Gallipoli can earn a 50% interest in Candente's Alto Dorado copper-gold exploration project by spending $US3.5 over 3.5 years. Gallipoli can then increase its interest to 65% by completing a bankable feasibility study.
The deal represents another step back in to the resources industry for Gauci, who has kept a low profile since MIM was taken over by Swiss-based Xstrata in 2003. Gauci was a lone voice on the MIM board in opposing the bid by Xstrata.
Both Gallipoli and Candente believe that the gold-copper ratios and other mineralisation features found to date at Alto Dorado indicate similarities to Argentina's Bajo de la Alumbrera mine, developed by MIM and considered one of the world's lowest cost copper-gold operations.
Fieldwork under the new partnership will begin in earnest in January in the form of a $US400,000 drilling program.
The unlisted Gallipoli is 50% owned by Japan's Nippon Mining and Metals Co, which is one of the world's largest producers of refined copper.
Joining executive chairman Gauci on the Gallipoli board is former MIM executive general manager of mining Mike Menzies. Menzies led the team that turned around operational performance at Bajo de la Alumbrera and oversaw the 2001-02 mine expansion.
Alto Dorado reportedly covers a 9km long, 2-3km wide gold-copper porphyry style mineralising system delineated by anomalous levels of gold, copper, molybdenum and silver in soils and rocks, typical porphyry style alteration and Induced Polarization (IP) chargeability anomaly.
Two holes drilled 5 km apart intersected anomalous gold and copper levels over 176m and 160m vertically, grading 0.22gpt gold and 0.17% copper, and 0.13gpt gold and 0.08% copper respectively.