Rare earths focused RareX (ASX:REE) remains strongly leveraged to exploration success and growth on two fronts after making a strategic investment in NSW-focused explorer Kincora Copper.

RareX has subscribed for another 3,500,000 shares at 20c each as part of Kincora Copper’s current $10 million capital raising and Initial Public Offering (IPO) on the ASX.

Upon completion of the IPO, RareX will hold ~7% (8,483,333 shares) of Kincora’s issued capital while also retaining a 35% free-carry in multiple projects operated by Kincora, including the flagship Trundle Project in NSW.

In early 2020, RareX sold 65 per cent interest in some NSW copper gold assets to TSXV listed Kincora Copper.

RareX retained 35% free carried interest – it doesn’t pay any exploration costs — and scored a big chunk of Kincora’s listed equity in the deal.

I meant the explorer was now strongly leveraged to exploration success and growth on two fronts — its flagship Cummins Range rare earths project in WA and copper-gold exploration in the Lachlan Fold of NSW.

Kincora’s main focus was ‘Trundle’, a target 30km which sits in the same rocks as from the mammoth Northparkes copper-gold project 30km away.

Over 92% of prior drilling at Trundle had been to less than 50 metres depth with just 11 holes beyond 300 metres (0.5% of holes drilled).

The Kincora-RareX JV enjoyed immediate success.

The first hole hit 51m at 1.17 g/t gold and 0.54 per cent copper from 39m, including a higher grade 20.5m section grading 1.94 g/t gold and 1.18% copper from 57.6m.

“It’s not often you see such high grades near surface within a porphyry environment,” said Kincora’s John Holliday, who was also principal discoverer of the world-class Cadia deposit.

Kincora’s $10m IPO will accelerate ongoing drilling and exploration activities at the key ‘Trundle Park’ and ‘Mordialloc’ targets at Trundle.

RareX managing director Jeremy Robinson said Kincora had made excellent progress with exploration at Trundle over the past year.

“This capital raise and listing on the ASX will enable Kincora to continue drilling for the foreseeable future in a much more receptive market,” Robinson says.

“We are looking forward to seeing what they can achieve with this next pivotal phase of exploration.”

This article was developed in collaboration with RareX, 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.

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