Kincora Announces Lead Order in Private Placement
Kincora Announces Lead Order in
Private Placement
/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S.
NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES/
• Kincora intends to raise up to $6m at $0.10 per Unit with a full
warrant
• Cornerstone investment from existing holder of approximately
28% shares
• Strong support from insiders, other existing and new investors
• Proceeds will be used to fund drilling for discovery at 5
independent and large scale porphyry targets and earlier stage
project pipeline activities
o Up to 18,000 metres of drilling
VANCOUVER, May 7, 2019 /CNW/ - Kincora Copper Ltd. (the
"Company", "Kincora") (TSXV:KCC) announces that it proposes to
undertake a private placement (the "Offering") of units at $0.10 per
unit (the "Units") to raise up to $6,000,000. The Units will be
comprised of one share (a "Share") and one warrant (a "Warrant"),
each Warrant entitling the holder to acquire a further share at a price
of $0.25 for a term of 2 years.
The Company is pleased to announce that following an independent
technical review of Kincora's targets and proposed work programs,
our largest shareholder, LIM Asia Special Situations Master Fund
Limited ("LASSMF"), will (subject to satisfactory documentation)
subscribe for its pro rata share of the Offering (which is approximately
28% as at the date hereof). The Company is also pleased to have
received strong indicative support from insiders, many existing and
new shareholders.
Chairman Cameron McRae commented, "I am delighted that we have
attracted a strong cornerstone position from our largest shareholder
and such interest from other experienced institutional resource sector
specialist and high net worth investors. The support and detailed due
diligence processes provide validation of our drill targets, strategy and
team.
This offering has been structured to align the immediate and medium
term capital markets strategy to our asset portfolio of 5 standalone,
large and drill ready porphyry targets. Success on any one of these
targets would indicate a new globally significant copper discovery."
Sam Spring, President and CEO, noted, "The offering will provide a
strong foundation for the drill bit to again drive Kincora's valuation
going forward, ramping up our exploration and expansion activities.
Since consolidating the dominant position in the Southern Gobi copper
belt in late 2016 and attracting a world-class technical team in 2017,
Kincora has been undertaking the first modern systematic district
scale exploration program in this highly prospective under-explored
copper belt. Kincora's technical team has an exceptional track record
of discoveries, and this offering supports the first target testing drilling
program under their watch.
Our drilling strategy today is the culmination of almost 30 years of
cumulative copper exploration experience in this belt by the senior
members of our exploration team, 5 years of exploration work and
model refinements by ourselves and previous owners (including
Ivanhoe Mines and IBEX) that provide us with high conviction to now
focus on the 5 large and independent targets within our Bronze Fox
and East Tsagaan Suvarga projects.
For their respective stages of exploration these targets are considered
as good as you get within a global setting. The independent technical
review commissioned by our largest shareholder supported a
"discovery" having already been made at Bronze Fox within the
underexplored target zone to the west of a key regional fault. This
target area has been significantly upgraded by recent exploration
activities. Confirmation of our geological models with positive results
from the proposed drilling have the potential to, in time, elevate both
projects to Tier 1 or world-class status.1
We're very pleased to have support from our investors, local
community, hard working team and look forward to working closely
with stakeholders going forward."
Exhibit 1: 5 independent and large-scale drill ready porphyry targets at
two mineralised projects, Bronze Fox and East Tsagaan Suvarga,
across the district scale license portfolio in the Southern Gobi copper
belt (CNW Group/Kincora Copper Limited)
Reinterpretation of existing data (including relogging and block model
analysis of over 24,000 metres of drilling at Bronze Fox), the
acquisition of additional geophysical data (induced polarization, gravity
and magnetics at both projects) and first phase drilling at East
Tsagaan Suvarga ("East TS") have advanced both projects
significantly resulting in new and exciting geological targets – in total 5
now large scale and independent targets proposed for drilling.
Proceeds of the Offering will support up to 18,000 metres of drilling in
multiple work programs primarily within two known mineralised
projects, Bronze Fox and East Tsagaan Suvarga, and advancing our
earlier stage pipeline and expansion strategy. Key work programs will
be:
• At the Bronze Fox project: Up to $2.2m expenditure on drilling
between 4,500-8,100 metres, resource definition and mining
license conversion;
• At the East Tsagaan Suvarga project: Up to $1.3m expenditure
on Phase 2 drilling of between 4,500-6,200 metres; and,
• Expansion, pipeline & G&A: Up to US$1m on project generation
for up to 4,000 metres of drilling; $0.6m for earlier stage project
pipeline exploration work ($0.6m); and, $0.9m for general
working capital.
