Project Overview

Regional potential

The Devonian age, gold rich Oyu Tolgoi copper porphyry system is a Tier 1 asset, being the largest high-grade group of Paleozoic porphyry deposits known in the world, which coupled with the underexplored Tsagaan Suvarga Devonian porphyry system encourages exploration in this underexplored Southern Gobi district. Kincora holds the dominant landholding between and along strike from these two large scale copper systems.

Geologically, copper porphyries occur in clusters focused on key geological structures within established belts — they do not occur in isolation. There is increasing recognition of the Southern Gobi’s copper potential, being one of the last under-explored known copper frontiers with various analogy’s in terms of legislative roadmap, existing producing mines/development projects, limited exploration activities and understanding of geological potential to the development of Chile’s copper industry in the early 1970’s. In terms of landmass size and important geological structural features/controls, the Devonian belt in the Southern Gobi is particularly comparable to Northern Chile, where there are over 15 current large mines producing ~2Mtpa Cu (>10% of global production).

Exploration Approach

Post the IBEX transaction, copper experts credited with multiple Tier 1 discoveries have joined Kincora’s team, the Company has implemented an exploration strategy to replicate the systematic approach successfully applied in discovering similar profile Tier 1 gold rich copper porphyry discoveries and exploration activities are ongoing advance a unique portfolio along the value curve.

A comprehensive workshop and field visit was concluded in Sep’16, including the newly formed Technical Committee, industry leading specialists and geologists with extensive recent experience in the gold rich Southern Mongolian copper belt.

A second workshop was completed in Jan’17 to review 2016 activities, support recommencement of initial exploration activities (commenced in early Feb’17), ahead of board approvals for more extensive activities in 2Q’17.

Field season activities in 2017 are anticipated to drill test two high priority target areas that are analogies to the two existing large-scale economic copper projects in the belt with proof of geological interpretation for a discovery likely to support significant value add.

Activities to date have identified priority targets, assisted understand the belts potential and built out a pipeline of regional prospects focused on the following key attributes:

  • Scale: Kincora’s portfolio supports the advancement of potential Oyu Tolgoi and Tsagaan Suvarga (Devonian) analogues, and/or traditional gold rich Carboniferous finger type porphyries (such as Kharmagtai or Bronze Fox). Exploration activities currently are focused on replicating systematic and proven techniques that have been successful at other similar profile targets, including the Tier 1 copper-gold discoveries that the Technical Team has prior experience with.
  • Shallow targets: The focus is targets on the margins of half grabens and/or uplifted fault blocks where outcrop or subcrop provides a geological window to support integration of geophysical datasets to de-risk exploration.

Since closing the IBEX transaction, Kincora has announced the only two new, known Devonian porphyry targets in the belt since the discovery of Oyu Tolgoi - Bayan Tal & East Tsagaan Suvarga (“East TS”).

Bayan Tal is an “Oyu Tolgoi” style target and East TS a ‘brownfield’ “Tsagaan Suvarga” style target (within the Tsagaan Suvarga Intrusive Complex).

New analysis of age dating, whole rock geochemistry and magma fertility highlights a common suite between quartz monzodiorite within the Serven Sukhait open pit at Tsagaan Suvarga, the high-grade underground deposits at OT and East TS. This is an important new advancement in understanding of Devonian belts formation with implications to future regional exploration.

Summary of targets anticipated to be drill tested in 2017, subject to board approvals, are:

  • East TS: Confirmed Devonian “brownfield” exploration target along strike to the Tsagaan Suvarga (“TS style”) open pit development project within the TS Massif porphyry system. East TS is an open pit target being only 13km from the existing Serven Sukhait 307Mt @ 0.54% Cu open pit sulfide deposit, which a further oxide resource of 21Mt @ 0.40% Cu. Mapping, age dating/stratigraphy, petrology and fertility in 2016 supported our geological model with ongoing field work refining near surface drill targets with the objective of the 2017 season to confirm our analogue to TS with copper mineralization.
  • Bayan Tal: Confirmed Devonian “Oyu Tolgoi style” stratigraphy at the Bayan Tal Igneous Complex (“BTIC”), including 18m @ 0.66% CuEq down hole on the margin of the interpreted system.  As illustrated by magnetics, Bayan Tal is one of the most significant untested Complexes in the Southern Mongolian belt with multiple drill ready targets supporting a candidate for a new Tier 1 porphyry discovery.
  • Pipeline: Integration of extensive ground magnetics, detailed mapping, regional and local geochemistry, petrography, whole rock geochemistry with fertility analysis, and age dating are ongoing to advance a portfolio of high quality, ranked exploration targets across the district level portfolio developing additional drill targets and areas for systematic exploration in spring and summer of 2017.
  • Bronze Fox: analysis is ongoing regarding the extensive lower grade copper-gold system intersected to date at Bronze Fox. For the period of the 106-exploraiton license dispute (2013 until 2015) this target was largely sterilized and since impacted by depressed copper prices. For only one field season, in 2012, was Kincora not impeded with its exploration efforts in the Bronze Fox district, the Company returned one of the most favorable exploration results to date in the region at the West Kasulu prospect. Exploration on the Bronze Fox and Western license border returned over 800 metres at over 0.40% copper equivalent, including 37 meters at over 1% copper equivalent. Following the recent improvement in prices and investor sentiment towards exploration there maybe scope to now follow a similar strategy to that being pursued by Xanadu Mines at its Kharmagtai project by defining a geological resource to provide a parameter for exploration of a new mineralized system that could support sufficient further tonnage and grade to provide visibility for a development project. However, given the capital intensive nature of such drilling relative to that of advancing the geological models presented for the two targets, Bayan Tal and East TS, which are analogues to the mines in the belt and progressing our regional portfolio up the value curve, such a program is a secondary priority despite the significant re-rating enjoyed by Xanadu from pursuing a not dissimilar strategy at Kharmagtai. 

Last updated February 14th, 2017

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