Kincora Secures Funded, Successful and Motivated Partner for Mongolian Assets Successful completion of strategic review process for Kincora's Mongolian assets has resulted in a binding Earn-In Term Sheet ( Agreement ) with
Kincora Secures Funded, Successful and
Motivated Partner for Mongolian Assets
Successful completion of strategic review process for Kincora's Mongolian assets has resulted in
a binding Earn-In Term Sheet (
Agreement
) with
Woomera Mining Limited
(ASX:
WML)
(Woomera)
for the Bronze Fox copper-gold project
Woomera has the right to spend up to US$4 million over a period of 5 years to earn a 80% interest
and may elect to then:
purchase the remaining 20% interest from Kincora for US$10 million cash consideration and
a 1% Net Smelter Royalty (NSR); or,
enter into a shareholders agreement whereby Kincora is free carried until the point of a Final
Investment Decision (
FID
) for project development (minimum reserve of 1Moz gold
equivalent)
Woomera is a well credentialed partner with a highly successful team and strong shareholder
register, and will conclude a A$2 million raising via a strongly supported placement and proposed
Share Purchase Plan to support the Agreement
High impact field program proposed from next month including new discovery and resource
expansion drilling coupled with a second mining license conversion
Kincora will receive A$450,000 share consideration in Woomera becoming its largest shareholder
and A$100,000 cash payments
Scrip component provides highly attractive upside to success and the advancement of the fourth
major porphyry district in the world-class Southern Gobi copper belt
Agreement allows Kincora to focus on the flagship NSW copper-gold projects located in highly
prolific Macquarie Arc and follows the strategy of doing deals with funding and technical partners to
unlock the value of the existing project pipeline
Melbourne, Australia--(Newsfile Corp. - August 12, 2024) - Kincora Copper Limited
(TSXV: KCC)
(ASX: KCC)
(
Kincora
or the
Company
) is pleased have executed the Agreement that outlines the
terms which Woomera, an arms length and unrelated party to Kincora, may earn into the Company's
wholly owned Mongolian subsidiaries and thereby obtain exposure to the Company's Bronze Fox
copper-gold project, located in the world-class and rapidly emerging Southern Gobi copper belt.
Cameron McRae, Chairman of Kincora, and Sam Spring, President and CEO stated,
"
Woomera has a mandate for large scale new discovery opportunities backed by a team and
shareholder register with very considerable prior successes.
They are a well motivated and funded
partner looking get drilling from September with a high impact program.
This transaction realises Kincora's strategic objective to retain upside to our Mongolian assets, focus
efforts and capital towards our core NSW projects, and, look to do deals to unlock the value of project
portfolio.
We look forward to working with Woomera and realising the very significant upside we mutually see in
Bronze Fox that we strongly feel will shortly emerge as the fourth major porphyry district in the rapidly
developing Southern Gobi copper belt.
"
Ralf Kriege, CEO of Woomera, expressed his enthusiasm about the opportunity, saying,
"We are excited to be able to offer our shareholders exposure to these high-quality assets which offer
walk-up drill targets with globally significant potential.
The large existing resource inventory, in what we feel is only a very small part and on the margin of
one of three near surface and large porphyry systems does however illustrate the substantial scale of
the systems and of our opportunity.
Overnight we have transformed Woomera into a key player over one of the most active new
exploration and mining frontiers in the world for copper. My recent site visit really emphasised the
level of activity taking place in this belt, true district scale of the cluster of porphyry systems at Bronze
Fox and scope for the higher grade core of these systems.
We look forward to very shortly getting on the ground to commence activities, leveraging the existing
team, permits and infrastructure in place."
Key terms of the Earn-in Agreement
The Agreement follows a strategic review process for Kincora where a range of potential partnering,
funding and other asset initiatives were considered with strong interest from a number of counterparties.
The key terms of the Agreement with Woomera are summarised as follows:
Woomera may earn up to an 80% equity interest in the asset holding subsidiaries by funding US$4
million in expenditure within five years of the date of the Agreement. This includes a minimum
expenditure of US$0.5 million in the each of the first two years of the earn-in period.
Upon earning and exercising the right for the 80% interest Woomera can elect to:
i
.
purchase the remaining 20% equity interest in the subsidiaries from Kincora for a purchase
price of US$10 million and a 1.0% net smelter royalty (NSR); or,
ii
.
enter into a shareholders'
agreement where Woomera free-carries Kincora until the point of
a Final Investment Decision (FID) for project development (minimum threshold of a JORC
2012 compliant reserve of 1Moz gold equivalent).
Woomera completing a capital raising, commitments for which have already been received with
respect to a A$1.7 million placement with a further Share Purchase Plan also proposed.
