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Kincora Copper to be debt free after fund-raising

Last updated: 08:41 02 Jun 2016 EDT, First published: 03:41 02 Jun 2016 EDT

Canadian dollars
The new shares are being issued at 37.5 cents each (after a 1-for-10 consolidation).

Kincora Copper Ltd (CVE:KCC) is set to get an influx of funds from shareholders, including its largest shareholder, Origo Partners PLC (LON:OPP).

The company is proposing, after a 1-for-10 share capital consolidation, to raise up to C$2mln by issuing 5.33mln shares at 37.5 cents a throw.

The share capital consolidation, which will see the number of shares in issue reduce by nine-tenths (ahead of the latest issue of shares), is all part of the process to pave the way for the merger of two Kincora subsidiaries, Ibex Land Mongolia and Ibex Mongolia,

On top of that, Origo is to convert an outstanding C$2mln loan note into equity, also on the basis of 37.5 cents a share.

The inflow of funds will clear Kincora's balance sheet of debt. Funds raised from the share issue will be used to advance the company's exploration and consolidation strategy in the Southern Gobi copper-gold belt.

"Concurrent with the Ibex merger, having received commitment from our largest shareholder Origo to convert the convertible note outstanding into equity alongside and on the same terms of the proposed non-brokered price placement, Kincora is pleased to announce an offering open to all existing shareholders in qualifying jurisdictions and new groups.,” said Sam Spring, president and chief executive of Kincora.

“The raising is being supported by key insiders and will result in a restructured and recapitalized Kincora, creating a favourable corporate platform to support our proposed consolidation and exploration strategy in a belt that supports the potential for the next globally significant copper-gold discoveries, at a favourable point of the Mongolian and global commodity cycles,” he added.

Spring revealed there had already been strong interest from potential investors in the Ibex transaction and Kincora's corporate strategy.

“The transactions will result in a consolidated landholding of over 1,500 square kilometres, the majority of the prospective exploration licences which dominate a key geological trend between and along strike from the Oyu Tolgoi and Tsagaan Suvarga copper mines, supporting an industry-leading proposition of copper-gold and gold targets, Kincora having a debt-free balance sheet and new funding being put to work in the ground," Spring said.

Shares in Origo were trading 2.5p lower in London in lunchtime trading at 0.25p.

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