Kincora Copper Ltd (CVE: KCC, FRA: BS4B) – The Next Mega-Copper Discovery


Kincora Copper Ltd (CVE:KCC, FRA:BS4B) – The Next Mega-Copper Discovery

Current Price: C$0.34

Shares Outstanding: 63.9 million

Market Capitalization: C$21.7 million

Cash: ~C$5.92 million (post-EBRD financing)

A discovery in copper of the proposed magnitude significantly rewards investors.

SolGold (TSX:SOLG, Mkt Cap: $1.1B), is a very comparable case study, sky-rocketing 19x with just 10 drill holes in between. Recent examples also include Camino Minerals (TSXV:COR, Mkt Cap: $27M), who’s stock jumped from $0.35 to a high of $2.23 in a matter of days upon announcement of their first two drill holes (106 meters of 1.3% Cu) at the Los Chapitos project in south Peru.

Kincora is armed with extensive data, modern exploration techniques, and hard-hitting backers such as Robert Friedland. The company will have the next significant copper discovery this cycle. The technical team already has multiple tier-1 discoveries under their belts, and are convinced Kincora is sitting on the biggest one yet.

Geopolitics

Mongolia is once again open to mining.

The Democratic Party, solely responsible for running the country into the ground, has been removed and the Mongolian People's Party now control 85% of Parliament, wielding clear legislative power and authority. Their mandate from the get-go has been clear, turn the economy around.

In support of the newly-elected government’s Economic Recovery Plan, the IMF has approved a three-year, $434 million loan for Mongolia as part of a broader $5.5 billion financing package. In terms of GDP, this is the fourth-largest package in IMF history, stressing the international community’s commitment to Mongolia’s future economic success.

A large part of this reform and IMG financing hinges on the reform of the mining sector, which constitutes a large part of Mongolia’s economy.

These developments are significant, and for the first since 2012, Rio Tinto is now resuming drilling and revisiting corporate opportunities in the belt.

Mongolia’s saw significant exploration between 1996-2006, which included discovery of the Oyu Tolgoi deposits. Significant regional exploration continued through 2009 and included the joint-venture between Robert Friedland’s Ivanhoe (now Turquoise Hill Resources) and BHP Billiton. Robert Friedland was responsible for the lion’s share of exploration, and at Ivanhoe’s peak, it owned portfolio of assets encompassing over 126,000 km2 of prospective land.

The geological data collected gave incredible understanding of the regional geology and controls on mineralization. These included an understanding of the local geology of the Oyu Tolgoi porphyry systems, as well as other copper occurrences such as Tsagaan Suvarga, Kharmagtai and Bronze Fox.

When the windfall tax was announced in May 2006, Ivanhoe released the majority of its regional landholding, however, the tax was repealed in in August 2009. The best acreage was picked up again, this time by IBEX, an entity indirectly controlled by Robert Friedland’s by High Power Exploration Inc.

Kincora Copper was formed in mid-July 2011, and began the consolidation of the area. First was the RTO of the Bronze Fox license, originally part of the original Ivanhoe Bronze Fox project, which in 2005 was designated as one of four, alongside Oyu Tolgoi, Kharmagtai and Nariin Sukhait, high priority targets for large scale porphyry and skarn copper mineralization.

Previous drilling included 72 holes for over 12,000 metres confirming continuous mineralization on a 9-kilometer strike, mostly at the Kincora named “West Kasulu”, a large low-grade copper-gold feature from surface to depth (returning between 0.4% and 0.9% copper equivalent).

In 2012, Kincora acquired Golden Grouse LLC, to consolidate the rest of the original “Ivanhoe” Bronze Fox project, including the Western license and extension of the West Kasulu target.

Exploration on the Bronze Fox and Western license border returned over 800 meters of over 0.40% copper equivalent, including 37 meters at over 1% copper equivalent. Furthermore, 9 of the 15 holes drilled in 2012 at the Tourmaline Hills gold prospect in the Western license have returned intervals of at least 1g/t Au, up to 7.7g/t Au and with up to 75g/t Ag locally in the mineralization zone, often with elevated copper values.

In Q1 2016, Kincora secured a new exploration license, Ulaan Khudag (Red Well), located 15 kilometers along the mineralized trend from the Rio Tinto controlled, Oyu Tolgoi project. An identified contact one continues to the eastern and western sections of the license, the margin just to the east returning a previous 2% copper and 0.25g/t gold sample with anomalous values also to the west.

In May 2016, Kincora announced its agreement with IBEX, resulting in Kincora more than tripling its landholding in the Southern Gobi copper belt, totaling over 1,500 km2.

Kincora has two drill ready targets, which are analogies to the existing two large scale mines in belt. East TS is a “brownfield” Tsagaan Suvarga (TS) style target. TS is over a $1 billion project, owned by Mongolyn Alt (MAK). It contains 1.5 million tonnes of copper reserves, as well as 59,874 tonnes of molybdenum.

Bayan Tal is an “Oyu Tolgoi” style target, which of course is Rio Tino’s US$14 billion mega project, home to 32.4 million tonnes of copper, 34.0 million ounces of gold, 262.2 million ounces of silver, and 12,900 tonnes of molybdenum.

The company closed a $4.52 million in financing in August 2017, and recently announced the second tranche $1.4 million investment by the European Bank for Reconstruction and Development (EBRD), for a total of $5.92 million.

Kincora is currently drilling the East TS copper porphyry target. The maiden reverse circulation and diamond drill program at the East TS target comprises approximately 2,870 metres to less than 265 m depth for 12 holes. It is proposed that during a second phase Kincora will undertake infill geophysics and a follow-on 5,000-metre drill program.

Powerpoint: http://www.kincoracopper.com/sites/default/files/corporate_presentations/20170828_Kincora_Deck.v2.pdf

Cheers,

Sean & Palisade Global Investments

Sean Zubick

Sean Zubick

Contributing Editor

Email:

In his first venture as an entrepreneur, Sean co-founded Palisade Global Investments in 2013. Having previously served as the V.P. of a merchant banking firm in Toronto, Sean brings a deep reservoir of knowledge and expertise in the investment banking, private equity and digital advertising spaces. The markets have been part of Sean’s DNA for as long as he can remember – his father was a market maker on Bay Street for nearly a decade at Burns-Frye (BMO Nesbit Burns) and subsequently went on to serve as a senior Commodities and Options Trader at National Bank. Sean has built a vast network of investor and industry contacts, spanning across North America, Europe, Asia, and Australia, that he has skill fully engaged to generate over $100M in term sheets for Palisade’s portfolio. His knowledge base and investment experience extends to a wide array of sectors, including Mining, Renewable Energy, Agribusiness, Infrastructure, Mobile/Telecom, Healthcare, and Media. Sean was a NCAA Division I Scholarship Athlete at UNC-Charlotte, which he graduated from in 2006; he was also a National Pool Player for Canada. Sean, his wife Danielle, and their daughter Scarlett Noelle are proud residents of the Commonwealth of the Bahamas.

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