Both parties entering into a formal agreement to reflect the terms of Woomera's operations of the
Bronze Fox project and is conditional upon the parties obtaining shareholder and regulatory
approvals.
Woomera has agreed to cover the holding costs and spend a minimum of US$500,000, including
satisfying the minimum statutory field related commitments and drilling for the project between the
date of its shareholder approval and December 31
st
, 2024.
If Woomera withdraws from the earn-in prior to earning an 80% interest it must forfeited any equity
interest it has obtained
in the asset holding entities to Kincora.
Cerberus Advisory and QR Lawyers advised on behalf of Kincora with respect to the external strategic
review process and Agreement.
About the Mongolian Portfolio
The Agreement for the Mongolian assets with Woomera comes at a time of recent significant investment
in the Mongolian critical minerals sector, including the Oyu Tolgoi copper-gold porphyry project being on
track to become the world's fourth largest copper mine by 2030.
In the last 24 months, BHP, Rio Tinto and Zijin Mining have made investments, increasing or initiating
Mongolian exposure.
CRU estimates that copper production from Mongolia will increase to ~800,000t by 2028 from ~300,000
in 2023, a very significant increase the equivalent of ~2% of current copper production, very noteworthy
in an industry currently struggling to maintain existing supply levels and before the major projects in-
country reach designed steady state production (CRU Copper Market Outlook - December 2023).
Xanadu Mines is in the midst of a Pre-Feasibility Study for its flagship Kharmagtai copper-gold project,
having recently completed one of the largest recent porphyry exploration drilling programs in the world
with ~54,000m of drilling. Doriemus Plc has recently completed a A$6 million raising at a pre-money
A$23 million valuation to support the reserve take over of Asian Battery Minerals Limited who recently
made a small intrusion related magmatic nickel-copper-PGE discovery at the Oval project with the
support from BHP's Xplor program.
In addition to ongoing production from the open pit and ramping up of the underground at Oyu Tolgoi,
construction activities are ongoing at the large greenfield Tsagaan Suvarga open cut copper-
molybdenite project (oxide production scheduled 2025 and sulphide production 2026) and there is rapid
advancement of the Kharmagtai copper-gold project since Zijin Mining's strategic investment and
partnership (financial investment decision planned for 2024 and targeted production in 2027).
Following Kincora's focus having pivoted to NSW in 2019/2020, the Company's recent activities have
capital efficiently advanced the wholly owned Mongolian portfolio including securing an initial mining
license, announcing a maiden JORC resource and updated exploration target, making a new (third)
intrusive complex discovery (the Shuteen North Intrusive Complex), and, revisiting the geological setting
and targeting model for the Bronze Fox Intrusive Complex.
The Bronze Fox project hosts one of the largest series of porphyry complexes, largest land positions and
most advance stages of porphyry exploration outside of the existing development projects in the
Southern Gobi copper belt.
Recent capital constrained exploration at the project has yielded a number of
new large scale drill targets and new geological concepts.
Kincora's existing team, infrastructure, permits and proprietary project generation knowledge supports
Woomera's ability to immediately ramp up exploration at Bronze Fox as well have a competitive
advantage to secure additional projects.
The portfolio assets included in the Agreement comprise:
Bronze Fox mining license (the eastern license of the Bronze Fox project),
Tourmaline Hills exploration license (the western license of the Bronze Fox project),
Kincora's geological and administrative team (all having international experience),
White Pearl field camp (year round facility), and,
one of (if not) the largest project generation databases for Mongolia.
Figure 1:
The Southern Gobi is a globally significant source of new copper supply, with the
Bronze Fox project the fourth emerging porphyry district in the belt
One of the fastest growing new infrastructure and mining districts anywhere in the world, within trucking distance to the world's largest consumer
of copper
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2305/219591_kincorafig1.jpg
The Bronze Fox Project
Bronze Fox was originally identified by Ivanhoe Mines as a highly rated project and retained with Oyu
Tolgoi and Kharmagtai being projects excluded by the Falcon JV with BHP.
The project now hosts three large and underexplored porphyry intrusive complexes, with a large JORC
resource and exploration target defined for a small part of the Bronze Fox Intrusive Complex, an
extensive gold-copper system identified at the earlier exploration stage Tourmaline Hills Intrusive
Complex, and a new third intrusive complex only recently discovered and never drilled, called Shuteen
North.
Capital constrained recent exploration by Kincora has refined a target pipeline of up to twelve (12)
porphyry copper and seven (7) epithermal gold targets ranging from greenfield to brownfield resource
expansion. In addition, there are plans to secure a second mining license, providing mining license
coverage and 30 year tenure over the full Bronze Fox project and three currently identified intrusive
complexes.
