Corporate Strategy

29th September 2020

Dear shareholders,

At Kincora Copper our focus is world-class copper-gold porphyry discoveries with a near term ambition to become the clear leading listed pure play porphyry explorer in Australia’s foremost porphyry belt.

Kincora has a strategic and district scale position in the key belts of the Macquarie Arc, within the Lachlan Fold Belt, in Central West NSW.

In August 2020, the Company completed an oversubscribed C$5.33 million equity raising. We welcome our new shareholders to the register and thank existing shareholders for their continued support.

The primary use of funds is significantly expanding the ongoing drilling program at our flagship Trundle copper-gold porphyry project from 6 holes to potentially over 20 as well as better understanding the potential of the near surface skarn system. We are also preparing for an IPO on the ASX and progressing work on our 7 additional licences in NSW.

The Company has assembled an industry leading technical team. This team has made multiple Tier 1 copper discoveries with a unique knowledge and a competitive advantage in the Macquarie Arc – indeed, our technical director, John Holliday, is the foremost porphyry figure in this region. Our board and management have “skin in the game” equity ownership and are backed by a strong institutional and family office shareholder base.

The Macquarie Arc is a world-class gold-copper porphyry belt hosting an estimated >100Moz gold and >24Mt copper endowment1. It is Australia’s foremost porphyry belt, serviced by favourable existing infrastructure and a clear Tier 1 jurisdiction. As summarised by Richard Schodde, a globally recognised minerals economist, “as an economic geologist … NSW, Lachlan Fold Belt, for copper and gold, is the place to be”2.

Notable flagship projects in this region include:

  • the multiple deposits that form the Cadia gold-copper porphyry mine (forming Australia’s largest gold mine, and cornerstone asset for Newcrest Mining);
  • the Northparkes copper-gold porphyry mine (bought by China Molybdenum Co Ltd from Rio Tinto and recent focus of a streaming transaction with Triple Flag);
  • the Cowal epithermal gold deposits (the cornerstone mine for Evolution Mining); and,
  • the Sunrise battery materials complex development project (of CleanTeQ).

Despite this region’s long mining history and mineral endowment, there is still excellent potential for further globally significant discoveries and resource growth.

Alkane Resource’s recent gold-copper discovery at its Boda porphyry project is testament to that (including 97 metres at 3.97g/t gold and 1.52% copper from 768 metres), as indeed was Kincora’s first hole at our Trundle porphyry project (51 metres at 1.17g/t gold and 0.54% copper from only 39 metres). Brownfield exploration at Northparkes and Cowal has also significantly expanded resources and reserves, mine life and support ongoing expansion activities.

Within the region relatively limited exploration and deeper drilling has taken place. NSW as a State is the second largest gold producer in Australia, despite receiving only a tenth of the exploration expenditure of Western Australia2 and the renaissance in the Victorian goldfields.

There has been significant improvement in modern exploration techniques, new regional datasets and understanding of the mineral systems in the Lachlan Fold Belt, assisting us to capitalise on prior explorer activities and drilling, which often failed to recognize the nature of, and/or systematically test, the exploration target.

Within Kincora’s portfolio we have 4 priority target areas that are being refocussed on from the old thinking, with a willingness to drill to the depths required to test our concepts (both shallow and deep).

  • Trundle - the predominate high-grade copper-gold deposits in the Macquarie Arc and at Northparkes are pipe like, “finger” or “pencil” porphyries that are vertically extensive but horizontally discrete. Despite over 60,000 metres of prior explorer drilling, only 11 holes have previously been drilled to depths and in a manner that might test the potential for such a target at Trundle. This is not withstanding confirmed extensive near surface mineralisation across greater than a 10km2 strike and Trundle being within a brownfield environment to Northparkes. There has only been one prior explorer hole since a very favourable industry leading geophysical survey by HPX (CEO Robert Friedland) that generated 23 new anomalies and further supported vertically extensive porphyry targets extending to depth.
  • Fairholme - despite being 10-20km on strike to the five structurally controlled epithermal deposits that comprised the Cowal mine (targeted mineral endowment of 15Moz gold4), few of the over 62,000 metres of prior exploring drilling has been focused on testing the potential for Fairholme to host near surface epithermal deposits, similar to that at Cowal. Instead prior explorer efforts and drilling has focused on trying to find a deeper “finger” or “pencil” porphyry(s). Since the last exploration at Fairholme resources have increased from 3.4Moz to 9Moz gold at Cowal, with its gold endowment far outshining the copper porphyry potential.
  • Nyngan and Nevertire - despite these two projects being located in potentially the largest intrusive centre of the Macquarie Arc, and near favourable early stage explorer activities, Kincora was able to peg 1,144km2 of tenure over the most prospective undercover sections of the Arc. Since Kincora’s entry there has been a considerable land grab by majors and juniors alike in this region.  

Kincora’s exploration concepts with the Nyngan/Nevertire region and proposed drilling plans have been rewarded by the NSW Government who recently awarded the Company a cooperative funding grant to financially assist drilling two copper-gold porphyry targets at our Nyngan project.

High priority drilling continues at our flagship Trundle project - situated in the same minerals complex as Northparkes (Australia’s second largest porphyry mine). This is the only brownfield porphyry project held by a listed junior in the Macquarie Arc.

Kincora is advancing the understanding of near surface skarn system at Trundle, to understand the potential for a near term open pit development project. Work advancing the Company’s earlier stage licenses and project pipeline across the belt (7 additional licenses) is now accelerating, including Nyngan and Fairholme.

The recent oversubscribed raise was the first step in achieving a listing on the Australian Securities Exchange (“ASX”), which we feel is the natural market given the focus of our exploration activities and location of the team.

In Mongolia, we have been the foremost foreign group pursuing counter-cyclical exploration and expansion opportunities, undertaking an aggressive modern systematic exploration approach, and undertaking new project generation. We have recently gained a mining license for a key portion of our large copper-gold porphyry discovery at the Bronze Fox project. We are reviewing ways to involve partners in taking Bronze Fox and the Mongolian portfolio forward.

In all aspects of the business, we retain our focus on operating safely with a special focus on being COVID-19-safe, and engaging with stakeholders.

Kincora’s team is persistent and systematically working hard to confirm the next globally significant porphyry discovery and maximise significant value for our shareholders. We look forward to providing further progress updates.

Sincerely,

Sam Spring                                       Cameron McRae
President & CEO                              Chairman
Kincora Copper Ltd.

1 Bespoke Mar’20 request by Richard Schodde from MinEx Consulting for Kincora Copper.

2 “The Assay” video interview Apri’20 with Richard Schodde and John Holliday - available at https://www.theassay.com/the-assay-tv/the-assay-tv-richard-schodde-john-holliday-kincora-copper/?dm_t=0,0,0,0,0

3 RIU Resurgence Conference, September 15th 2020, Dr Chris Yeats - Executive Director Geological Survey of NSW

4 Evolution Mining Investor Webinar, September 2020


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