The deal allows South32 to acquire 65% of the project by spending US$8.5 million over five years and assuming responsibility for paying 100% of the cash option payments due to the underlying owners of the project during the period.
South32 can extend the agreement for one year by spending an additional $1.5 million and can acquire an additional 10% by completing a preliminary economic assessment.
Sable will manage exploration and will receive a 7.5% operator fee on all qualifying exploration expenditures.
A technical committee comprising representatives from each of Sable and South32 will review and approve annual exploration programs and budgets.
The Don Juan project covers 58,000 hectares and contains several copper-gold porphyry, silver-gold epithermal, and polymetallic skarn targets, which were generated from detailed mapping and geochemistry work over the past two and a half years.
Six of the targets are considered drill-ready.
The project is just 59km from Barrick Gold's 8.9 million ounce Alturas deposit and 130km from the Veladero mine.
Don Julio is also close to South32's earn-in with Minsud Resources at Chita Valley.
"The 2021 work plan includes a 675km mag survey commencing in January, which will be followed by ground IP over elected areas of interest," Sable president and CEO Ruben Padilla said.
"The new geophysical data will be integrated with the available geological and geochemical information to define and rank drill targets and plan the initiation of the first round of drilling."
South32 has been focused on early stage opportunities in base metals.
It has exploration agreements for projects in Australia, the US, Mexico, Ireland and Peru.
Toronto-listed Sable is focused on Argentina and Mexico.
