UPDATE 1-Xstrata, Goldcorp venture gets option to buy Yamana's Agua Rica 

* JV co has option to buy Agua Rica for up to $110 mln

* Goldcorp to finance 42.86 pct, Xstrata 57.14 pct of deal (Follows alerts)

March 8 - A joint venture between Yamana Gold , Goldcorp Inc and Xstrata Queensland Ltd has taken an option to buy Yamana's stake in the Agua Rica project in Argentina for up to $110 million.

The joint venture, called Minera Alumbrera Limited Sucursal, has a four-year option to buy Yamana's interest in the copper, gold, silver and molybdenum deposit in Catamarca in northwestern Argentina.

Xstrata will finance about 57 percent of the option payment and Goldcorp the rest.

Yamana would receive $150 million up front, and $50 million more once the project gets commissioned. It also would get the right to a deferred payment related to 65 percent of the payable gold production from Agua Rica up to 2.3 million ounces.

Yamana owns 12.5 percent of Minera Alumbrera, which means it would effectively sell 87.5 percent of its interest in Agua Rica. Xstrata owns half of Minera Alumbrera. Goldcorp owns 37.5 percent.

Bank of America Merrill Lynch advised Yamana on the deal.

Shares of Goldcorp fell 1.65 percent to C$47.90 on the Toronto Stock Exchange on Tuesday. Yamana shares rose 2 percent to C$12.46. (Reporting by Thyagaraju Adinarayan in Bangalore; Editing by Don Sebastian)