On May 19th, the company revealed that it had intersected multiple mineralised skarn zones in core from the first of its drill holes into Trundle, at the southern Trundle Park skarn-porphyry target. You don’t need to be a geologist to appreciate the photos in that press release and see some very nice intervals.
Fast forward three weeks and the core from the second hole has now been received and reviewed. Kincora has put out some further visuals and it too is showing significant mineralisation, this time at the Mordialloc porphyry target.
Although the proof will ultimately lie in the assay testing, and it is still early in Kincora’s maiden drill program at Trundle, both holes look very promising.
In particular, it must also be noted that the Mordialloc and Trundle Park targets, and these two first drill holes, are located 8.5km apart and lie within the same mineralized complex as Australia’s second largest porphyry mine at Northparkes.
“While there is a lot of work to do and we are still very early in exploring Trundle, to have potentially the most significant skarn intervals and porphyry intrusion system intervals to date at the project in holes one and two of this program is an excellent start and pretty unique – guess we just have to wait for assay result to confirm.” says Kincora chief executive Sam Spring.
There have previously been 2208 holes drilled across the Trundle project by other groups, so for the first two holes of this campaign to be considered potentially the most successful in the projects’ history testing both the skarn and porphyry potential is very noteworthy.
So what is Kincora doing differentially? In short, drilling deeper.
They are seeking to find the source of the extensive smoke and near surface mineralisation previously returned but not followed up and adequately tested by previous explorers. Their efforts are supported by attractive geological vectors from this previous shallow exploration, lessons learnt in the same mineralised system at Northparkes, industry acceptance of the needed to drill deeper to find the next generation of large copper discoveries in tier 1 jurisdictions (particularly given where the high grade systems are proven to sit within the world-class mines in this belt), coupled with an industry leading technical team and industry leading geophysics which has never been followed up and tested. It appears this combination and bringing new ideas to old ground is already paying off.
As John Holliday, Chairman of Kincora’s Technical Committee, and Peter Leaman, Senior Vice-President of Exploration, commented in this weeks exploration update: “historically at Trundle over 60,000 metres have been drilled, but over 92% of these holes have been within the top 50 metres to surface, a depth that the existing major mines in this belt suggest is just too shallow.”
Holliday and Leaman should know, both being credited with world-class copper discoveries, including John with Cadia, the largest mine in this region and largest porphyry project in Australia. Indeed, John is shortly presenting the Cadia discovery talk – free for those interested to register for (see https://thegeohug.com/june-19th).
As Spring put it when we spoke to him about the significance of the first two holes, “We’re not at the point where the company can start talking about discovery holes, we need to manage expectations there, and assay results are needed to better understand the details of what we have intersected to date, but initial results are highly encouraging. We may not be too far away vectoring to the cores of the systems we have now intersected and there are very few places in the Lachlan Fold Belt, and globally, not held by majors where you can do brownfield exploration.”
These two holes form the first of a six hole, 3,800 metre programme that Kincora is putting into Trundle, and the market will now been keenly watching and awaiting.
Already the interest has been increasing, and the share price responding. Back in March, before the drilling got underway and while uncertainty about the coronavirus was still lingering around the timing of the next round of exploration work, Kincora’s shares were trading at just C$0.03 on the Canadian Venture Exchange.
But once the rigs started turning, interest picked up, and so did the share price, more than doubling to C$0.08 before the first core came out of the ground and then leaping still further after that first news release in mid-May, to a high of C$0.19 and last trading at a very welcome C$0.12 and only C$18 million market capitalisation. That’s a 300% rise in less than three months, and certainly shows that appetite for exploration success in proven jurisdictions is out there.
But why wouldn’t it be? Neighbours on the Macquarie Arc porphyry belt, Alkane Resources (ASX:ALK) added A$400mln to their market capitalisation on the strength of a single hole drilled in a favourable gold market. Also milling around in the area are China Molybdenum, Evolution Mining (ASX:EVN) and the number one Australian gold company Newcrest Mining (ASX:NCM), with exploration plays Sky Metals (ASX.SKY) and Magmatic Resources (ASX.MAG) recently also being well rewarded.
Assay results in the next four to six weeks from the first two holes, and over the upcoming months for the rest of the first phase program, will also help gauge if Kincora might shortly join the larger capitalised exploration success plays with Australian assets pre JORC or NI 43-101 resources – names like:
Legend Mining (ASX:LEG): in Dec’19, announced 14.9m @ 1.07% Ni, 0.75% Cu, 0.06% Co from 114m at its Mawson target – 4x since, A$370m market capitalization.
De Grey (ASX:DEG): in Dec’19, announced 43m @ 3.7g/t Au from 36m at its Hemi target, before in Feb’20 announcing 24m @ 7.5g/t Au from 126m – since 13x, A$615m mkt cap.
Chalice Gold (ASX:CHN): in Mar’20, announced 19m @ 2.59% Ni, 1.04% Cu, 8.37g/t Pd & 1.11% Pt from 48m at its Julimar target – since 8x, A$300m capitalisation.
Greatland Gold (AIM:GGP): Despite being a couple of years in the making, has taken off since Newcrest completed phase 1 of their earn-in (Dec’19, US$10m), and deep step out results from a 6 rig program have continued to be very positive since Dec’19 - 6x since Jan’20, £420m market cap.
Stavely Minerals (ASX:SVY): in Sep’19, announced 32m @ 5.88% Cu, 1g/t Au & 58g/t Ag from 62m and 4.4m @ 3.98% Ni & 0.23% Co from 96.7m within the ultramafic contact fault (UCF), above the previously targeted deeper porphyry. After re-rating >5x and a A$200m market cap, Stavely has a current A$118m market capitalisation.
“In the current market if you hit something big, it’s clear the market’s willing to reward you,” says Spring.
“We’ve got the visuals, they confirm our concepts and a very large and prospective system. Soon we will have the assays out, and they should give some positive numbers, albeit we are still very early into our drilling program. If Trundle is what we think it is, we could be in for some exciting times.”
So the news-flow should be coming thick and fast from Kincora over the coming months, which will be welcome to investors who had grown used to the stop-start nature of activity on the Mongolian assets. That stop start nature in Mongolia continues at the moment with yet another moratorium on exploration licence issuance, the imminent election, significant lock downs because of the coronavirus and relatively mute foreign investor sentiment towards the jurisdiction.
That said, Xanadu Mines (ASX:XAM) recently partnered up with JOGMEC to develop the Red Mountain project, which isn’t too far away from Kincora’s Bronze Fox property. As it stands, Kincora’s currently applying for a mining licence for Bronze Fox, and once that security of tenure is attained its attractiveness as a destination for a partner like JOGMEC could also similarly bring in a pretty attractive deal.
But for now, all eyes are on Trundle where the mineralisation is coming thick and fast. Kincora also needs to outline its plans for the rest of its 1700km2/6 project portfolio in the Macquarie Arc.
In my last April 22nd coverage I speculated “based on peer group valuations of other exploration juniors active in the region and the conviction the Kincora team has for these targets the company could be a “multi-bagger” for shareholders from current levels”.
It would appear that there still remains strong potential for a “multi-bagger” return from current levels if near term assay results support Kincora transitioning into the larger capitalised exploration success plays with Australian assets pre JORC or NI 43-101 resources. It would appear the first two holes have only increased the Kincora team’s conviction for that.
Again, watch this space.