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Precious and base metals explorer Comet Resources has signed binding documents with Raptor Capital for a streaming agreement, which could bring in up to $20m in financing.

The financing is for the development of the Santa Teresa gold project in Baja California, Mexico

The project is known to host high-grade gold, with an existing Non-JORC inferred mineral resource of 64,000 ounces (oz) of gold grading 8.7 gram/tonne (g/t).

It is located within the central zone of the Peninsular Ranges Batholith of Baja California.

The latest agreement is subject to a number of conditions, including Comet’s decision to mine at the Mexican project.

Comet Resources managing director Matthew O’Kane said: “Finalisation of the Streaming Agreement with Raptor provides Comet with non-dilutive capital for the development of a mining operation at Santa Teresa Gold Project.

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“We are presently working toward upgrading the existing foreign resource estimate at the Project to a JORC compliant resource. Information gained from completing the JORC resource will also assist us in planning the initial exploration activities at the Project, including our first drilling programme.”

According to Comet, the debt will be serviced by streaming and royalty arrangements, where Comet will deliver every second ounce of gold produced from the project to Raptor once the mine exceeds initial production.

Raptor will also receive a 2.5% net smelter royalty (NSR) on all minerals of the project.

In June, Comet executed a “Share Purchase and Joint Venture Agreement” with the El Alamo Resources company’s shareholders for the 100% acquisition of the Santa Teresa gold project.

Currently, Comet is 50% owner of the Santa Teresa project. It has the option to increase ownership to 100% within the next two years.