Geologists at Riqueza’s Pampa Corral prospect, which was identified in the interim geophysics report as an area of high priority interest. Credit: Inca Minerals Limited.

Australian diversified miner South32 has exercised its exclusive earn-in option to buy a majority stake in Inca Minerals’ Greater Riqueza zinc-silver-lead project in Peru.

Under the terms of the option agreement, South32 will acquire a 60% interest in the project by incurring an expenditure between $8 and $10m towards the first phase of exploration.

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The companies initially announced the deal in April, when they signed an exclusive option agreement under which South32 agreed to provide $275,000 to fund the geophysical survey over the entire Riqueza project area.

Once Phase I begins, all tenements at the project shall be transferred into a newly incorporated Peruvian company.

“With a porphyry-skarn focus added to our own Zn-Ag-Pb focus, I see a sustained upside for Inca shareholders.”

Inca Minerals managing director Ross Brown said: “South32 is a globally recognised sector leader and provides a clear advantage and capacity in the development of Riqueza.

“With a porphyry-skarn focus added to our own Zn-Ag-Pb focus, I see a sustained upside for Inca shareholders.”

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After the acquisition of a 60% interest, South32 also has an option to buy a further 10% stake in the project company in exchange for funding costs related to a project pre-feasibility study.

The earn-in-agreement is subject to South32’s satisfaction with the due diligence on the project company and its assets.

The greater Riqueza project area comprises projects, namely Riqueza, Riqueza West, Palcacandha and Antacocha.

It hosts zinc, silver, lead, gold, copper mineralised system covering around 25km².

In addition to Australia, South32 has operations in Southern Africa and South America producing zinc, silver, lead, nickel, manganese, metallurgical coal, aluminium, alumina and bauxite.