Canadian miner Galantas Gold on Friday announced its expansion into Chile through the acquisition of RDL Mining, securing an option to develop the Indiana gold/copper project while the company continues to advance its mine development activities in Europe.

Galantas said it signed a share purchase agreement to acquire all issued and outstanding shares of RDL in an all-share deal that will give RDL shareholders just under 50% of the enlarged company.

The transaction is paired with a brokered private placement of up to $7-million to fund exploration, option payments and working capital.

CEO Mario Stifano said the Indiana project offered a “compelling dual-path opportunity” for near-term production and significant exploration upside. “With an operating mine and historical high-grade gold/copper resources, this transaction positions Galantas to fast-track the project into production, while simultaneously unlocking significant exploration upside by drilling the numerous outcropping and untested veins on the property,” he said.

Located 40 km from Copiapó at 1 470 m elevation, the Indiana project comprises 923 ha of concessions in one of Chile’s most established copper/gold belts. Previous work includes 13 000 m of drilling, trench sampling and structural modelling. A historical inferred mineral resource outlines 607 000 oz gold equivalent, with metallurgical recoveries of about 90% for gold and 95% for copper. An updated resource estimate by DRA Global is due by the end of November.

RDL holds the option to acquire 100% of the project from Minería Activa by making payments totalling $15-million over five years and by meeting minimum exploration and development commitments, including 2 500 m of drilling or equivalent underground development a year. Until the option is exercised, RDL will lease the mine and pay Activa a 10% net smelter return (NSR) royalty.

As part of the deal, RDL shareholders Lawrence Roulston, Robert Sedgemore and Dorian “Dusty” Nicol will receive about 132-million Galantas shares and a combined 2% NSR royalty on the project.

Roulston will join the Galantas board as a nonexecutive director, while Sedgemore becomes senior VP operations. Nicol will act as a special exploration adviser.

The concurrent financing will see Galantas issue up to 87.5-million units at $0.08, with each unit comprising one share and one warrant exercisable at C$0.12 for 36 months. Closing is targeted for December 4, subject to TSX-V approval.

Galantas, which has been developing the high-grade Omagh gold mine in Northern Ireland, said shareholders holding about 57% of its current stock have expressed support for the RDL transaction. Completion is expected in the fourth quarter.