Kincora Copper Ltd (CVE:KCC) is putting its project generation strategy to work, as it revealed it had struck an earn-in deal worth up to over US$6 million for the Badrakh copper gold project in the Southern Gobi, Mongolia.
The deal is with private firm Temuulen Orshih LLC and is to earn up to 80% in stages of the asset, which is a former high priority exploration project of Ivanhoe Mines.
Kincora is aiming to sink two drill holes this field season to test potential for a preserved large-scale porphyry under a near surface cap.
READ: Kincora Copper has the projects, management and financing to realize its Tier 1 discovery aims in Mongolia
"The agreement for Badrakh provides a path to control alongside a well credentialed vendor and partner, for a priority drill ready project underpinned by large scale porphyry targets which are favourably located to existing infrastructure and on the doorstep to China," noted Sam Spring, Kincora's chief executive and president.
He said Badrakh drilling would be funded from the group's project generation budget and would follow first phase activities finishing at the East Tsagaan Suvarga project.
"An update for exploration activities at the company's existing Bronze Fox and East Tsagaan Suvarga projects is expected shortly," added Spring.
Badrakh spans 9,912 hectares (Ha) and lies 550 km from the capital of Ulaanbaatar but only 80 km from Zamyn-Uud and the rail border crossing with the People's Republic of China.
Ivanhoe Mines Mongolian divested the project during the negotiation of the investment agreement that supported the development of Oyu Tolgoi.
Mr Munkhbat Ania, a former senior vice president of Ivanhoe Mines Mongolia and Oyu Tolgoi LLC, will remain an advisor to the Badrakh project.
Field-work, induced polarization (IP) has been undertaken by the vendor this season, which underpinned a maiden shallow two-hole drilling program, which was carried out, hitting a leached supergene cap.
Subject to final due diligence and permitting, Kincora now proposes to complete two deeper holes.
Kincora must spend US$250,000 by June 30, next year to hold an option to earn-in to the project and then will spend up to US$2 million within two years to earn 51%.
To get to 80%, it must spend up to US$4 million within three years, with ownership increments of 14.5% for every US$2 million in funding.
Shares slipped 12.5% to C$0.070 in Toronto.
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