Halcones Precious Metals has signed an option agreement to acquire 100% interest in the Polaris gold project from Austral Exploraciones, a Chilean exploration company.

Under the terms of the agreement, Halcones will issue 50 million shares to the vendors at a deemed price of $0.05 per share.

Additionally, a cash payment of $100,000 is to be made to Austral upon approval and closing of the transaction by the TSX Venture Exchange.

A milestone payment of $2m is due to Austral upon the 48-month anniversary of the transaction's closing.

Additionally, the deal includes a 2% net smelter return royalty over the project to Austral.

The transaction is subject to standard closing conditions, including the approval of the TSX Venture Exchange.

Located in the Antofagasta Region of Chile, the Polaris gold project is claimed to be a highly prospective endeavour, with 17 former high-grade artisanal mining operations identified.

Historical artisanal mining activities span the last century.

The project has demonstrated better gold mineralisation across a 2.7km strike length, with additional potential extensions yet to be sampled.

Halcones undertook various sampling campaigns, including due diligence work, which the company claims to have yielded high-grade results.

Halcones director and CEO Ian Parkinson said: “Our technical team has evaluated dozens of early-stage projects in South America. The Polaris gold project presents an exceptional exploration opportunity.

“The high-grade surface samples over an extensive area and widespread artisanal mines demonstrate the property hosts high-grade surface occurrences that have never been explored in a modern sense.

“The historical artisanal operations focused on very high-grade narrow veins, and only persisted to shallow depths due to ventilation limitations. The extensive mineralised stockwork surrounding the veins was never assessed and could not have been exploited in the historical context of when mining was active.”

Halcones explores and develops gold-silver projects in the Maricunga Belt, Chile.

Earlier this year, Halcones withdrew from its option to acquire the Carachapampa project in Chile pursuant to the terms of the option agreement.