EXPLORER Kincora Copper is well positioned to benefit from an improvement in relations between the mining industry and authorities in Mongolia, according to Mongolian Investment Banking Group (MIBG). This statement was made by MIBG in an updated research note on the company.
The exploration camp at Kincora Copper’s Bronze Fox Copper-Gold Project in the South Gobi region.
It points out that Kincora has one of the most advanced copper projects in Mongolia in its Bronze Fox property in the South Gobi region. Despite being host to the major Oyu Tolgoi (OT) copper-gold deposit, the South Gobi copper belt has seen little or no systematic exploration.
MIBG says, “Mongolia is one of the last frontiers. Recent Mongolian legislative change provides a number of analogies to Chile’s copper industry in the early 1970s or the Pilbara’s iron ore sector in the early 2000s.”
The catalyst for development may be the deal signed by the government in May allowing Rio Tinto to begin the underground stage of development at OT. This means that providing finance can be obtained, work on the expansion is set to begin after a two-year dispute. Discussions are expected to begin again with a syndicate of international institutions to secure at least US$4 billion for the second stage - the largest financing of its kind in mining.
MIBG says the OT deal should mean that financing will now flow for other projects, including Kincora’s Bronze Fox project.
Exploration on Bronze Fox has yielded some interesting results, including discovery of an 800-metre section grading over 0.4% and 37 metres at 1%.
“Technical merits and previous exploration results have attracted significant interest from various industry groups and supporting a unique shareholder register for a junior,” MIBG points out. “Kincora is the only remaining listed copper junior in Mongolia without a strategic partner.”
MIBG released initiating coverage on Kincora in March 2014. The recent update explores the specific developments within the sector, as they relate to the company. It also discusses the positive outcome of the 106 licence dispute where Kincora regained control of previously revoked licences and provides an outlook for the company in the coming exploration season.
Kincora says its 2015 Bronze Fox exploration program will include surface exploration on a number of targets across the site with the program covered by existing cash reserves.
President and CEO Sam Spring says, “Base case field season activities for the 2015 field season remain funded to refine various prospective targets and we are well positioned should there be an improvement in investor sentiment towards Mongolia.”