Far East Gold (ASX:FEG) has entered into an agreement with PT Iriana Mutiara Idenburg to acquire the 95,280 hectare Idenburg Gold Project in the Indonesian province Papua.

The Idenburg Project has over USD 25 million in historical exploration and has attracted some of the world’s “largest” gold producers to explore the property including Barrick Gold Corporation (NYSE:GOLD), Newmont Corporation (ASX:NEM), and Newcrest Mining (ASX:NCM).

Under the binding term sheet, Far East Gold, which has a market capitalisation of USD 32.19 million, made an initial payment of USD 150,000 and has a three month exclusivity period to complete a binding conditional share purchase agreement (CSPA). 

The exclusivity period may be extended up to three times by mutual agreement, and must pay USD 50,000 for each 30-day period. 

Upon securing a 51% interest in the project, Far East will pay a further USD 250,000 once the CSPA has been signed. They will then issue at least 2.5 million shares based on a issue price of at least USD 0.10 per share, spend USD 5 million within 24 months of signing the CSPA, and issue $6.5 million worth of shares. 

Far East Gold will also complete a Feasibility Study in Indonesia to allow the contract of work to move from an exploration phase to a 30-year mining operation phase, upon moving to holding an 80% interest in the project. 

Meanwhile, to move to 100% interest, the vendors may elect to have the remaining 20% economic interest either carried on terms to be agreed in the CSPA or converted to a 2% net smelter royalty. 

Managing Director Shane Menere says the Idenburg Project is being acquired from the same local partner who owns the Woyla contract of work that Far East Gold is exploring. 

“Given the strong interest shown in the Idenburg Project by numerous parties, the fact that Far East Gold has been given the opportunity to further develop the project is an endorsement of the work that has been done to date by the highly experienced Far East Gold team, including being the first company in the Woyla contract of work’s history to successfully drill the project,” he says. 

“It is rare to find a project of such calibre with a substantial historical database of work completed by many of the world’s major gold miners.

“We are very excited based on the extensive historical database of exploration work and many high-grade drill intercepts that demonstrate the potential for Idenburg to host a multi-million ounce company maker”

Far East Gold notes of the 14 prospect areas identified, only five prospects have been drill tested focused within three main prospects. The mineralised zones intersected at each of the three prospects remain open along strike and to depth.

The company also announces the resignation of both Chairman Paul Walker and Chief Financial Officer (CFO) and Director on the Board Marc Denovan, effective immediately.

Walker, who has been a founder and Chairman of Far East Gold since the company’s inception, will be focusing on his consultancy business. He will remain on the board as a non-executive director.

Far East Gold co-founder Justin Werner has been appointed as non-executive Chairman of the company, effective immediately. Werner has been involved in the Indonesian mining industry for more than 20 years and has knowledge in resource discovery and mine development.

Denovan, who is leaving to focus on his family business, is replaced as CFO by Kyla Garic, effective immediately.

Far East Gold is a copper and gold-focused explorer with six advanced projects in Australia and Indonesia.