Kincora Copper Pivots to Project Generator Model to Drive Exploration

• Kincora Copper has adopted a project generator model, securing six asset-level deals that potentially unlock over $110 million in partner funding for exploration.
• The company has a partnership with AngloGold Ashanti, which includes a 100-kilometer strike with potential $100 million earn-in, with active exploration underway.
• Kincora aims to have $10 million in annual partner-funded exploration, with a 10% management fee covering G&A costs while creating shareholder value through minimal dilution.
• The company's portfolio includes 14 projects, with a focus on porphyry exploration in New South Wales, Australia, targeting undercover extensions of the Macquarie Arc.
• Despite challenging market conditions, the company has expanded its project portfolio and secured partnerships with entities like AngloGold Ashanti, Fleet Space, and Earth AI.

Sam Spring, President and CEO of Kincora Copper, outlined the company's strategic pivot to a project generator model, which has already resulted in six asset-level deals potentially unlocking over $110 million in partner funding. The company is actively exploring multiple projects, with 7,000 meters of partner-funded drilling completed in the last quarter of the previous year and more drilling currently underway.

The Project Generator Strategy

Kincora Copper has embraced a project generator model in response to the challenging capital market conditions that have made exploration funding expensive and difficult to secure. Rather than diluting shareholders through frequent capital raises, the company is bringing in partners at the asset level to fund exploration while maintaining significant upside exposure.

"We've gone to this project generator model looking to get asset-level partners in, have dilution at the project level, try and make this a really scalable business where otherwise we'd have to be cutting things back if you were to be funding this at the listed company level.”

The core objective is to manage approximately $10 million in annual partner-funded exploration budgets, earning a management fee of around 10%. This would generate approximately $1 million in cash income annually to cover general and administrative expenses, creating a self-sustaining business model without regular dilutive financings.

Spring emphasized the benefits of this approach: 

"What we really want to try and achieve is have $10 million of annual budget that we're managing for partners, getting circa 10% management fee, a million dollars worth of cash from income that covers G&A, trying to have a diversified portfolio of not just AngloGold but a number of other major mid-tiers."

AngloGold Ashanti Partnership

The most significant partnership Kincora has secured is with AngloGold Ashanti. The company recently announced an expansion of this relationship, which now consolidates a 100-kilometer strike with up to $100 million in potential earn-in funding from AngloGold Ashanti. Active drilling is currently underway, with the 12th hole being drilled under this partnership.

The relationship is described as a genuine collaboration rather than a simple funding arrangement. 

"It's a real partnership and collaboration. We had them out in the field two weeks ago looking at the core. Last week we had our quarterly JV meeting to talk about results, budgets, make sure we're on the same plan." 

AngloGold Ashanti brings significant technical expertise and resources to the table, suggesting new approaches such as ground gravity surveys that have yielded numerous new targets. This knowledge-sharing extends the value of the partnership beyond mere funding.

Diverse Portfolio & Partner Network

While AngloGold Ashanti is a key partner, Kincora has strategically developed relationships with various entities to advance its 14-project portfolio. These include:

• Fleet Space: A technology partner that conducted ambient noise tomography (ANT) and ground gravity surveys at the Nyngan project. This partnership later expanded to the Wongarbon project.
• Earth AI: A private AI and machine learning group that has drilled five holes to date at the Cundumbul project and is currently conducting geophysical surveys. Uniquely, Earth AI is earning into an NSR royalty only if they make a discovery, rather than taking a direct project stake.
• OB1: A partner for Kincora's Mongolian assets.

The diversity of partnerships is intentional, allowing Kincora to apply different technologies and approaches across its portfolio while maintaining focus on its core strategy.

"These are the sort of innovative deals that we're doing across the portfolio because having 14 projects just sitting there isn't adding value to shareholders. We want to be systematically advancing them.”

Interview with President & CEO, Sam Spring

Advanced Projects & Selective Deal-Making

While Kincora has secured partners for several early-stage projects, the company is being more selective with its advanced assets. Projects like Trundle, Fairholme, and Jemalong, which are located in existing mineral systems proximal to world-class mines, are being held for potentially more favorable deals.

Spring explained the approach: 

"Say for example our Trundle project, we've invested over $10 million worth of our own shareholders' capital that we've raised at the listed company level. We're not going to go out there and do a cheap deal for Trundle. We know it's got existing large mineral systems."

This strategic patience demonstrates a balance in the project generator model – securing funding for early-stage assets while preserving the most advanced and potentially valuable projects for deals that maximize shareholder returns.

