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Tuesday, 30 October 2012
Kincora Copper’s more aggressive exploration is ‘very positive step’ – broker
Mongolia-focused Kincora Copper (CVE:KCC) is taking a “very positive step” by using more aggressive geophysical tools, according to broker Ocean Equities.
The broker says this will help the Vancouver-based company target deep copper porphyries.
“There is only so much information that can be gleaned from surface exploration, and ad hoc drilling in areas of suspected deep mineralisation can be an ineffective way of finding economic ore bodies,” said analyst Christopher Welch.
“These deeper sensing geophysical tools are now well advanced and cheaper to employ and should allow Kincora to better tune its exploration efforts in the area.”
The analyst added that Kincora’s Bronze Fox project “clearly warrants” more drilling following the “encouraging results” earlier this year.
While it has yet to produce a company-making drill intercept, Welch says broad mineralisation zones of up to 1,000m intervals seen in the earlier drill core suggest there is a large copper system at Bronze Fox.
He said that Kincora will also start assessing the potential to develop an oxide copper project at Bronze Fox, which is a slight change of tack for the company.
Associated near-surface copper mineralisation could potentially support small-scale standalone copper mines.
Welch says this could provide essential cash flow during continued exploration of the copper porphyry targets that would reduce Kincora’s dependence on the capital markets to develop its flagship asset.
“Moreover, successful construction of a copper mine in Mongolia would prove Kincora’s abilities to build a mine and positive cash flow from an open pit project would differentiate the Company from a peer group of other juniors exploring for copper in Mongolia,” the analyst added.
This comes after the company revealed it plans to raise C$6 mln through a private placing to continue drilling and exploration at Bronze Fox, as well as for working capital.