The agreement between the two parties, which was signed back in October, granted Freeport the right to earn an indirect 70 per cent interest in the property by making staged payments, and funding exploration expenses of $25 million over a maximum 10 year period.
The deal was subject to due diligence review, which has now been satisfied, Southern Silver said.
Freeport has paid the initial US$918,000, which has been used to pay an option payment to the optioner of the property. To maintain the agreement, Freeport has to pay another $600,000 by early January.
Exploration planning is underway, and Southern Silver expects that the program, which will consist of a geophysical campaign followed by diamond drilling, will begin in early January next year.
The Cerro Las Minitas project is located about 70 kilometres to the northeast of the city of Durango in Durango State, Mexico, and is accessed easily by road. Southern Silver has explored the property since late 2010 and so far, has completed airborne and ground geophysics over the project and 62 drill holes.
The property comprises 18 concessions totaling 15,125 hectares in one of the most significant silver producing regions in the world with current reserves/resources and historic production in excess of 3 billion ounces of silver, Southern Silver said.
The company has identified two high-grade silver-polymetallic deposits, the Blind zone and El Sol zone, which have been partially delineated, as well as several other "high priority targets" throughout the property.
The precious and base metal exploration company, which is a member of the Manex Resource Group, holds the silver-lead-zinc Cerro Las Minitas project and the copper-gold-silver Minas de Ameca in Mexico, the porphyry copper-molybdenum Dragoon project in Arizona and the gold-silver-copper Oro project in New Mexico.