Erdene Resource Development has entered an option agreement to acquire up to an 80% interest in the Tereg Uul copper-gold porphyry prospect in Kazakhstan.
The prospect is strategically located 10km southwest of the significant Oyu Tolgoi deposit in the South Gobi province and spans 6,694 hectares.
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The exploration licence for Tereg Uul, currently held by Tereg Uul Mines (TUM), was issued on 5 April 2023 and is in the third year of a 12-year term.
It can be converted to a mining licence by fulfilling the requirements of the Minerals Law of Mongolia.
Erdene president and CEO Peter Akerley stated: “We are excited to explore for copper and gold along trend of Oyu Tolgoi, soon to become a top-four global copper producer. With the high-grade Bayan Khundii gold project on track for first gold production this quarter, and exploration continuing in the Khundii minerals district, we are in a position to take advantage of new opportunities to create additional value for shareholders.”
Erdene’s initial commitment includes investing $300,000 in exploration within 12 months and making a $200,000 payment to the option grantor.
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By GlobalDataUp to 2028, Erdene is required to make escalating payments totalling $1.8m to the option grantor and commit a further $3m in exploration expenditures.
Between the third and fourth anniversaries of the option agreement, Erdene has the option to acquire a 51% equity stake in TUM with a $5m payment.
Erdene will oversee all exploration activities during the option term and can terminate the agreement without penalty.
To reach an 80% equity ownership stake, Erdene is required to invest an additional $10m in exploration and make an $8m payment by the eighth anniversary.
“The Tereg Uul property is located within a corridor of copper-gold porphyry-related deposits and prospects that extend over 50 kilometres along trend of the Oyu Tolgoi deposits. This option agreement provides Erdene a low-risk opportunity to explore proximal to one of the largest copper-gold systems globally,” added Akerley.
Erdene began full construction at the Bayan Khundii gold project in southwestern Mongolia in January 2024, following a strategic alliance agreement with MMC, which now holds a 50% equity stake in Erdene’s subsidiary, Erdene Mongol.
