Corporate Strategy

18th March 2020

Dear shareholders,

At Kincora Copper, our focus is world-class copper-gold porphyry discoveries.

We are well aware that exploration and making discoveries is not easy. However, certain locations, exploration techniques and teams have reoccurring successes. We realize persistence is key, and the prizes we seek are large, particularly for porphyries.

Three key principals and competitive advantages therefore underpin our strategy: Location, Team and Targets.

Our Locations

Kincora has a track record of securing strategically located district scale landholdings in established, world-class belts, that offer the potential for new major discoveries.

Our team looks to systematically and cost effectively build and quickly advance the project pipeline towards target testing drilling; the maximum inflection point in the exploration to mining value curve. There is no greater prize or uplift boost to shareholder value in our industry than the discovery of a new world-class copper-gold porphyry.  

In Mongolia, we have been the foremost foreign group pursuing counter-cyclical exploration and expansion opportunities, including building the dominant land position in the Southern Gobi copper belt.

We have been the most active explorer with the goal to make the next major discovery in this belt. We have undertaken modern systematic exploration, using key players involved in the last district scale programs (prior to 2010).

Our peak landholding that covered almost 1700km2 across 13 licenses has been reduced to approximately 500km2. Since 2017, we have drilled six different licenses, systematically worked and dropped ground, and defined a major low-grade discovery at the Bronze Fox porphyry project.

In the third quarter of 2019, the Company made the strategic decision to opportunistically pursue entry into the Macquarie Arc, in Central West of New South Wales (NSW), Australia.

This is Australia’s foremost porphyry belt, home to the giant Cadia mine and the Northparkes mine. Both are currently undertaking significant expansions and demonstrating the geological potential of this region. The region has subsequently yielded new and exciting discoveries and become a focus for corporate and fund-raising activities. Between September 2019 and March 2020, over A$80 million has been raised to predominately fund exploration activities of eight explorers active in the region. Over this period, the market capitalization of this peer group increased 3.2x before the impact of COVID-19, is still an increase of 1.7x at the time of writing, with exploration tenure under coverage up over 20%.

The Macquarie Arc, the most prospective section of the wider Lachlan Fold Belt, is synergistic in line with Kincora’s core focus. It offers: the same scale of target (world-class); the same commodity mix (copper-gold or gold-copper); the same mineralized setting (porphyry &/or epithermal gold); supports a similar systematic exploration approach/exploration methods; and, is a region where the team has had significant exploration success.

Our Team

Our technical committee has an exceptional track record of multiple world-class copper discoveries. The team has unique knowledge of the belts we operate in, with the oversight and active contribution of a very experienced and highly credentialed board – there are no passengers.

Chairman of the Technical Committee and non-executive director John Holiday was the principal discoverer/site manager for the Cadia Tier 1 gold-copper porphyry and Marsden copper-gold porphyry in the Macquarie Arc. John remains based in the region.

Our Senior VP of Exploration, Peter Leaman, led the last district scale program in the Southern Gobi when with BHP. Peter is credited with the world-class Reko Diq Cu/Au discovery, amongst other international discoveries including Crater Mountain Au/Ag and Mt. Bini (Kodu) Cu/Au.

The board and senior leadership team has “skin in the game” equity ownership, with strong continuity and belief in Kincora’s ultimate success.

Our Targets

Kincora is shortly commencing drilling at the only genuine brownfield project (Trundle) held by a listed junior in Australia’s foremost porphyry belt, and with district scale pipeline in this belt.

The Trundle project is our top priority. It sits within the same system as Australia’s second largest porphyry mine (Northparkes) which demonstrated similar and extensive mineralisation. Phase 1 drilling will test three interpreted large finger porphyry systems, noting 5 deposits at Northparkes.

In five short months, the Company has developed a controlling interest in eight licenses in the Macquarie Arc, covering a total of 1,732km2.

All licences have confirmed strategic appeal, following significant asset level investment from industry partners, as further evidenced by a major recently picking up ground adjacent to three of our licenses.

In Mongolia, a mining license conversion is set to be submitted for the Bronze Fox project.

Overall

The Company has a low cash overhead cost structure, and has a board/management who are aligned as shareholders. 

We enjoy strong backing from a sophisticated and consolidated shareholder register – and will continue to keep our shareholders informed of our strategy, intentions and progress.

Kincora’s team is persistent and working hard to make the next globally significant porphyry discovery, as well as create significant value for our shareholders. We look forward to providing further progress updates.

Sincerely,

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

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Archived: 2019 Corporate Strategy

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