Transcription of The Stock Network Interview with Kincora Copper (ASX: KCC) President and CEO, Sam Spring
Lel Smits: Sam, welcome to the Stock Network. Thank you for having us. Now the company has pivoted its funding model to a prospector or project generator model for your portfolio of offering projects. Can you explain what the reason is for this, how the model works and also the potential benefits that it delivers for shareholders?
Sam Spring: What we’re trying to do with this pivot model is align our funding with the scale of the projects. We’ve got a big portfolio of projects, they’re all very large projects and the cost of capital for exploration at the moment is pretty expensive.
So what we’re trying to find is the right technical partners to come in on a project by project basis, look to de-risk those projects by providing technical endorsement and due diligence that helps investors understand the technical merits of these projects and come in alongside those shareholders as partners, funding those at the asset level, meaning that dilutions are minimised at the listed company level with the extra benefit of providing an income stream.
We’re looking for project management fees that then can offset our corporate costs and ultimately achieve a funding model where we’re self-funding, not coming back to shareholders every six, 18 months.
Lel Smits: Excellent. Now Kincora has already secured six partner agreements through the project generator model with other potential deals in New South Wales under negotiation.
Can you tell us about the prospectivity of your copper gold projects in New South Wales?
Sam Spring: Well this is Australia’s leading porphyry belt. We’ve got 160 million ounce gold equivalent resource, you’ve had over 16 billion of M&A for the producing assets, you’ve had over 365 million of recent earn-in deals by the majors with juniors. What we’re looking for here is largest, tier one scale projects that would appeal to the diversified majors, the copper majors and the gold majors and this portfolio we’ve been able to pull together over a number of years are in the key parts of the belt and the assets that we’re looking to find partners for now are really our flagship larger scale projects. So we’re really excited by the ability to ramp up this business model by doing further deals.
Lel Smits: Excellent and while you’re talking about the ramp up, looking further at it, in April you announced a new deal with major global mining company Anglo Gold Ashanti which takes the potential partner funding for exploration works across the projects to more than $110 million. Can we now expect to see the ramp up that you’ve just outlined into exploration drilling?
Sam Spring: No absolutely, for a period of 12 to 18 months we didn’t drill. The fourth quarter last year that changed as those deals started to kick in, we had over $3.5 million of partner funding over 7,000m of drilling resume in the last quarter last year. That’s now ramping up, the management fees are ramping up. We’re on hole 14 with our Anglo Gold Ashanti earn-in and JV.
We’ve got Earth AI exploring in our Cundumbul project. We’ve got our partners in Mongolia advancing that project portfolio with fieldwork ongoing. So that news flow from drilling and exploration activities and management fees ramping up is something that you’ve got in the pipeline after a period of a while and we’ve still got that further upside of expecting further deals to be announced for our larger scale projects.
Lel Smits: Excellent, well thank you Sam for the update. Look forward to seeing those developments from Kincora Copper and the announcements to come.
Sam Spring: Thank you for the opportunity.
Ends