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- Comet Resources’ (CRL) due diligence work for the proposed acquisition of the high-grade Santa Teresa Gold Project is on track for completion in the third quarter of 2020
- The due diligence process is part of a deal with El Alamo Resources to acquire 50 per cent of the project, located in Baja California, Mexico
- The company will also receive an initial $US6 million (around A$8.68 million) from Raptor Capital International to satisfy the first part of the acquisition
- To gain the remaining 50 per cent interest, Comet will need to make a decision to mine
- Once due diligence has been completed, Comet is planning to conduct fieldwork in quarter four
- Company shares are up 11.8 per cent at 1.9 cents each
Comet Resources (CRL) has announced due diligence is on track for the proposed acquisition of the high-grade Santa Teresa Gold Project in Baja California, Mexico.
The due diligence process is part of the binding heads of agreement with privately-owned El Alamo Resources.
Once due diligence at the Santa Teresa Gold Project has been satisfied, and Comet receives US$6 million (roughly A$8.68 million) in initial funding, it will acquire 50 per cent of the project.
The US$6 million in funding will come from Raptor Capital International under a non-binding term sheet. This agreement includes up to US$20 million (roughly A$28.9 million) in funding.
However, the initial US$6 million will only be received once Comet delivers 15,000 ounces of gold and Raptor receives a net smelter return royalty of 2.5 per cent.
To gain the remaining 50 per cent interest, Comet will need to make a decision to mine.
Since the initial acquisition announcement, Comet has agreed 2.5 cents per share will be the deemed issue price for shares forming part of the first 50 per cent interest in the project.
Additionally, the deemed issue price of shares for the second 50 per cent interest will equal the volume-weighted average price (VWAP) of shares over the 20 days prior to the issue date of the shares.
“I am focused on completing all required work in the third quarter and am looking forward to finalising the transaction in what is shaping up to be a very interesting gold market in the second half of this year,” Managing Director Matthew O’Kane said.
The Santa Teresa Gold Project is located 100 kilometres southeast of Ensenada, Baja California, Mexico and 250 kilometres southeast of San Diego, California.
The project is prospective for high-grade gold, with an existing inferred resource of 64,000 ounces of gold at an average grade of 8.7g/t, reported at a cut-off grade of four grammes per tonne.
Comet Resources believes the due diligence process will be completed in the third quarter, with initial fieldwork planned for the last quarter of 2020.
Company shares are up 11.8 per cent at 1.9 cents each at 12:20 pm AEST.