JORC Inferred Resource and Exploration Target
On July 26, 2022, Kincora noted the maiden inferred Mineral Resource Estimate ("MRE") and updated
Exploration Target for the West Kasulu prospect reported under the JORC code by Resilience Mining
Mongolia Limited (Resilience) (refer to release titled "
Mineral Resource and Exploration Target for
Bronze Fox
" and July 2022
"Resource Estimation for the West Kasulu Porphyry Copper Prospect,
Mongolia"
report by David Larsen of DF & JG Larsen Consulting Pty Ltd.). It should be noted that the
Exploration Target is conceptual in nature, that there has been insufficient exploration to estimate a
Mineral Resource and that it is uncertain if further exploration will result in the estimation of a Mineral
Resource.
At the time, Resilience sought to acquire 100% of Kincora's Mongolian project portfolio but the
transaction failed to complete.
The parameters for the MRE and updated exploration target were inline with Resilience's strategy for a
near term, modest scale oxide development project and shallow brownfield drilling at the Bronze Fox
Intrusive Complex, coupled with near surface (open pit) greenfield targets at the West Kasulu and
Tourmaline Hills prospects.
The West Kasulu prospect is open on strike and at depth, hosted within a small portion of the much
larger mineralised Bronze Fox Intrusive Complex (BFIC), which is one of three so far identified near
surface and under explored intrusive complexes at the wider Bronze Fox project. The West Kasulu
prospect is thought to be a less prospective part of the project, being an eroded level of the porphyry
system with higher grades across a key regional fault to the west (which is open) and a multiple of
separate intrusive targets at different (more favourable) preservation levels within the larger complex.
The Exploration Target comprises potential mineralisation below the current MRE from approximately
325m below surface to over 1,200m below surface (Figure 2).
The maiden MRE for the West Kasulu copper-gold prospect was defined as:
194.1Mt at 0.26% Copper Equivalent (CuEq), at a 0.2% CuEq cut-off and to a depth of
approximately 325m below surface (Table 1), utilising the same depth and cut-off criteria as the
Kharmagtai project.
This includes an oxidised component of:
8.6Mt at 0.26% copper fully oxidised copper to approximately 35m below surface; and,
11.1Mt at 0.25% copper partially oxidised copper between approximately 35m and 80m below
surface.
Table 1: West Kasulu Inferred Mineral Resource
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2305/219591_kincorafig2.jpg
Notes:
Some numerical differences may occur due to rounding
Copper equivalent, CuEq (%) = Cu (%) + 0.5204*Au (g/t), based on Au at USD$1400/oz and Cu at USD$3.4/lb and relative metal recoveries
(Cu recovery 90% and Au recovery 78%)
Oxide material reported above 0.2% Cu cut-off as Au may not be recoverable in the oxide zone
Unless otherwise stated, all elements included in the metal equivalents calculation have a reasonable potential to be received and sold
Total resource is reported above 800m RL (approximately 325m below surface) and within a notional pit shell
BOCO = Base of Complete Oxidation, TOFR = Top of Fresh Rock
The MRE and Exploration Target estimate is based on 74 reverse circulation (RC) and diamond holes
drilled from 2005 to 2019. The deposit is open at depth and along strike.
The Exploration Target for West Kasulu has been estimated in accordance with Clause 17 of the JORC
Code, of between approximately 100Mt and 300Mt at 0.25% to 0.35% CuEq. The potential quantity and
grade are conceptual in nature and there has been insufficient exploration to estimate a Mineral
Resource, and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The
grade and tonnage estimates constituting the Exploration Target were determined using a block model
based on historic drilling.
The majority of the MRE and exploration target are situated within the existing Bronze Fox mining licence
with the balance being on the adjoining Tourmaline Hills exploration licence (collectively the Bronze Fox
project). Plans are currently in place to convert the Tourmaline Hill's exploration license to a mining
license, thus secure a minimum 30 year tenure over the full Bronze Fox project and three currently
identified intrusive complexes - see Figure 3.
Figure 2: A MRE for the at and near surface portion of West Kasulu, and an Exploration Target
for the deeper part of the system, is consistent with the strategy to derive value from the
potential early development of the near surface oxide resource and shallow porphyry
expansion potential, while seeking partners to fund deeper drilling
Longitudinal section: Block model supporting inferred resource (red) and exploration target (mustard)
1
The majority
of hole F62, which intersected 929m @ 0.37% CuEq (from 343m) including 318m @ 0.53% CuEq (from 515m) with 37m @ 1.01%
CuEq (from 573m), did not contribute to the MRE.
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2305/219591_kincorafig3.jpg
Figure 3: The Bronze Fox project host three known intrusive complexes, with drilling planned
to confirm a new downhole discovery at the Shuteen North Intrusive Complex that is thought
to be related to the massive Shuteen lithocap
Plans are in place to secure a second mining license on the western license, thus securing 30 year tenure across the full Bronze Fox project
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2305/219591_kincorafig4.jpg
New Exploration Model
Exploration activities have refined the exploration model for the Bronze Fox Intrusive Complex (BFIC).
