Located in the Tierra del Fuego archipelago, they lie east of Navarino Island and are separated from the Argentine part of Isla Grande in the north by the Beagle Channel.

[1] Close to the islands are the islets of Snipe, Augustus, Becasses, Luff, Jorge, Hermanos, Solitario, Gardiner, Terhalten, Sesambre and others.

From 3 to 6 December 1914, after the Battle of Coronel, the German East Asia Squadron (armored cruisers Scharnhorst and Gneisenau and the light cruisers Nürnberg, Leipzig, and Dresden and the merchants Santa Isabel, Baden, Seydlitz and the captured Norwegian ship Drummuir) under the command of Admiral Graf Spee moored off Puerto Banner on the way to the Battle of the Falkland Islands.

This was considered by Chile as a violation of its neutrality and forced the government to establish Puerto Banner as a coaling station for the Chilean Navy.

Puerto Banner served twice as the coaling station of the Yelcho during her services to rescue the Imperial Trans-Antarctic Expedition of Ernest Shackleton.

This agreement was to settle their dispute over the territorial and maritime boundaries between them, and in particular the title to the Picton, Nueva and Lennox islands near the extreme end of the South American continent.