KGL Resources, formerly Kentor Gold, will farm-out its Bashkol Gold-Copper Project in the Kyrgyz Republic to Robust Resources, allowing it to focus on the exploration and development of the Jervois copper project in Australia’s Northern Territory.
Under the agreement, Robust has been granted a sole and exclusive right to earn up to 70% equity interest in CJSC Kentor, which owns a 100% interest in Bashkol.
“Farming out the Bashkol project allows us to be fully focused on the exploration and development of the Jervois copper project,” says KGL’s managing director Simon Milroy.
Robust can earn a 51% interest in CJSC Kentor by contributing an initial expenditure of $2 million by December 31, 2017 and a further 19% by investing an additional $5 million in the period ending December 31, 2021. It must contribute a minimum annual expenditure to keep the Bashkol tenement in good standing. This is currently estimated at US$375,000 per annum.
KGL currently owns 80% of CJSC Kentor while the remaining 20% is held by the Kyrgyz Geophysical Expedition (KGE). This will be reduced to 10% following completion of the Robust farm-in.
A 2000 metre diamond drilling program at Bashkol is due to begin this month.
The Bashkol licence area is located in the northeast of the Kyrgyz Republic in the Tien Shan Gold Belt adjacent to a suture line which separates two tectonic units – the Northern Tien Shan and the Middle Tien Shan. This is a similar structural position to the nation's largest operating gold mine Kumtor, which sits adjacent to the same suture line about 75km along strike to the southwest.
Centerra Gold’s Kumtor mine began operation in 1997 and had produced a total of 8.6 million ounces of gold between 1997 and the end of 2012.
The Bashkol licence area is at an altitude of 3400 metres to 3800 metres and has no permanent inhabitants. The Bekbulaktor prospect within the Bashkol tenement has two gold mineralized zones, Bekbulaktor South and Bekbulaktor North, defined over a strike length of 2km.
Channel sampling at Bekbulaktor South delivered high grade results including 12 metres @14.07 grams/tonne gold and 8 metres @ 5.65 grams/tonne, along with broader results such as 37 metres @ 2.65 grams/tonne.