BHP Billiton options Asia Gold’s Mongolian properties

Vancouver — A unit of BHP Billiton (BHP-N) has picked up an option to acquire half of a land package in Mongolia’s Gobi Desert from Vancouver-based Asia Gold (ASG-V). The project area is viewed as prospective for porphyry copper-gold deposits.

The option agreement covers 3,629 sq. km in Asia Gold’s large West Gobi property in southern Mongolia. To earn its half-interest, BHP Billiton must spend US$2 million on exploration before the end of 2007, with a portion of this dedicated to a Falcon airborne gravity gradiometer survey over the project area by the end of 2006.

The global mining giant can boost its interest in the project to 70% by funding a feasibility study on at least one exploration target to a maximum value of US$45 million.

As part of the deal, BHP Billiton also picked up units of Asia Gold valued at U$1 million. Each unit consists of 1.5 shares.

Early this spring, Asia Gold launched a $2.6-million exploration program targeting copper-gold deposits in Mongolia.

The junior holds 67 exploration licences totalling 42,167 sq. km in the nation. Some are prospective for porphyry copper-gold deposits while others cover epithermal gold and black-shale-hosted gold deposits and showings.