Comet Resources has spiced up its portfolio with the acquisition of the high-grade Santa Teresa gold project in Mexico. Drilling at Santa Teresa has already returned a bevy of eye-catching gold hits including 3.9m at 39.0 g/t gold and 1m at a whopping 958.4 g/t gold.
Comet’s Santa Teresa project sits in the gold-rich El Alamo district of the Baja region in Mexico, just south of the US-Mexico border and around 250km southeast of San Diego in California. The project is composed of two mineral claims covering a total of 202 hectares including the high-grade Santa Teresa gold deposit.
Historical mining through the El Alamo region boasts production of between 100,000 and 200,000 ounces of gold from alluvial workings, the artisanal underground mine at Santa Teresa and its surrounds. Regional production dates back to the late 19th century before being curtailed by the Mexican Revolution in 1912.
Upcoming exploration at Santa Teresa will certainly capture attention where large, high-grade gold targets have already been identified and confirmed by modern exploration with resource definition and development immediately ahead.
Drilling at Santa Teresa has included 32 diamond drill holes that have outlined gold mineralisation along more than 1,000m of strike with the company claiming the mineralisation remains open in all directions and extends at depth.
Results from this drilling have been nothing short of spectacular with a significant number of holes returning results at greater than an ounce of gold per tonne. Intercepts have included 2m at 32.4 g/t from 19m, 3.9m at 39.0 g/t from 121m and 1m at 958.4 g/t gold from 239m.
The Santa Teresa deposit already boasts a Canadian NI43-101 Inferred resource of 64,000 ounces with the company now working to extend the resource and undertake the required compliance work for Australia’s JORC standards.
Comet Resources 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 a lot of scope to extend mineralisation.”
Comet acquired its initial 50 per cent interest in Santa Teresa by paying the projects owners, El Alamo Resources, $100,000 in cash. The balance of the consideration for this initial interest is $1,000,000 in Comet shares and a further cash payment of $100,000, which is payable upon ‘subsequent conditions’ being satisfied. Comet can move to 100 per cent ownership of the project within two years by taking the decision to mine at Santa Teresa and making additional cash and share payments.
The project acquisition comes with an additional bonus via a funding arrangement with US-based Raptor Capital - also part owners of El Alamo Resources - that will initially fund Comet’s work to the tune of US$6 million through a gold stream and royalty facility which can be expanded to up to US$20 million.
Comet’s acquisition of the Santa Teresa project is part of the company’s focused campaign of project generation across the strengthening gold and copper sectors. The company’s Mexican purchase comes on the back of Comet’s transaction to acquire the Barraba Copper project in northern New South Wales earlier this year.
The Barraba copper project covers 2,375 hectares of highly prospective volcanogenic massive sulphide ground 550km north of Sydney in NSW. The project takes in the historic Gulf and Murchison mines that produced high-grade copper and zinc for a short period in the late 19th century. These two mines will be the focus of initial exploration over the project, with initial groundwork having identified the copper-bearing stratigraphy through the project area.
With both gold and copper riding a wave of euphoria and trading at 5-year highs, Comet looks poised to use its strong balance sheet and technical expertise to great effect. The recent Santa Teresa acquisition is already well advanced with a return to drilling and an updated resource on the horizon, there should be no shortage of results from Comet in the coming months.
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By Matt Birney
