Kincora Copper’s major shareholder Origo Partners will hold an increased stake in the Mongolian explorer as the company plans to issue it with more than 14 million shares to settle a convertible loan.
Toronto-listed Kincora will issue 4.35 million shares at five Canadian cents to settle annual interest, while 10 million shares at 25 cents will be issued to finally clear the Can$2.5 million loan.
Following this, Origo will hold around 95.8 million Kincora shares, or 29.6% of the capital, with no outstanding convertible notes or other debt
instruments. Origo previously held 26% of the Mongolia-focused exploration firm.
Kincora’s president and CEO Sam Spring is upbeat about the company’s prospects in Mongolia following a number of positive announcements from the North Asian nation this year.
He believes there is further major exploration potential in the South Gobi desert, where Kincora’s ground lies within 140km of Oyu Tolgoi and 40km from Tsagaan Suvarga, another US$1 billion plus greenfield copper porphyry construction project.
“There are not too many areas in the world with the copper potential of the South Gobi and it is a relatively favourable jurisdiction compared to other copper frontiers such as the DRC or highlands in PNG,” he says.
“It’s comparable to Chile in the 1970s from an unknown geological and project development perspective with the region’s potential finally opening up following recent legislative change.”
He also expects Mongolia will return to investors’ radars relatively quickly once Stage 2 construction recommences at Oyu Tolgoi. “The biggest project in the history of the country was stuck for three years.
“But Mongolia’s back on the watch list and as the government even says, ‘Mongolia is open for Business (again)’. If Oyu Tolgoi happens the way it should then we will see world-leading growth rates coming through from the country,” he says.
It’s not a bad environment in which to be cranking up an exploration program. At the end of the last quarter the company had Can$1.6 million in the bank, which Sam Spring says, “is enough to go out and do some more exploration. It’s not a huge amount when it comes to a drilling program, but we probably could push the boat out and do some drilling on our cash reserves. There’ll be a decision in the next couple of weeks.”