Comet Resources inks deal to acquire Santa Teresa Gold Project

By Trevor Hoey. Published at Aug 25, 2020, in Mining

Comet Resources Ltd (ASX:CRL) has executed a Share Purchase and Joint Venture Agreement (SPA) with the shareholders of El Alamo Resources Limited (EARL) for the acquisition of the Santa Teresa Gold Project.

The project is comprised of two mineral claims totalling 202 hectares located in the gold-rich El Alamo district, approximately 100 kilometres south-east of Ensenada, Baja California, Mexico.

The project is prospective for high-grade gold, with an existing non-JORC Inferred Mineral Resource of 64,000 ounces gold at an average grade of 8.7 g/t, reported at a cut-off grade of 4 g/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.

Documentation of the binding gold streaming and royalty financing with Raptor Capital International 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 targeting maiden resource

Discussing upcoming drilling and the company’s aim of establishing a maiden resource, Comet managing director Matthew O’Kane said, “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 substantial scope to extend mineralisation.”

Executives of Raptor Capital see this transaction as the forerunner to the project transitioning into a high-grade operating gold mine given the extensive experience that Comet’s board brings to the table.

The pending gold stream financing by Raptor that is subject to definitive documents being finalised is expected to fully fund the project through to production.

Reported gold production of up to 200,000 ounces in El Alamo district

Placer gold deposits of the El Alamo district were discovered in 1888, and 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 broader El Alamo district as shown below has been estimated between 100,000 to 200,000 ounces of gold.

Initial site work at Santa Teresa will involve assessing near term production opportunities within the Santa Teresa licence area itself and the other licences 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 prior to commencement of mine development activities.

Gold prices have continued to rise since the proposed Santa Teresa transaction initially announced, and some analysts are tipping further upside due to ongoing economic uncertainty related to the coronavirus, including the potential for central banks to ease monetary policy, a factor that has traditionally provided support for the gold price.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X