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.
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.
Up 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.