New South Wales Focus: The Macquarie Arc

Kincora's primary focus is on the Macquarie Arc in New South Wales, Australia – a region that hosts significant porphyry copper-gold deposits. The company is particularly interested in the undercover northern extensions of this geological formation.

"What we're looking for in this northern part of the Junee-Narromine belt where we've got this relationship with AngloGold Ashanti is effectively a new district. To put it into perspective, it's the undercover extension of the Macquarie Arc where you've got 160 million ounce gold equivalent to the south."

The CEO positioned the exploration opportunity favorably compared to higher-risk jurisdictions:

"The strike that we've got there is twice the size, to put it into perspective, of the Vicuña district. And Vicuña is obviously this new emerging region at 4,000-5,000 meters altitude on the border of Argentina and Chile. If you're one of these majors, would you prefer to be exploring at that height in that jurisdiction or central western New South Wales undercover?"

Market Challenges & Shareholder Value

Despite the strategic progress, Kincora's share price has faced pressure. Spring acknowledged this concern and attributed part of the challenge to a significant shareholder that has been selling down its position.

"One of the obvious elephants in the room is, 'Okay Sam, you did this deal last year in May with AngloGold Ashanti, you were trading six, six and a half. Why are you today down in the twos?' We have had a major shareholder offload a significant amount of shares in the market. There's significant shareholder notices out there. We're working through that."

The company views its current market capitalization (under $10 million) as significantly undervalued given the portfolio, partnerships, and potential. Spring referenced Amarc Resources as a comparable company with a similar model that has achieved a market capitalization exceeding $130 million.

Future Catalysts & Outlook

Looking ahead, Kincora has multiple potential catalysts that could drive value creation:

• Ongoing drilling results from the AngloGold Ashanti-funded programs at Nyngan, where the 12th hole is currently being drilled.
• New exploration initiatives at Nevertire South, described as "the best geological target in the covered extensions and the southern Gobi."
• Results from Earth AI's geophysical surveys and potential follow-up drilling.
• Fleet Space activities at the Wongarbon project.
• Seasonal drilling in Mongolia with partner OB1.
• Potential new partnerships for advanced projects like Trundle, Fairholme, and Jemalong.

Spring emphasized that securing additional partnerships to reach the $10 million annual partner-funded exploration target would be a significant value catalyst independent of exploration success.

The Investment Thesis for Kincora Copper

• Capital Preservation: Project generator model minimizes dilution by securing partner funding at the asset level rather than the corporate level
• Sustainable Business Structure: Goal of $10M annual partner-funded exploration with 10% management fee to cover G&A costs
• Quality Partners: Partnerships with major companies like AngloGold Ashanti provide technical expertise and significant funding commitments
• Diverse Project Portfolio: 14 projects at various stages provide multiple opportunities for discovery and value creation
• Proven Jurisdiction: Focus on New South Wales, which has seen $16B in M&A activity and hosts multiple world-class porphyry deposits
• Infrastructure Advantage: Year-round exploration possible in central western NSW with excellent infrastructure, unlike seasonal constraints in other jurisdictions
• Discovery Leverage: Significant upside potential if exploration efforts identify a major new district or deposit
• Overhang Clearing: Resolution of selling pressure from major shareholder could provide near-term share price catalyst
• Multiple Value Catalysts: Six potential sources of news flow from active exploration programs and potential new partnership agreements

The Copper-Gold Porphyry Exploration Thematic

The global demand for copper continues to accelerate, driven by electrification, renewable energy infrastructure, and the energy transition. Gold, meanwhile, maintains its status as a monetary metal and inflation hedge. Porphyry deposits, which can host both metals in economically significant quantities, represent some of the world's largest mines with decades-long production profiles.

Major mining companies are increasingly looking to secure future supply through exploration, as declining grades and reserve depletion at existing operations threaten future production. However, after years of underinvestment in greenfield exploration during the 2013-2015 period, many majors no longer maintain the extensive in-house exploration teams they once did.

This has created an opportunity for juniors with quality projects and technical expertise to secure partnership funding. The Macquarie Arc in New South Wales has emerged as a particularly attractive hunting ground, having already produced world-class operations like Cadia (Newcrest/Newmont) and Northparks (CMOC). 

With many of the outcropping portions of this geological belt already explored, the undercover extensions offer the next frontier for major discoveries – substantial prizes that could support the global supply of critical metals far into the future.