Erdene Resource Development Corp has entered into an agreement to acquire a 51% interest in the Ulaan exploration licence, which is adjacent to its high-grade Bayan Khundii Gold Project in Mongolia. The agreement also includes an option to acquire up to 100% of the licence.
The Ulaan licence covers approximately 1780 hectares and is immediately west of Erdene’s Khundii licence, which hosts the Bayan Khundii and Altan Arrow projects.
The most prominent feature of Ulaan is a very large and intense alteration zone measuring approximately 3km in diameter. This zone has had only minimal mapping and sampling, and a recently completed geophysical survey.
The licence area is underlain by a variety of intrusive and extrusive igneous rocks of variable composition, including andesite, andesite porphyry, dacite, diorite and syenite. There are common intrusive dykes and plugs cross-cutting the volcanic units, and quartz veins have been observed locally within the licence.
Anomalous concentrations of copper and molybdenum were encountered in rock chip and stream sediment samples collected in the vicinity of the licence.
A magnetic geophysical survey has outlined a broad magnetic low in the central area of the property, which corresponds to the main body of alteration, presumably due to magnetite destruction to appreciable depths.
An induced polarisation survey outlined a broad chargeability anomaly across the central area of the property, extending to approximately 200 to 300 metres depth.
Erdene will acquire 51% of the outstanding shares of Leader Exploration LLC, a private Mongolian company that owns the property, from Erdenechuluun Z and Erdenekhuyag Z for US$750,000. The closing is anticipated to occur early in September 2017.
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.
Exploration programs are being formulated with work to commence in the fourth quarter of 2017.
Erdene’s president and CEO Peter Akerley said, “Our company is pleased to be able to provide our shareholders with additional exposure to prospective areas in the vicinity of our Bayan Khundii project.
“Over the long-term we believe this area will become a significant gold mining district, and will continue to provide new precious and base metal opportunities. As such, we will continue seeking opportunities to further expand our land position in this very prospective area.
“The Ulaan licence not only provides immediate discovery potential for both high-grade gold and porphyry copper, but it also provides important strategic advantages as the district emerges into a producing gold camp.”