Transcription of The Stock Network Interview with Kincora Copper (ASX:KCC) President and CEO, Sam Spring
Lel Smits: Kincora Copper has announced a non-brokered private placement cornerstoned by leading North American natural resource sector investors including Rick Rule and Jeff Phillips. The placement raises up to $4 million Canadian dollars or around $4.6 million Australian dollars with a lock-up period on the stock for a full 12 months and received strong support from existing and new investors. With this raising, Kincora is executing a hybrid project generation strategy and to learn more about how the company plans to deploy funds for growth, I’m joined by Kincora Copper President and CEO Sam Spring. Sam, welcome back to the Stock Network.
Sam Spring: Thanks Lel for having us on.
Lel Smits: Now, Kincora has just secured cornerstone investments and announced a private placement.
Sam Spring: What is the significance of Rick Rule and Jeff Phillips backing you and what do you think they like about the company and its growth strategy? Yeah, this is a fantastic deal for Kincora shareholders. It really provides endorsement for the business model and there’s a really unique financing structure that comes along with this. I guess what do these investors look like? Well, Rick’s probably a leading figure in project prospector generators.
He’s recognised the business model. He sees the amount of capital that’s being spent by third-party asset-level partners and looking at our relative market looks pretty attractive. So coming on the register and really with Jeff as well, quarterbacking our North American strategy, we’re looking to get out and really push this business model and also be able to resume Kincora funded drilling at our Condoblin project as well.
Lel Smits: Fantastic. Now, looking closer at the placement, the raising structure is very unique coupled with a significant rollback in share structure. Can you provide some insight for why Kincora and lead investors really sought this kind of unique deal structure?
Sam Spring: Yeah, and I think it comes back to what’s the valuation of the company and what do, I guess, the investors in this offering think the value could or should be? And I guess we traded a significant discount to a lot of our peers out there and by having this really sort of tight capital market strategy and really tight financing with good shareholders in there, we’re providing the right runway to see the equity really re-rate hard.
It’s not often that you see a 12-month lock-up period in an offering, and that’s a voluntary one for the investors coming in. That’s what we’ve got. There’s an accelerator on the warrants to call that. Again, it’s about trying to provide the right structure to see the share price re-rate in a multiple way.
Lel Smits: Great. And Sam, Kincora Copper has stated proceeds will be used to support ongoing project generation strategy, drilling at your wholly-owned high-grade gold-based metals Condobolin project and also working capital. Can you talk us through your strategy over the coming six months and also what catalysts are coming up?
Sam Spring: Yeah, and it’s really backing the existing strategy that we’ve had in place for the last 12-18 months and we’re starting to deliver on. It’s doing more drilling, doing more deals with third-asset partners and more management fees and ultimately more discovery. This capital provides us the ability to resume drilling at our 100%-owned Condobolin project.
We’ve had so far about 5.5M of partner-funded drilling, over 11,000m of drilling that’s been taken place by our partners. It’s supporting those activities and the further pipeline of asset-level deals that we expect that will come in place in the nearer term as well. So, it’s providing a really strong position for the company as we see these management fees, see further drilling ramp up.
So, for investors, it means that they’re coming into a very well-funded vehicle with a lot of exploration and a lot of further scope for additional deal flow to come as positive share price catalysts.
Lel Smits: Well, Sam, thank you so much for running us through those updates. Congratulations on the investors that have supported Kinkora Copper and look forward to seeing your strategy evolve over the coming months.
Sam Spring: Thank you, Lel.
Ends