Capstone Mining (CS:TSX) announced today that it would acquire the right to earn up to 70% of the Project Providencia from Sociedad Quimica y Mineral de Chila S.A. (SQM).  The property is somewhat strategic in that it sits approximately halfway between Capstone’s Santo Domingo Project and Anglo American’s Mantos Blancos copper mine.

Project Providencia located 50km East of Taltal

Project Providencia located 50km East of Taltal

SQM is a domestic producer of specialty fertilizers and other chemicals and as a result, the project has had no modern exploration work for hard rock metal deposits.  Capstone will narrow the original 350,000 hectares down to 50,000 hectares by performing airborne geophysics.  The exploration efforts will be led by the highly successful team that discovered the Santo Domingo iron oxide-copper-gold deposit (IOCG).  Capstone believes this property could host a large IOCG, copper porphyry or Mantos Blancos type deposit.  Capstone paid $1 million on signing and can earn up to 70% in the project by making exploration expenditures over the next 7.5 years, but should Capstone not like what they see, they can withdraw from the agreement at any time.

News Release here: Capstone Acquires Option on 350,000 Hectares of Exploration Land in Chile