VANCOUVER - Canasil Resources Inc. (TSXV:CLZ), a junior miner based in Vancouver, says it has signed a deal with Pan American Silver Corp. (TSX:PAA) to earn up to 51 per cent of Pan American's Escobar claims in Mexico for US$1 million in exploration spending over three years.

Under the deal, announced Monday, Pan American would have the option either to back-in to a 51 per cent interest in the combined claims of Pan American's Escobar project and Canasil's Sandra project to form a joint venture.

As well, Pan American could sell its 49 per cent interest in the Escobar claims to Canasil.

"We are very pleased with the opportunity for co-operation with Pan American Silver on the Escobar and Sandra projects," said Bahman Yamini, prsident and CEO of Canasil.

"The combined claims cover over 6,000 hectares with the potential for hosting a significant silver-gold deposit in a region known for its silver and gold producing mines and deposits. We regard this as a very important development for Canasil with the opportunity to cooperate with a leading company with significant silver production and reserves, and an extensive history of working on silver projects in Mexico and Latin America."

Following Canasil's initial earn-in of a 51 per cent interest in Pan American's Escobar claims, Pan American may back-in to the combined Canasil and Pan American claims by paying Canasil three times the exploration spending on the combined claims.

That would form a joint venture 51 per cent owned by Pan American and 49 per cent by Canasil.

Pan American Silver's Escobar claims cover 635 hectares and Canasil's Sandra claims cover 5,513 hectares about 180 kilometres northwest of the city of Durango, Mexico.

Pan American Silver has seven operating mines in Mexico, Peru and Bolivia and is forecasting production of 18.8 million ounces of silver this year. An eighth mine in Argentina is scheduled to begin operating this year.

Canasil has interests in precious and base metal properties in Durango, Sinaloa and Zacatecas states in Mexico, and in British Columbia.

In trading on the TSX on Monday, Pan American shares rose $1.57 to $27.48, a gain of six per cent.

Canasil stock fell 2.5 cents to 21 cents, a drop of more than 10.6 per cent.

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