Erdene Resource Development Corp. reports the closing of its previously announced agreement to acquire Mongolian property.
The original deal was set to acquire a 51% interest in the Ulaan exploration license, adjacent to the company’s high-grade Bayan Khundii gold project, with the option to acquire up to 100%. The Ulaan exploration license is a property located immediately to the west of the company’s Bayan Khundii gold license, and covers an area of approximately 1 780 ha. This property hosts a very large and intense alteration zone, stretching a 3 km diameter, with characteristics thought to be related to a porphyry copper and epithermal gold system.
The property has no history of drilling or trenching, a recent sediment sample has identified anomalous concentration of gold, copper and molybdenum in the surrounding area. Along with recently completed geophysical surveys, this has led Erdene to devise a number of follow up targets to explore. Such exploration programmes are being formulated with work to commence this quarter.
In addition to planned exploration at Ulaan, the company continues with drilling programs at its neighboring, 100%-owned Bayan Khundii, Altan Nar and Altan Arrow gold projects. Under the terms of the Agreement, Erdene has acquired 51% of the outstanding shares of Leader Exploration LLC, a private Mongolian company that currently owns the Property, from Erdenechuluun.Z and Erdenekhuyag.Z for US$750 000. Provided Erdene spends a minimum of US$600 000 on work expenditures on the Property over the next three years, it has the right to acquire the remaining 49% of the shares of Leader from Erdenechuluun.Z or, at Erdene’s option, a portion of the Property, for the then fair market value of the Property or the portion to be acquired. Erdene may extend the option beyond three years by spending a minimum of US$100 000 per annum on work expenditures.