Gold Mountain (ASX:GMN) has entered into an agreement to acquire a 70% interest in the “Abundance Valley” gold and platinum prospective tenement in Papua New Guinea.
The company’s shares were last trading 7.6% higher intra-day at $0.085.
Abundance Valley adjoins Gold Mountain’s flagship Crown Ridge project, where the company is commencing an extensive programme in August 2017 to define a maiden JORC resource.
The purchase price for the tenement is $5.2nln comprising of $3mln in cash ($300,000 of which was paid as a non-refundable deposit) and 22 million Gold Mountain shares at $0.10 each.
Completion of the acquisition of Abundance Valley is due to occur after the second anniversary of the registration of the tenement by the Papua New Guinea Mineral Resources Authority.
On completion, Gold Mountain’s Crown Ridge Project would encompass 7.8 square kilometres of target area with significant free gold mineralisation.
The acquisition of Abundance Valley would also give the company access to the other half of prospective crater rim geological model as well as other areas with significant exploration potential.
The relative proximity, and geological affinity to the Porgera Gold Mine (with more than 20 million ounces gold produced) is a testament to the potential of Gold Mountain’s tenement holdings.
Gold Mountain is aiming to define a maiden JORC inferred resource by the first quarter of 2018.