Junior explorer Kincora Copper (ASX:KCC) has signed a conditional agreement to acquire RareX’s (ASX:REE) 35% interest in the Trundle, Fairholme, Jemalong, Cundumbul, and Condobolin projects in New South Wales.
Under the agreement, Kincora, which has an $11.16 million market capitalisation, will issue 40 million chess depositary interests (CDIs) and will grant RareX a 1% net smelter royalty (NSR) for the vended licences.
As part of the acquisition, Kincora has received firm commitments from professional and sophisticated investors for a placement to raise $2 million through the issue of the new CDIs at $0.05 per share.
This price represents a 25.4% and 21% discount to the company’s last closing price and 15-day volume weighted average price (VWAP), respectively, prior to the company’s CDIs being placed in a trading halt on 27 July 2023.
The company says the brokered placement was oversubscribed and includes a 1-for-2 free-attaching option exercisable at $0.075 within 24 months.
Kincora reports the share consideration due to RareX for the New South Wales transaction is subject to shareholder approval, which will be sought at an annual general meeting (AGM) and special meeting slated for September. The deal is also subject to Kincora raising at least $1.5 million through its planned placement — which has been satisfied through the oversubscribed $2 million placement — and both parties obtaining approvals required under the New South Wales Mining Act 1992. Upon completion, Kincora will secure a 100% interest in all its projects in New South Wales.
Kincora reports Big Ben Holdings, the company’s largest shareholder, subscribed for 10.4 million new CDIs and 5.2 million attaching options under the placement. Morgans Corporate and Bridge Street Capital Partners acted as joint lead managers to the placement.
Once the placement is complete, the joint lead managers will be issued 7.5 million unquoted options at $0.075 each expiring in 24 months and will also be paid a cash fee.
Concurrent with the transaction, Kincora also reports it has invited RareX Chair and founder Jeremy Robinson to join its board as a Non-Executive Director and member of its Remuneration Committee.
Commenting on the transaction, Kincora Copper President and Chief Executive Officer (CEO) Sam Spring and Chair Cameron McRae say: “These transactions significantly increase the strategic value of, and funding options for, our NSW project portfolio and strengthen Kincora’s balance sheet.
Kincora will hold 100% ownership in 8 projects, covering 2,367km-square in highly prospective settings within world-class gold-copper mineral belts in a tier-one jurisdiction.
“the company is in a strong position to both extend high-priority drilling and accelerate ongoing asset-level partner discussions”
Coupled with the oversubscribed $2 million raising, the company is in a strong position to both extend high-priority drilling and accelerate ongoing asset-level partner discussions at a time where we are seeing very significant corporate activity in our district.
We are very pleased to welcome experienced resource director and executive Jeremy Robinson to Kincora’s board and a number of new professional investors to the register.”
Also commenting, RareX Chairman and founder Jeremy Robinson says RareX is a ‘big believer’ in Kincora’s portfolio in New South Wales, as evidenced by the company becoming a ‘significant’ shareholder and converting its asset-level interests.
“We expect these transactions to be a real catalyst to accelerate ongoing asset-level partner discussions and also be a positive share price catalyst in the immediate to longer term. I am personally very pleased to assist at the board level and support Kincora’s endeavour to become a significant copper-gold player.”
Kincora Copper is an ASX-listed copper explorer that wields a portfolio of assets in Australia and Mongolia. These assets include the Trundle, Fairholme, Jemalong, Cundumbul, and Condobolin projects in New South Wales and the Bronze Fox Project in Mongolia.
Write to Harry Mulholland at Mining.com.au
Images: Kincora Copper