Holy crap, that is one heavily-varnished lower end!!!

Take my word for it, this motor has seen wa-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-a-ay more than 20,000 miles and probably few oil changes...if any. Despite that, it probably still has good bones. Plan on replacing the oil pump, cam drive assembly and clutch basket + pack, right from the get-go. It takes a lotta miles to wear grooves like those in the clutch basket and the gear teeth don't inspire confidence (though that could just be photographic artifacts). I wouldn't be surprised to find worn gear teeth with the 1st & 2nd gear pairs. None of these items are really pricey.
Don't be too surprised if the crankshaft assembly is still within spec, the rest of the tranny still healthy and maybe striped wear across the shift fork pads. These heads are really durable, too; most likely, a light cut/lapping & new valves are all it'll take to set things right...done properly.
FWIW, I'd strongly suggest not cutting corners on the rebuild. Used cores are few & far between...and...for about the same parts cost as rebuilding a CT70K0, or Z50, motor, this motor can be returned to mechanically-new condition. That could easily include a new clutch + primary drive gears, if needed. Seriously, ready for the next 30,000+ miles, in good health. Don't really know how many miles to expect between rebuilds. The lump in my main rider has seen ~24,500 miles, so far, and shows no signs of fatigue, whatsoever. Most of those miles went on at 50mph+, which means lots of heavy throttle/high rpm operation. IMO, that's the whole appeal of this motor...parsecs of smooth, bulletproof, road power.