Kincora Copper’s Mongolian assets appeal to broker
Kincora is the sole owner of the Bronze Fox, Northern Fox and Tourmaline Hill copper-gold licences in Oyu Tolgoi.
The licences cover a total area of 60,000 hectares, of which the flagship Bronze Fox’s licence area covers over 22,000 hectares and has approximately 100 drill holes completed to date.
Exploration work is ongoing and the company screens well on the basis of relative valuation, strategy to add value at the project level while remaining funded into 2014, and the recently adopted remuneration policy for directors, said ResCap.
Investment in copper exploration and development into Mongolia from both major mining companies and investors has continued despite changes of government and recent mining legislation.
Four separate financings have been completed in the junior copper exploration space over the past six months underlining that the country remains a high priority global copper destination, said the broker.
Turquoise Hill, the separately listed Rio Tinto subsidiary that is developing the huge Oyu Tolgoi mine, is the barometer for Mongolian copper equities and has rallied 50% since its recent lows of mid-April.
On Kincora, ResCap said: “With a significant mineralised system confirmed, prospective for an economic copper porphyry ore body(s) and smaller scale oxide development potential, Kincora is an appealing advanced exploration play offering an attractive risk reward scenario skewed to the upside in our opinion.”
At a current market capitalisation of C$8m, ResCap rates Kincora as a speculative buy.