Bronze Fox
At the wholly owned Bronze Fox project drilling is planned at two new
targets in the western and preserved monzodiorite zones where
previous drilling by Kincora returned higher-grade intersections. The
monzodiorite target areas sit across a key regional fault and in a
different mineralising system to the outcropping granodiorite zone that
has been the focus of previous exploration activities of Ivanhoe Mines
and Kincora.
These higher grade intersections include three of four holes drilled by
Kincora that returned greater than 1% copper at the West West
Kasulu prospect, including hole F62 which hosted 13m of 1.15% Cu or
1.41% CuEq, within 37m at 0.83% Cu or 1.04% CuEq and 794m at
0.40%CuEq2.
A scissor hole to F62, the anticipated first high priority hole of the 2019
drilling program, will for first time test the strongest and core
chargeability high zone coincident with the deep seated magnetic low
at Bronze Fox, drilling into the monzodiorite zone which supported the
37m at >1%CuEq intersection.
The West Kasulu prospect at Bronze Fox has an independently
defined exploration target of 416Mt to 428Mt grading 0.26% to 0.30%
copper for up to 2,437Mlb of copper and 0.84Moz gold, including
141Mt for 890Mlb of copper and 0.25Moz gold in the monzodiorite
zone at West West Kasulu3.
The 2019 field season drilling program is designed to advance the
strike potential away from the fault to the west in two preserved
monzodiorite systems, the West West Kasulu and Southern Western
trend targets, and demonstrate the interpreted significant increase in
tonnage and grade potential.
East Tsagaan Suvarga
Kincora's wholly owned East Tsagaan Suvarga ("East TS") project is
located approximately 10-15 kms to the east of the Tsagaan Suvarga
porphyry Cu/Au mine ("TS"), which is under development on the
western margin of the Tsagaan Suvarga Intrusive Complex on a
transverse structure. Tsagaan Suvarga has had over US$370 million
invested to date and is forecast to produce 316,000t Cu and 4,400t
Mo pa.
Importantly, the Tsagaan Suvarga deposit is hosted in Devonian age
rocks, which also host the Oyu Tolgoi cluster of deposits that include
the high-grade Hugo Dummet and Heruga mineralization within a
preserved porphyry setting. This latter series of orebodies underpin
Oyu Tolgoi's potentially 100-year mine life being scheduled to be the
world's third largest copper mine.
Kincora's geological concept that 2019 drilling is seeking to confirm is
that Hugo and/or Heruga style mineralization may be present beneath
the younger cover in the East TS tenement in a favorable preserved
porphyry setting. This is supported from being on the eastern margin
of the same Devonian intrusive complex as Tsagaan Suvarga, first
phase drilling and subsequent encouraging geophysics.
Within a confirmed brownfield and preserved porphyry environment, a
maiden target testing drill program is proposed by Kincora seeking to
test three independent targets at East TS, which like at Oyu Tolgoi, sit
within a favourable structural setting and Devonian age intrusion
below a carboniferous cap. These targets are interpreted as a series
of intrusions supporting the concept of preserved higher-grade
orebody(s) within the Tsagaan Suvarga mineralised system at
moderate depths. Each of the three targets at East TS are large in
scale potential, with individual coincident geophysical anomalies
equivalent to Hugo in size at Oyu Tolgoi, or SolGold's Alpha
discovery, but at interpreted shallower depths.
Applications and Closing of the Offering
The Company has set a record date of May 3rd, 2019 for determining
the eligibility of a subscriber to the Offering to rely on the "Existing
Shareholder Exemption" from prospectus requirements. The Existing
Shareholder Exemption is to encourage participation from all existing
shareholders without requiring the time and cost commitment of a full
prospectus.
Kincora is pleased to have secured cornerstone support from
LASSMF, the Company's largest shareholder, for its pro rata share of
the Offering (which is approximately 28% as at the date hereof). The
Company is also pleased to have received strong indicative support
from insiders, many existing and new shareholders.
The Offering is proposed to close May 22nd, 2019 and Units will be
allocated on a pro rata basis if the Offering is over-subscribed. The
Company may however elect to increase the size of the Offering to
accommodate subscribers, subject to the consent of the TSX Venture
Exchange.
In light of market conditions, the Company has sought to structure the
Offering in terms of size, pricing and warrants, to align the immediate
and medium term funding needs to its exploration strategy across the
described 5 targets, earlier stage exploration pipeline and expansion
plans.
For the warrants to be in-the-money implies a pre-money market
capitalization of the Company of up to $33 million, versus Kincora's
previous $40-50 million market capitalisation when drilling hole F62 at
Bronze Fox (which the independent technical review commissioned by
LASSMF saw as a "discovery" hole). The current valuations of other
Canadian listed copper porphyry exploration plays in emerging market
jurisdictions also provides supportive valuation parameters for the
Offering warrants to likely be in-the-money upon exploration success.
