Bocana Resources has entered a non-binding LOI to acquire Bolivian mining company Empresa Minera Inti Raymi (Inti Raymi).

Valued at up to $75m (C$101.72m), the proposed deal would see Canadian mineral exploration company Bocana buying out all outstanding shares of Inti Raymi.

This deal consideration includes an initial cash payment of $3m at closing.

The remaining amount will be funded by Inti Raymi shareholders and is expected to be covered by the monthly cash flow from Inti Raymi's operations, with specific terms to be finalised in the forthcoming agreement.

In a statement, Bocana said: “The Transaction is not subject to a finder’s fee, however finder's fees may be paid in connection with any capital that is raised in connection with the Transaction. The agreement was negotiated at arm’s length. The transaction does not represent a change of business. There will be no change of directors or officers of the company required by the transaction.”

Both Bocana and Inti Raymi have committed to finalising the definitive agreement within 120 days of the LOI.

This agreement will lay out the detailed terms of the acquisition. The companies have stated their intention to keep stakeholders informed and will issue updates on the transaction's progress over the next four months.

Bocana CEO Tim Turner said: “The potential acquisition of Inti Raymi’s tier-one properties will mark a significant milestone for our company and is expected to bring tremendous value for Bocana and our shareholders going forward.

“We are excited about the opportunity of moving into a production and processing phase of the business and the potential of bringing significant cash flow to our operations from just reprocessing the tailings and low-grade dumps that still have historically remaining reserves/resources.”