Comet Resources (ASX: CRL) has entered into a conditional option agreement to acquire Kyrgyz Gold Pty Ltd, which has the option to acquire 90% of three drill-ready gold exploration licences in Kyrgyz Republic.
The licences occur within the Tien Shan Gold Belt in Central Asia that hosts a number of world class Orogenic-Type gold deposits including Muruntau (190 million ounces) and Kumtor (26 million ounces).
Muruntau is the world's largest open pit gold mine measuring about 3.5 kilometres by 2.5 kilometres and extends to a depth of 350 metres. Annual production is about 2 million ounces of gold.
Surface trenching undertaken over the Ashutor licence in the northeast of the Kyrgyz Republic has identified high grade gold mineralisation with notable surface trenching results of 50 metres at 20 grams per tonne gold and 30 metres at 15.8g/t gold.
This makes the licence prospective for the discovery of a near-surface high-grade gold deposit.
The other two licences, Jetymbel and Chakyrkorum, occur along strike (15 kilometres) from the Kumtor Deposit owned by Canadian mining company Centerra Gold (TSE: CG) with Jetymbel abutting the Kumtor Mining lease.
Previous exploration including mapping combined with surface and trench sampling, has verified the presence of Kumtor-style mineralisation with several geochemical defined drill ready targets.
These results, geology and structure show that this area has the potential to host significant, large tonnage gold deposits.
All three licences have identified drill ready targets, offering Comet the opportunity to rapidly upgrade the projects.
Comet has the opportunity to undertake 6 months of due-diligence over the licences before a decision needs to be made to exercise its option.
During this period, it is not required to incur any material expenditure, other than in respect of a monthly option maintenance fee and due diligence costs
Kyrgyz Gold holds the option to acquire the three licences from Warrior Resources for $1.25 million of which $250,000 must be paid in cash and the remaining $1 million in cash or shares of an ASX-listed company (possibly Comet).
Comet in turn will be required to pay Kyrgyz Gold shareholders either $485,000 in cash, of which $460,000 must be reinvested in Comet through a share placement of 4.6 million shares priced at $0.10 each, or $255,000 in cash with no reinvestment requirement.
It will also have to issue 5 million shares to Kyrgyz Gold shareholders as well as 5 million options.
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