Welcome. That doesn't look bad at all, nice candidate for any type of build. I think Matt is right.
If it were mine I would :
Dump the oil and filter, drop the oil pan and see what is in it(filings ,shavings or pieces), Check the primary chain see if is slack... @ 38,000 miles it should be, but it may have had some work done to it recently. If the primary chain is slack and wearing on the cam chain tentioner -rebuild. If it is kinda slack you could zip it back up ,oil and filter it,clean the carbs and make sure it is able to turn over freely ,battery and attempt to make it run.
If you are serious ,and you're not happy with the slack on the primary chain there should be no question or fear about taking it apart and see what else is worn like cam chain, you can check all your bearings,valves.... can reseat the valves if needed, check your gears, clutch condition, shifter fork , change out the oil seals around shifter and kickstart, new engine gasket kit will save you from leaky O rings on the head, and pan gasket can save you a mess on the floor.
You never know what you'll get with a donor motor, could be worse than what you have now,you won't know until you take a look at the one you have. How's the compression on this motor?Is it only the odometer mileage that is frightening? Are you sure that that is the original speedometer,it could have been dropped and replaced with a used one with higher miles on it.
You never know what the story is with an engine until you take it apart ..... so once you've changed the worn parts it doesn't matter what the history was, because you'll be making the next chapter of history on a freshened motor.
Well, that was long winded but that's what I would do. Good luck . get a manual and keep us updated, this looks like a nice project.
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