Cott Oil and Gas (ASX:CMT) has entered into an option to acquire up to a 25% interest in Eloro Resources’ (CVE:ELO) La Victoria Gold Silver Project in Peru.
The property is located in the prolific North-Central Mineral Belt of Peru covering about 80.4 square kilometres. It is highly prospective for gold and copper mineralisation.
Cott will have the right to earn its interest in La Victoria by contributing up to C$5 million in expenditures by 31 July 2018.
The company can earn an initial 10% interest in the property by expending C$2 million by 30 October 2017, and a further 15% interest by expending an additional C$3 million by 31 July 2018.
At the end of either the stage 1 earn-in period or the stage 2 earn-in period, a joint venture can be formed between Cott and Eloro, with Eloro being the operator.
Following the sale of its oil and gas interests in Papua New Guinea, Cott is seeking to build a portfolio of quality mineral resource projects, focussing initially on base metals and gold.
The proposed transaction with Eloro is the first step in this new direction.
Michael O’Keeffe, the company’s largest shareholder holding a 16.79 % interest, is expected to join the board of Cott following the completion of the transaction.
Michael was the managing director of Glencore Australia from 1995 to 2004 and is currently executive chairman of Champion Iron (ASX:CIA).
The company is also expected to change its name to EHR Resources, subject to completion of the agreement with Eloro.
Cott’s share price has increased more than 55% since the start of 2017, last trading at $0.07.