Kincora gears up for ASX listing as copper price hits fresh high
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There’s no better time to be preparing to dual list on the ASX than when copper is running red hot, there is a lack of junior copper peers, you have two rigs turning with very good results, with plans for over 34,000 metres of drilling. Kincora Copper fits that profile readying to join the ranks with the lodgement of its prospectus.
TSX Venture Exchange-listed Kincora Copper will soon be launching a raising of up to $10m to accelerate and expand its ongoing drilling activities and set it up for a secondary listing on the ASX targeted for March 30.
The company has now lodged its prospectus with the Australian Securities and Investments Commission outlining its plans to issue up to 50 million CHESS Depositary Interests (CDI) at 20c per CDI.
CDIs are a simple mechanism allowing international companies to list their shares on the ASX and for Kincora the ratio of shares to CDI is one to one.
With the last close at 31c in Canada (31.5c AUD), pre-money value of only $11.5m with likely over $13m in cash post listing, Kincora offers investors significant leverage to exploration success and the copper price environment.
And Kincora couldn’t have timed it better, with copper hitting a fresh 9.5-year high last week and trading over $US9,000 ($11,600) a tonne.
Chairman Cameron McRae said an ASX listing was only logical for the junior copper explorer given its key assets were located in the super-hot Lachlan Fold Belt of New South Wales.
“In the board’s view the ASX is the natural stock exchange for the company, with Kincora’s primary focus and value drivers now related to our Lachlan Fold Belt (LFB) assets in NSW, Australia, where we seek to become the leading pure-play explorer in what is Australia’s foremost copper porphyry belt,” he said.
The Lachlan Fold Belt has become one of Australia’s hottest mining addresses thanks to Alkane Resources’ (ASX:ALK) Boda discovery in September 2019. The region is also host to Newcrest Mining’s (ASX:NCM) giant, low-cost and successfully producing Cadia copper-gold mine, Australia’s largest and most profitable gold mine.
The company has assembled an industry-leading technical team that has made multiple Tier 1 copper discoveries, including Cadia.
This includes John Holliday, the same man that discovered and managed the development of Newcrest’s Cadia and Marsden copper-gold porphyry mines. Holliday has over 30 years of experience mostly with mining heavyweights BHP (ASX:BHP) and Newcrest, and is based in the region. Kincora’s team are looking to repeat this success again.
“Our assets and team are better known in this domestic market and by dual listing on the ASX we are seeking to access previously untapped local investors who have significant interest in funding local exploration projects,” McRae said.
“We consider the listing will be positive for the future of the company including for raising capital, liquidity and market valuation.”
Kincora is currently drilling the only brownfield project, Trundle, held by a listed junior in Australia’s foremost porphyry belt — the Macquarie Arc in NSW. Trundle shares the same mineralised system as the Northparkes mine, which is Australia’s second-largest porphyry mine (to Cadia) and hosts 4.5Mt copper and 5.5Moz gold.
When it comes to porphyry deposits, size counts.
These multigenerational monsters are responsible for ~60 per cent of the world’s copper, most of its molybdenum, and significant amounts of gold and silver. In the Macquarie Arc these deposits generally host very high copper grades and also high amounts of gold.
Kincora has a district-scale project pipeline and is looking to confirm its position as the leading pure-play porphyry explorer in Australia.
And Kincora has a big year planned.
“The company plans to drill a minimum of over 17,000 metres across three projects in the LFB in the next 12 months as part of a minimum of 34,000 metres total drilling program, significantly expanding our ongoing drilling program that comprises two rigs currently operational at the Trundle project,” president and CEO Sam Spring said.
“With an enterprise value of $C11.5 million ($11.7m) for the offering that certainly provides investors very significant leverage to exploration success and pipeline of news flow.”
Morgans Corporate and Bridge Street Capital have been appointed joint lead managers and Ernst & Young has been appointed Australian legal advisor.
The capital raising is expected to open on March 11.
This article was developed in collaboration with Kincora Copper, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.