Erdene Resource Development Corp has closed its agreement to acquire a 51% interest in the Ulaan exploration licence, which is adjacent to its high-grade Bayan Khundii Gold Project in southern Mongolia. Erdene has an option to acquire up to 100%.
The Ulaan licence is immediately west of Bayan Khundii and covers an area of approximately 1780 hectares. It hosts a very large, 3km diameter, intense alteration zone with characteristics thought to be related to a porphyry copper and epithermal gold system.
Although the property has no history of drilling or trenching, rock chip and stream sediment geochemical sampling has identified anomalous concentrations of gold, copper and molybdenum in the surrounding area, and recently completed geophysical surveys have produced a number of follow-up targets.
Exploration programs are being formulated with work to commence this quarter.
In addition to planned exploration at Ulaan, the company continues with drilling programs at its neighbouring, 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 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.
Erdene is a Canada-based resource company focused on the acquisition, exploration, and development of base and precious metals in underexplored and highly prospective Mongolia. The company has four exploration licences and a mining licence in southwest Mongolia.