Prior exploration by Kincora, and Ivanhoe Mines, were based on an "Oyu Tolgoi' style target model,
predominately seeking to drill induced polorisation and magnetic anomalies, often associated with
outcrop and now viewed as often situated in an eroded (and less prospective) part of the mineralised
system. However, reviews of alteration, mineralisation and geophysical signatures supports a Reduced
Porphyry Cu-Au (RPCG) system and target model, with a number of new targets associated with the
margin of peak gravity features (similar to that associated with the existing resource), but at areas under
cover, interpreted to be within a preserved setting and potential core of the system, offering higher grade
potential than defined in the existing resource on the margin of the system.
BFIC is thought to be the first RPCG system identified in Mongolia and noting many similar RPCG
systems are now recognized in Asia including some very large mineralised systems (eg Pulang is the
largest porphyry Cu-Au deposit in China).
This revised exploration model has the potential to refine existing targets and also identifies new
prospects, significantly expanding the search space and noting previous exploration focused on the
West Kasulu prospect situated on the outer edges of the ~8 x 4km BFIC.
The core target zone under a RPCG exploration model at BFIC, supported by a large albite alteration
zone with coincident magnetic and induced polarisation anomalies, often with peak gravity anomalies,
and extensive surface geochemical anomalies. This region has had limited prior drilling.
The view presented is that the metal endowment defined to date on the margin of the system in an
eroded setting at West Kasulu potentially highlights scale potential of the targeted high-grade core(s) of
a preserved RPCG system at BFIC and is particularly encouraging.
New Shuteen North Target
In 2023, Kincora undertook maiden ground truthing of regionally significant magnetic anomalies and
reconnaissance exploration in the southern section of the western Tourmaline Hill's exploration license.
These activites identified significant areas of subcropped and multiple phased mineralised intrusives,
thought to be potentially related to the Shuteen lithocap, the largest lithocap in the Southern Gobi, which
is situated to the south.
The lithocap at Oyu Tolgoi was a key geological indicator that supported original exploration efforts for
the driving porphyry system, with the causative source of Shuteen a highly prospective target given its
size.
Recent capital constrained exploration by Kincora has identified four large and shallow porphyry copper,
and, one epithermal gold targets at the Shuteen North Intrusive Complex (SNIC). A maiden drilling
program seeking to confirm a new down-hole discovery at the SNIC is planned for the current field
season.
About Woomera
Woomera Mining Limited (ASX: WML) (Woomera) is an Australian public exploration company with a
mandate for large scale new discovery opportunities backed by a team and shareholder register with
very considerable prior successes.
In Australia, Woomera has a portfolio of assets prospective for battery metals (lithium nickel, copper +
PGEs) and gold in the Ravensthorpe Yilgarn and Ashburton areas of Western Australia plus the
Musgrave Province in South Australia, along with copper-gold mineralisation in the Gawler Craton of
South Australia.
Woomera is an arms length and unrelated party to Kincora. Relating to the Agreement, Kincora will
receive A$450,000 share consideration in Woomera, becoming its largest shareholder and A$100,000
cash payments.
For more information, please visit Woomera's website at
https://www.woomeramining.com.au
.
About Kincora
Kincora Copper is dual listed on the ASX and TSX-V (ticker "KCC") and is an active explorer and
project generator focused on world-class copper-gold discoveries that has recently executed four
agreements that unlock up to A$60 million in multiple year partner funding. Further deals and new
projects that offer a clear value path and targeted partnerships are proposed.
Kincora's portfolio includes district scale landholdings and scale-able drill ready targets in both Australia
and Mongolia's leading porphyry belts, the Macquarie Arc and Southern Gobi, respectively, and, the
Company is targeting exposure to initially 10,000 and then 30,000m+ pa of drilling.
For more information please visit Kincora's website at
www.kincoracopper.com
.
This announcement has been authorised for release by the Board of Kincora Copper Limited
(ARBN 645 457 763)
For further information please contact
Kincora Copper Limited
Sam Spring, President and Chief Executive Officer
+61431 329 345
Cerberus Advisory
Duncan Gordon, Executive Director
+61404006444
Kincora Copper Limited
Executive office
400 - 837 West Hastings Street
Vancouver, BC V6C 3N6, Canada
Tel: 1.604.283.1722
Fax: 1.888.241.5996
Subsidiary office Australia
Vista Australia
Level 4, 100 Albert Road
South Melbourne, Victoria 3205
Disclaimer and Previously Reported Information
The scientific and technical information this announcement is extracted from reports lodged as market
announcements referred to above, quarterly reports, project summaries and are available on the