Vancouver-based Kenadyr Mining (TSX-V: KEN) announced today that it has entered into a non-binding letter of intent in connection with a proposed option and joint venture agreement with Gold Mountains Asset Management in respect of the Borubai gold project, located in the Kyrgyz Republic in Central Asia.
In a press release, the miner explained that the plan is to grant Gold Mountains an exclusive option to acquire up to a 50% interest in Borubai. In order to exercise the option, Gold Mountains, which is a subsidiary of China's Zijin, would have right but not obligation to invest not less than $10 million in exploration.
Once the option or Gold Mountains 50% interest earnings are terminated, Kenadyr and Gold Mountains would form a joint venture for the Borubai project with Kenadyr acting as the operator. According to the Canadian firm, exploration would focus on both the South and East Zones with Zijin providing access and logistics to enable drilling of the South Zone from underground using its mining infrastructure. The East Zone would continue to be drilled from surface.
The proposed joint venture with Zijin should fund and facilitate further expansion and exploration"Kenadyr's drilling program to date demonstrates the mineralization comprising the orebody found at the TBL Mine, operated by Zijin, continues strongly in two directions along strike onto Kenadyr's Borubai License," Brian Lueck, Kenadyr Chief Executive Officer, said in the media brief. "The proposed joint venture with Zijin, as described today, will fund and facilitate further expansion and exploration drilling to completely delineate (to measured and indicated categories) both the South and East Zones on the Borubai License."
The 164 square-kilometre Borubai Exploration License, located some 100 kilomeres away from the Kyrgyz capital Bishkek, has had 81,800 meters of historic drilling. It encircles the TBL or Taldybulak Levoberejnyi Mine, which was recently built by Zijin and contains 3.2 million ounces in reserves and resources at a grade of 7.2 g/t.
According to Kenadyr, the high-grade South Zone alone contains a historic unclassified Soviet Resource Estimate of 900,000 oz. Au @ 8.3 g Au/T, based on a 4 g Au/T cut off.