Kincora Copper Ltd (CVE:KCC) is to raise C$6mln through a non-brokered private placement of units at 33 cents a pop.
Each unit will comprise one common share and one-half of a share purchase warrant. Each half-share warrant, when paired with another, will entitle the holder to purchase a Kincora common shares at a cost of 44.5 cents.
Those taking up the shares include one of the largest mining private equity specialist funds, which has agreed to pump C$1.5mln into the company, making it a cornerstone investor in the copper explorer, which is valued at C$13.9mln.
“I am delighted that we have attracted a lead order from such an industry group, with it's due diligence process providing validation of our exciting dual exploration and expansion strategy, with strong support also from insiders, many existing and new shareholders,” said Sam Spring, president and chief executive officer of Mongolia-focused Kincora.
Funds from the share issue will finance drill testing and reconnaissance in the Southern Gobi Devonian copper gold belt.
Funds from the share issue will fund the first modern systematic Tier 1 drill testing and district scale reconnaissance exploration program in the under-explored Southern Gobi Devonian copper gold belt.
This provides for an extensive two-phase drilling program at the East TS and Bayan Tal targets, which are the first new Devonian targets since Oyu Tolgoi, Kincora said.
READ Kincora's new Mongolia licence on trend with Oyu Tolgoi
The cash raised will also allow Kincora to develop its earlier stage pipeline prospects, and to undertake opportunistic and counter-cyclical expansion activities benefiting from its proprietary knowledge of the copper belt.
The company also noted in its stock market announcement that mining heavyweight Rio Tinto has resumed regional drilling for the first time in five years at a target next door to Kincora’s Red Well licence.
Rio Tinto also plans to drill other new ground they have secured on the Devonian trend towards Kincora’s Bayan Tal target.
“Such news is a positive validation of Mongolia as a jurisdiction and the potential of other major discoveries in this belt where we hold a dominant 1437 km2 landholding," Spring said.