Prospero Silver Corp (CVE:PSL) announced progress in Mexico Monday as it revealed Fortuna Silver Mines had exercised its right to be granted an option to acquire up to a 70% interest in the Pachuca SE project.
It follows the strategic co-operation agreement between the two companies in May last year.
The near 7,000-hectare land package is 24km south-east of the city of Pachuca, Hidalgo along strike from the historic Pachuca-Real del Monte epithermal vein camp.
It means Fortuna must spend a total of US$8 million in qualifying expenditures and complete a preliminary economic assessment (PEA), with a minimum spend of $1 million in the first year.
"We're happy that Fortuna has exercised its right to be granted an interest in Pachuca SE," said Tawn Albinson, the president of Prospero.
"The Prospero team is excited to be returning for a second round of drilling on the project.
"We hope to recommence work in January 2019, subject to completion of a definitive option and joint venture agreement with Fortuna.
"There are several distinct targets that we hope to test and planning will begin shortly with Fortuna's technical team."
Prospero said the pair were now preparing a definitive option and joint venture agreement.
In the first quarter of this year, Prospero, with funding provided by Fortuna, completed a 1,800m (meter), three-hole drill program, testing three distinct targets.
In March, significantly, the firm said it had uncovered a new gold-and-silver-bearing vein system at the Pachuca Southeast project in Mexico.
The firm said it had "cut new vein systems within 25km of one of the world's great silver-gold districts, the Pachuca-Real Del Monte system, which produced over 1.2-billion ounces of silver".
Vancouver-based Prospero's aim is to discover world-class precious metal projects in the major mineral belts of Mexico.
Prospero shares were unchanged at $0.060 in Toronto.
Contact Giles Gwinnett at [email protected]
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