Carrying out the first modern exploration in world-class copper belt in Mongolia
Strong institutional backing and a 12 month budget for drilling up to 18,000 m
Experienced management with a track record and knowledge of the country
What the company does:
The Vancouver-headquartered group is seeking to make the next Tier 1 discovery in the East Asian landlocked country. There is no official definition of what a Tier 1 deposit is, although for those who speak 'mining' it is understood that they are 'large, long-life, low cost and expandable'.
The company has actually been operating in Mongolia since 2010 and in late 2016, became the dominant landholder in one of the most prospective areas of the Southern Gobi belt - between, and on strike, with Rio Tinto’s (LON:RIO) giant Oyu Tolgoi copper-gold mine, which is currently being ramped up, and the Tsagaan Suvarga Serven Sukhait porphyry development project.
Oyu Tolgoi is expected to be the third largest copper mine in the world, expected to produce 450,000 tonnes of copper a year, with a 100 year mine life.
Kincora has five independent large-scale drill targets within two projects. These are the West West Kasula target and the West Extension (south) target at its flagship Bronze Fox project. At the East Tsagaan Suvarga project (East TS) project, the company has three brownfield targets.
An independent review of Bronze Fox in 2017 came up with a block model, which supported a large-scale copper-gold porphyry target, and beat expectations. It showed a potential target range of between 416 Mt (million tonnes) and 428 Mt, grading 0.26% to 0.30% copper for up to 2,437Mlb (million pounds) of copper and 0.84Moz (million ounces) gold. Kincora has an exploration target at Bronze Fox of between 1.3 and 1.5 Mt (million tonnes) of copper equivalent metal.
It is worth noting that Kincora's management have an exceptional record, including its independent chairman Cameron McRae, the former President and CEO of Oyu Tolgoi, who says he spent US$6bn commissioning the open pit and commencing underground development. They also have so-called 'skin in the game' with management accounting for 7% of the shareholder register.
How is it doing:
In June, the firm brought in C$6.25 million via an oversubscribed financing to finally start the drillbit turning, namely targeting up to 18,000 metres of drilling and advancing its early stage pipeline and exploration strategy, and to fund the next 12 months' activity.
Notably, around 60% of the offering was anchored by two large natural resource institutional investors, which account for over 40% of Kincora's share capital - LIM Asia Special Situations Master Fund Limited (LASSMF) was a cornerstone of the offering.
The same month, drilling at Bronze Fox - a project which covers 40 sq km, kicked off - focused on two large new targets, which are known to be mineralized but have not been drilled since 2012.
On September 10, the group reported encouraging assays from first phase drilling at Bronze Fox, where six holes were completed.
Highlights from the West West Kasulu target included 20 metres at 0.41% copper (0.64% copper equivalent - CuEq) from 140m and 120 metres at 0.31% copper, with 0.41% copper equivalent from 700m. The work confirmed and better defined the large lower grade porphyry system at Bronze Fox with localised higher grade zones in the western zone proximal to a key regional fault, the company said.
Kincora also said a maiden 6,200 metres testing three target zones had kicked off at its East TS project. East TS lies just 15km east of the US$1bn Tsagaan Suvarga porphyry copper, gold mine, which has had more than US$370 million invested in it so far and is forecast to produce 316,000 tonnes of copper a year.
- More drill results
- Further discoveries in Mongolia
- Copper price upswing
What the boss said:
Kincora's president and CEO Sam Spring spoke to Proactive in June, when the start of drilling at Bronze Fox was announced, and talked of the advantages of operating in Mongolia.
"It's a peaceful democracy. It's a fantastic place from an exploration perspective, very cheap, very favourable in terms of costs. It's the most sparsely populated country in the world, we're in one of the most sparsely populated regions - pretty dead flat Gobi desert. Trucking distance to China - the largest consumer of copper in the world and very favourable in terms of accessing very skilled labor," he said.
On the wider aims of the firm, he added: "The market's tough. We can't do anything about that. We can't do anything about the copper price, we can't do anything about perceptions in terms of Mongolia but what we can do is put this money into the ground and see if these five large independent targets at two projects are what we think they are. We're at that pointy end where a discovery even in this market will get re-rated and it will be rewarded or is of such a scale it would be the first major copper discovery anywhere globally since 2014."
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