”

Subject to the receipt of relevant exploration permits, Freeport is required to invest $4.2m towards exploration costs over the two years to complete the first stage of the earn-in. Following this, the company has the option to spend $4.8m, $8m, and $13m in the third, fourth and fifth years, respectively.

Once these obligations are completed, the firm will acquire a 60% stake in the property. At this stage, the company can increase its interest to 80% by sole funding a feasibility study for a mine at Ricardo or incurring a further $100m in exploration expenses.

Other projects owned by Solaris include the 100%-owned Warintza copper-molybdenum property in Ecuador and the 60%-owned La Verde copper-silver-gold property in Mexico.