LONDON -(Dow Jones)- Horizonte Minerals PLC (HZM.LN), a Brazil-focused miner, said Wednesday it has signed a tentative joint venture agreement for Magellan Minerals Ltd. (MNM.V) to earn up to a 70% interest in Horizonte's Agua Azul do Norte gold property, in return for a cash payment and the funding of exploration costs and a share of potential development costs.

Under the agreement, Magellan will have the option to earn an initial 51% interest in Agua Azul for $320,000 in cash staggered over a 36 month period, together with a minimum exploration expenditure of $1.5 million over the same period, including a minimum of 2,000 meters of drilling.

Magellan will then have the option to increase its ownership in Agua Azul to 70% upon completion of a pre-feasibility study together with a further cash payment of $500,000 to Horizonte.

If Magellan has 70% of Agua Azul, both companies will contribute to ongoing development costs relative to their interest in the project.

"This latest JV with Magellan is part of our strategy of monetizing our gold assets and maximizing additional value uplift from our gold portfolio for shareholders at no cost to Horizonte," its Chief Executive Jeremy Martin said. "We have a strong cash position of GBP4.8 million and have the continued support of two major mining companies Teck Resources, a major shareholder in the company, and AngloGold Ashanti as a JV partner on the Falcao gold project.

"Our current focus is the delivery of the Preliminary Economic Assessment on our flagship Araguaia Nickel Project by the end of the second quarter 2012, and all work streams are on target to achieve this milestone," Martin said. "Later in the year we plan to start the pilot plant trials as we move into the Pre-Feasibility stage."

Horizonte shares closed Tuesday at 8.8 pence.

-By Iain Packham, Dow Jones Newswires; 44-20-7842-9269; iain.packham@dowjones.com