Kincora Copper (CVE:KCC) said Thursday that it has agreed to acquire 100 percent of Golden Grouse, a subsidiary of Temujin Mining Corp. Golden Grouse is a Mongolian company that holds mineral exploration licenses 15075X and 15076X, which adjoin Kincora's Bronze Fox project in Mongolia.
The agreement follows the letter of intent announced in January, with amended terms.
Under the amended terms, Temujin, a portfolio company of investment vehicle Aberdeen International
and a member of the Forbes & Manhattan Group of Companies, will be
issued 20 million shares in Kincora once the deal is completed, which
represents a 12.6 percent equity stake.
Upon the discovery, within four years of closing of the transaction,
of a minimum of one million ounces of inferred gold resources within the
properties acquired, Kincora will issue an additional 15 million shares
Kincora also plans to spend $2 million on the exploration of the assets over the next two years.
In addition, Forbes & Manhattan will not appoint a nominee to
Kincora's board, and there will be no service agreement going forward,
as originally disclosed in January.
The intended private placement also announced earlier this year will
as well not be proceeding, but Kincora said it does still plan to pursue
an equity financing in the near future.
"The acquisition of the properties is a great addition to the Bronze
Fox project," said Kincora president and CEO, Igor Kovarsky.
"We now hold two of Ivanhoe's former high priority target properties
in Mongolia, the Bronze Fox and Tourmaline Hills. Kincora now holds one
of the largest land holdings along the highly prospective copper belt
hosting Oyu Tolgoi.
"Tourmaline Hills is a mid-stage exploration license with a number of
significant gold targets. This places Kincora in a strong position to
identify a significant copper-gold and gold deposit this year."
Closing of the transaction remains subject to the execution of a
definitive agreement, and the receipt of all necessary regulatory
approvals, including that of the TSX Venture Exchange.
Separately, Kincora said Thursday that Altai Khangai has resigned
from the board of directors due to other business demands, but will
continue as a special advisor to the company.
Earlier this month, Kincora announced updated exploration results for
last year's drilling program and details of its 2012 drilling campaign
for the Bronze Fox project in Mongolia
The company said that results from its 2011 exploration campaign
continued to demonstrate the significant potential of the Bronze Fox
project. Encouraged by the extent of mineralization within the license
area, the 2012 exploration campaign will continue to define the resource
potential, Kincora said.
Among the highlights, in West Kasulu, hole F27 intersected some small
intervals of over 1 gram per tonne (g/t) of gold (up to 2.48 g/t gold)
and also 30-40 metres of copper mineralization including 37 metres from
139 metres at an average 0.4% copper equivalent, with up to 3.03% copper
and 1.66 g/t gold.
Kincora's 2012 diamond drilling campaign will begin in March with a total of 16,000 metres planned.
Bronze Fox is in the same geological neighbourhood as the giant Oyu
Tolgoi mine, just over 100 miles to the north-east. Oyu Tolgoi is the
world’s largest undeveloped copper deposit, which also contains an
estimated 46 million ounces of gold.