Colossus Resources has agreed to acquire an undivided 100% stake in the Calvario and Mirador copper projects in Chile.

The related definitive option agreement has been signed with Austral Gold and its subsidiaries Minera Mena Chile and Revelo Resources.

Under the deal, Colossus will acquire the copper project in exchange for a $2.5m work commitment over a period of two years and the issuance of Colossus shares equivalent to a 19.99% shareholding in Colossus on a non-diluted basis.

Furthermore, Colossus will issue one million Colossus warrants, each at an exercise price of C$0.50 ($0.03).

Subject to the completion of a pre-feasibility study on the copper projects, Colossus will issue a further two million common shares to Austral.

Furthermore, Colossus will grant an anti-dilution right to Austral through a $3.8m fundraiser.

Upon signing the letter of intent earlier this year, Colossus made a $100,000 payment to Austral Gold as an exclusivity fee.

Colossus technical director Ioannis (Yannis) Tsitos said: "With this acquisition, Colossus Resources secures a significant and strategic mineral rights position in one of the most prospective belts, still underexplored, of central-northern Chile associated with significant copper and precious metals mineralisation.

“Although Calvario is a drill-stage ready exploration project based on historical data, both projects have not seen any exploration activities in the last decade. Nevertheless, they exhibit important technical facts on the presence of large hydrothermal alteration systems in addition to on-surface and near-surface copper mineralisation, possibly associated with untested hypogene parts of fertile porphyry systems."

Following the completion of the deal, Austral will become Colossus’ largest shareholder.

The early-stage copper exploration projects Calvario and Mirador are located in central-northern Chile, 700km from the Guanaco-Amancaya mine complex owned by Austral.