Origo Partners has paid $3 million for a 30% stake in Altan Takhi Company (ATC), the sole owner of exploration rights at the Budag Tolgoi copper-gold prospect in the Gobi region of Mongolia.
“We are very encouraged by the exploration work already undertaken on Budag Tolgoi and believe the prospect shows the potential to become a significant copper-gold mine with a long mine life,” Origo ceo Chris Rynning said in a statement.
The acquisition will allow Origo to strengthen its position in Mongolia to exploit growing Chinese demand for natural resources, Rynning said.
Under the terms of the agreement Origo holds the right to increase the stake to 80%, at a cost of $5.5 million, before April 2011.
ATC has carried out an extensive exploration programme involving geological mapping and prospecting, topographic and geophysical surveys, and geochemical sampling, trenching and drilling of 43 diamond holes in the Budag Tolgoi prospect, Origo said.
Results from the survey show hosted copper and gold mineralisation close to the surface, including one 17-metre interval containing 3.26% copper and one 28-metre interval containing 1.4% copper, London-listed Origo said.
Origo has taken stakes in two other Mongolia-based copper-gold prospectors since June 2010, both with exercisable extension options.
It holds a 10% interest Huremtiin Hyar, 100% owner of two exploration licences in an area known as the Baruun Hundlun, and a 25% stake in Kincora, sole holder of the Bronze Fox copper-gold prospect licence.
Origo had a net asset value of $162.5 million as of June 30, with metals and mining comprising 44% of its asset portfolio.
It is based in Beijing and focuses on pre-float acquisition and merger opportunities to boost Chinese investment in natural resources and clean technology.