Highlights:
- Final agreement now executed with shareholders of El Alamo Resources
- First stage of acquisition completed – Comet is now 50% owner of the Santa Teresa Gold Project1
- Comet has the option to increase ownership to 100% within 2 years
- 32 diamond holes have been drilled2 delivering numerous
high-grade gold intersections including:
- 2m @ 32.4g/t gold from 19m
- 1m @ 958.4g/t gold from 239m
- 2.5m @ 38g/t gold from 174m
- 3.9m @ 39g/t gold from 121m
- 3m @ 19.9g/t gold from 214m
- 1m @ 125.9 g/t gold from 83m
- 3.1 @ 14.4g/t gold from 59m
- 3.1m @ 16g/t gold from 101m
- Work to commence on re-assaying of historic drill core and preparation of a JORC compliant Mineral Resource estimate
- Historical production in the surrounding El Alamo district estimated between 100,000 to 200,000oz gold
- Exploration upside and opportunity to extend current mineralisation due to the under-explored nature of the tenements
- Stream Financing agreement with Raptor Capital International Limited in advanced stage of documentation and expected to complete in the near-term
Comet Resources Ltd (Comet or the Company) (ASX:CRL) is pleased to announce that it has executed a Share Purchase and Joint Venture Agreement (SPA) with the shareholders of El Alamo Resources Limited (EARL) for the 100% acquisition (Acquisition) of the Santa Teresa Gold Project (Project). Documentation of the binding gold streaming and royalty financing (Financing) with Raptor Capital International Limited (Raptor) to fund activities at the Project for up to US$20 million (initial minimum of US$6 million) is advanced and is expected to complete in the near-term.
Comet Managing Director, Matthew O’Kane, commented, “From the initial announcement of this transaction to closing, the gold price has increased over US$200 per ounce. This has increased the potential value of Santa Teresa for Comet and we are now looking forward to commencing work on the historical drill core and a maiden JORC resource. In parallel, we will plan our initial field activities. The relatively under explored nature of the Project and the richness of the district provides a lot of scope to extend mineralisation.”
1 Subject to shareholder approval for the issue of the consideration shares. Comet has negotiated an accelerated acquisition of its initial 50% interest in the Santa Teresa Gold Project by agreeing that the certain conditions precedent to the acquisition be treated as conditions subsequent. Refer to Annexure A for further details.
2 Refer to the Company’s release of 9 June 2020 for results of all 32 drill holes.
Paul Ray, Director of El Alamo Resources Ltd and CEO of Raptor Capital International Ltd stated “The closing of the SPA represents an important first step in developing the Santa Teresa Gold Project into a high-grade operating gold mine. The acquisition by Comet adds a well credentialed Board and Management team that have over 50 years of combined exploration, development and mining expertise. The pending gold stream financing by Raptor, which is subject to definitive documents being finalised, is expected to fully fund the Project into production. We are looking forward to working together with the Comet team on this exciting Project.”
The Santa Teresa Gold Project is comprised of two mineral claims totalling 202 hectares located in the gold rich El Alamo district, approximately 100 km southeast of Ensenada, Baja California, Mexico; and 250 km southeast of San Diego, California, USA. The Project is prospective for high grade gold, with an existing Non-JORC Inferred Mineral Resource of 64,000oz Au at an average grade of 8.7g/t, reported at a cut-off grade of 4g/t. In addition to the two claims of the Project, two additional claims totalling a further 378 hectares in the surrounding El Alamo district are being acquired from EARL.
Figure 1: Santa Teresa Gold Project location and selected drill results
The Acquisition will be completed on a staged basis, with Comet acquiring an initial 50% interest by making a refundable $100,000 cash payment to the shareholders of EARL. The balance of the consideration for the initial 50% interest to be paid upon satisfaction of the conditions subsequent. The remaining 50% interest will be acquired upon a decision to mine being made in respect of the Project within a two year period. A summary of the material terms and conditions of the Acquisition are set out in Appendix 1.
Placer gold deposits of the El Alamo district were discovered in 1888. High grade ore-shoots were subsequently discovered on the Aurora-Princess vein within a year. Lode mining continued until 1907, after which leases were worked until 1912 when mining ceased as a result of the Mexican Revolution. The reported gold production of the El Alamo district has been estimated between 100,000 to 200,000 ounces of gold. For further details on the Santa Teresa Project please refer to the Company’s announcement of June 9, 2020.
The acquisition is further enhanced by funding from Raptor of $US6M (up to US$20M) via a gold stream and royalty facility which is currently in the process of final documentation and is expected to be completed in the near term. The use of proceeds is to fund development activities at Santa Teresa and the facility will be secured only against the Santa Teresa Gold Project itself and any further tenements acquired in the region.
Initial site work at Santa Teresa will involve assessing near term production opportunities within the Santa Teresa license area itself and the other licenses proposed to be acquired in the El Alamo district, and if this work warrants, commencement of mining activities. All such activities may be financed by the Raptor stream financing. In addition, due to the recent increase in the gold price, work will also investigate options to increase the size and confidence of the resource at the Project prior to commencement of mine development activities.
Gold prices have continued to rise over the period between initial announcement of the Santa Teresa transaction and the transaction close and may still have further upside to price due to ongoing economic uncertainty caused by the COVID-19 pandemic and in response to the related ongoing aggressive monetary policy easing by many major economy’s central banks.
The Company notes that the acquisition of the Santa Teresa Gold Project, while complete and binding, has a range of conditions subsequent to be satisfied by the vendors before the full stage 1 consideration is paid (refer to Annexure A for further details). Many of these conditions subsequent relate to due diligence work that requires information from several Mexican government bodies, such information which is unavailable at present due to temporary closures of certain government departments as part of measures taken to combat Covid-19.
This announcement has been authorised by the Board of Comet Resources Limited.
For further information please contact:
MATTHEW O’KANE
Managing Director
(08) 6489 1600
[email protected]
cometres.com.au
Suite 9, 330 Churchill Avenue Subiaco WA 6008
PO Box 866 Subiaco WA 6904
Original Article: https://wcsecure.weblink.com.au/pdf/CRL/02271099.pdf
