TORONTO (miningweekly.com) – Bolstered by the recent restart of Rio Tinto’s multibillion-dollar Oyu Tolgoi Phase 2 in the copper belt, TSX-V-listed explorer Kincora Copper on Wednesday advised that it had reached an agreement with privately owned explorer High Power Exploration (HPX) to merge two Kincora subsidiaries with two of HPX's subsidiaries.
Kincora noted that the combined land-holdings in the Southern Gobi copper/gold belt created a consolidated land-holding of more than 1 500 km2 of prospective exploration licences. These dominated a key geological trend between and along strike from the significant Oyu Tolgoi and Tsagaan Suvarga copper mines, supporting an industry-leading proposition of copper/gold and gold exploration targets.
Under the terms of the all-scrip deal, HPX would become a shareholder of Kincora and support the exploration efforts by making available its proprietary Typhoon technology that was instrumental in the discovery and delineation of high-grade orebodies at Oyu Tolgoi. Former Oyu Tolgoi president and CEO Cameron McRae had also agreed to assist Kincora in a managerial role to oversee the transition.
Kincora had been one of the most active copper exploration groups in the Southern Gobi for five years and the transaction would combine one of the largest known regional geophysical and surface geochemical datasets globally, supporting various style targets including ‘mega' (Oyu Tolgoi-type) porphyry discoveries, ‘traditional’ gold-rich copper porphyries, and epithermal and Carlin-style gold deposits.
The consolidated land package had at least six porphyry and one epithermal gold advanced targets, including the most significant untested complex in the belt, the company stated.
"The merger is an opportunity that wouldn't be available at other points of the Mongolian and commodity cycles. [It is also] at an attractive scrip acquisition price, with involvement of one of the industry's leading groups who will be a new shareholder and provide proprietary technical services," commented president and CEO Sam Spring.
He added that the merger would support considerable synergies, scale and strategic appeal to Kincora's existing Bronze Fox and Tourmaline Hill intrusive complex targets, as well as the recently secured Ulaan Khudag licence. It would also help secure additional prospective land.
Kincora advised that near-term catalysts included testing advance-stage targets, proving the geological interpretation of the regional portfolio and similar age/style/mineralised targets as other porphyries in the belt, additional strategic land, and other potential corporate opportunities.
Kincora’s stock on Wednesday double on the TSX-V to C$0.05 a share.