Exercise of the warrants would provide Kincora with up to a further
$15 million of funding for further drilling and project development
optionality, including potential strategic transactions at the asset level.
Closing is subject to receipt of approvals of the TSX Venture
Exchange. All Shares and Warrants issued in connection with the
Private Placement will be subject to a four (4) month hold period.
The Company may pay finders' fees in connection with the Offering in
accordance with the policies of the TSX Venture Exchange.
Notes
All amounts are expressed in Canadian dollars unless stated otherwise.
1
The Company recognises that the terms "World Class" or "Tier 1" are subjective and the Company's targets are conceptual
in nature, yet to be supported by drilling results to support an sufficient understanding of their potential grade or scale, let
alone potential economics that are commonly associated with such terms. However, both the Bronze Fox and East TS
projects have complementary geological and geophysical characteristics, with significant target zone potential and are in
known mineralised systems in a proven prolific but underexplored copper porphyry belt. It is the view of the Company that
confirmation of our geological models with positive results from the proposed drilling have the potential to demonstrate, and
in time, elevate both projects to Tier 1 or world-class status.
2
F62 – 37m grading 0.83% copper and 0.14g/t gold (1.01% CuEq) from 573m, within 391m @ 0.50% CuEq (0.41% copper
and 0.08g/t gold) and 794m at 0.40% CuEq. The Copper Equivalent (CuEq) calculation represents an estimate for the total
value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage based on
spot prices (Cu $3.11/lb, Au $1279/oz and Mo $7.1/lb). Grades have not been adjusted for metallurgical or refining
recoveries and the copper equivalent grades are of an exploration nature only and intended for summarizing grade. The
copper equivalent calculation is intended as an indicative value only.
3
The potential quantity and grade is conceptual in nature, and based on nearest neighbour and ordinary krige estimates
within an interpreted 0.2% Cu grade shell based on 81 drill holes spaced approximately 200 x 200 m within the West Kasulu
prospect within the western central portion of the Bronze Fox Intrusive Complex. The drill spacing is too broad to define
grade continuity, but does illustrate geological continuity. No assumptions regarding eventual economic extraction have been
applied. The potential quantity and grade is conceptual in nature, there has been insufficient exploration to define a mineral
resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.
For further details please refer to the January 25th, 2018 press release "Large copper-gold porphyry target quantified at Bronze
Fox" https://www.kincoracopper.com/news/press-releases/11-2018/19-large-copper-gold-porphyry-target-quantified-at-bronze-
fox
About Kincora
Kincora Copper Limited operates in the Gobi region of South
Mongolia. It has a dominant land position and is undertaking the first
modern systematic district scale exploration centred on the drill ready
Bronze Fox and East Tsagaan Suvarga (ETS) porphyry projects. This
wholly owned portfolio has attracted a first-class technical team who
are credited with multiple discoveries of Tier 1 copper deposits.
Reinterpretation of existing data (including relogging, and block model
analysis, of over 24,000 metres of drilling at Bronze Fox), the
acquisition of additional geophysical data (Induced Polarization,
gravity & magnetics at both projects) and first phase drilling at East TS
under the watch of the current technical team since late 2016 have
advanced both projects significantly resulting in new and exciting
geological targets.
All data has been iteratively interpreted in a technically rigorous
workshop format by the Kincora in-house technical team with
appropriate involvement of specialist consultants of their respective
field and advisors to the technical committee. This has ensured that
quality targets have been identified and prioritised for drilling, with a
detailed multiple target, multiple phase drill programs budgeted at
Bronze Fox and ETS (and fully permitted).
These targets sit in the "target testing" to "advanced drilling" phases of
a projects development, which for copper porphyries offers the
maximum uplift in project (and shareholder) value. These targets, for
their respective stages of exploration, are considered "as good as you
get within a global setting". Confirmation of our geological models with
positive results from the proposed drilling have the potential to
demonstrate, and in time, elevate both projects to Tier 1 or world-class
status1.
For further information: www.kincoracopper.com
• Exploration strategy 2019:
https://www.kincoracopper.com/about-us/exploration-strategy-
2019
• Corporate strategy: https://www.kincoracopper.com/about-
us/corporate-strategy
• "Introduction to Mongolia" presentation:
https://www.kincoracopper.com/investors/mongolia
• https://twitter.com/KincoraCopper
Qualified Person
The scientific and technical information in this news release was
prepared in accordance with the standards of the Canadian Institute of
Mining, Metallurgy and Petroleum and National Instrument 43-101 –