Kincora Secures Strategic Partnership with Woomera for Mongolian Assets
KINCORA COPPER LIMITED (KCC) Share Update August 2024 Sunday 11th
Kincora Partners with Woomera for Mongolian Copper-Gold Project
Kincora Copper Limited (TSXV & ASX: KCC) has announced a significant partnership with Woomera Mining Limited (ASX: WML) to develop the Bronze Fox copper-gold project in Mongolia. This collaboration aims to unlock the potential of the Southern Gobi copper belt.
Instant Summary:
- Kincora completes strategic review, partners with Woomera Mining.
- Woomera to invest up to US$4 million over 5 years for 80% interest.
- Option to purchase remaining 20% for US$10 million and 1% NSR.
- High-impact drilling program to commence next month.
- Kincora to receive A$450,000 in Woomera shares and A$100,000 cash.
- Agreement allows Kincora to focus on NSW copper-gold projects.
Partnership Details
Kincora Copper Limited has successfully completed a strategic review of its Mongolian assets, resulting in a binding Earn-In Term Sheet with Woomera Mining Limited. Under this agreement, Woomera has the right to invest up to US$4 million over a period of five years to earn an 80% interest in the Bronze Fox copper-gold project. Upon earning this interest, Woomera can either purchase the remaining 20% from Kincora for US$10 million and a 1% Net Smelter Royalty (NSR) or enter into a shareholders' agreement where Kincora is free-carried until a Final Investment Decision (FID) for project development is made.
Woomera is set to raise A$2 million through a strongly supported placement and proposed Share Purchase Plan to support this agreement. The funds will be used to commence a high-impact field program next month, including new discovery and resource expansion drilling, along with the conversion of a second mining license.
Strategic Benefits
This partnership allows Kincora to focus on its flagship NSW copper-gold projects located in the highly prolific Macquarie Arc. Kincora will receive A$450,000 in Woomera shares, becoming its largest shareholder, and A$100,000 in cash payments. This scrip component provides Kincora with significant upside potential as the Bronze Fox project advances.
Woomera's CEO, Ralf Kriege, expressed enthusiasm about the partnership, highlighting the substantial scale of the Bronze Fox systems and the opportunity to transform Woomera into a key player in the Southern Gobi copper belt. The Bronze Fox project is poised to become the fourth major porphyry district in this world-class copper belt.
Market Context
The agreement comes at a time of significant investment in Mongolia's critical minerals sector. Major players like BHP, Rio Tinto, and Zijin Mining have increased their exposure to Mongolian assets. The Oyu Tolgoi copper-gold project is on track to become the world's fourth-largest copper mine by 2030, and CRU estimates that Mongolian copper production will increase significantly by 2028.
Kincora's Bronze Fox project hosts one of the largest series of porphyry complexes in the Southern Gobi copper belt. Recent exploration has identified new large-scale drill targets and refined geological concepts, positioning the project for significant development.
This partnership is expected to have a positive impact on Kincora's stock, as it provides the company with the financial and technical support needed to advance its Mongolian assets. The agreement also allows Kincora to focus on its core projects in NSW, potentially unlocking further value for shareholders. Woomera's involvement brings additional credibility and resources to the Bronze Fox project, which could enhance investor confidence and market sentiment.
Investor Reaction:
Analysts are likely to view this partnership positively, as it aligns with Kincora's strategic objectives and provides a clear pathway for the development of the Bronze Fox project. The involvement of a well-funded and motivated partner like Woomera is expected to boost investor confidence. However, some investors may adopt a wait-and-see approach until the initial drilling results and further developments are announced.
Conclusion:
Investors should keep a close eye on the progress of the Bronze Fox project and the upcoming drilling program. The partnership between Kincora and Woomera has the potential to unlock significant value in the Southern Gobi copper belt. Subscribing to updates and staying informed about the latest developments will be crucial for making informed investment decisions.