Kincora unveils encouraging copper porphyry potential on China’s doorstep, advances spin-out with larger IPO planned
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Kincora has uncovered multiple porphyry targets at a newly identified prospect on its Mongolian ground, right on the doorstep of the world’s largest copper consumer and what is to be the fourth largest copper mine in the world. Plans to spin-out its Mongolian assets have also been upsized with a maiden resource planned.
As promised last week, Kincora Copper (ASX:KCC) today delivered an update on its Mongolian portfolio which highlighted several positive aspects of recent exploration in the country’s world-class porphyry region.
CEO Sam Spring said 2021 activities had identified a new intrusive system, Shuteen North, with initial work generating three new porphyry targets and one epithermal gold-base metal target with “significant scale potential”.
Field work also advanced Kincora’s understanding of the mineralised controls and size of the system at the separate West Fox epithermal gold-base metal target.
Kincora’s portfolio in total covers three large-scale and underexplored porphyry systems, and is located in the Southern Gobi copper-gold belt.
At the most advanced project – the Bronze Fox mining license – an independently defined 1.3-1.5Mt copper metal equivalent exploration target has been defined with plans to convert this to a JORC resource ahead of the spin-out of the Mongolian portfolio.
Relatively limited drilling supports upside to this, which is already one of the largest copper systems in Mongolia with only a small portion of Bronze Fox Complex drill tested.
This copper fertile region has previously lured miners like heavyweight Rio Tinto (ASX:RIO), which recently reached an agreement with the Mongolian government on the way forward for the development of the massive Oyu Tolgoi copper project and commencement of the underground mine.
Oyu Tolgoi is set to become the world’s 4th largest copper mine by 2030.
Spring told Stockhead that Oyu Tolgoi was a good demonstration of the largely untested geological potential of the belt, but also the various significant advantages the Southern Gobi provides from an exploration and development perspective.
“For example, it only took five years for Oyu Tolgoi to go from discovery to initial production from the open pit, which is pretty remarkable, particularly relative to many other copper jurisdictions,” he explained.
“This helps demonstrate many of the favourable attributes of the Southern Gobi desert, which is sparely populated and one of the world’s fastest growing mining and infrastructure regions, noting over 27Mt of coal was exported to China in 2020.”
Kincora’s strategic and district scale position is just trucking distance from global powerhouse China, which consumes over half of the world’s copper and is a top 5 importer.
Spring noted, “Despite relatively limited modern systematic exploration in the Southern Gobi, the discovery of Oyu Tolgoi, plus part development of Tsagaan Suvarga and exploration success at Kharmagtai, helps illustrate the geological prospectivity of the belt. It is estimated to already host over 85 million ounces of gold and over 50 million tonnes of copper.”
Due to their size, with broad intervals of generally lower grade copper and gold, porphyry style deposits are responsible for about 60% of the world’s current copper supply.
These deposits will play an increasing role going forward to meet even a fraction of the forecast demand and growth driven by decarbonisation and electrification of the global economy.
On top of that, prices are rising again in 2022 and are expected to be further supported this year through the continued economic recovery and the expanding use of copper in low-emissions technology.
Copper this week again breached the $US10,000 a tonne mark, as global stocks dipped to just three days’ supply.
Kincora is also continuing to advance the spin out of its Mongolian copper portfolio with a larger $7.5-10m IPO and subsequent listing on the ASX of Resilience Mining Mongolia.
Securing a Tier 1 broker has increased its planned IPO from $5m previously.
“Kincora has continued to responsibly and systematically advance and add value to our prospective project pipeline in Mongolia’s Southern Gobi, with promising results, as we work with and pursue the corporate agreement with Resilience,” Spring said.
“These results further highlight the potential of our existing Mongolian project portfolio and logic of having a motivated and focused group like Resilience drive these assets forward to the next stage.”
Kincora has granted Resilience an extension to the IPO and ASX listing, with a larger offering, a new lead manager, reimbursement of certain Mongolian expenditures, and the definition of a maiden resource for the Bronze Fox project.
Spring said the targets, team and foundations were in place for Resilience to add significant value this field season.
“The agreement with Resilience provides attractive upside to Kincora shareholders and will streamline focus to our Macquarie Arc porphyry portfolio in Australia,” he said.
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.