Kincora Copper (ASX:KCC) has executed an Exploration Alliance Agreement with privately held vertically integrated metals exploration company Earth AI covering the Cundumbul porphyry project.
The company reports that the success-based alliance seeks to leverage Earth AI’s vertically integrated, proprietary artificial intelligence and machine learning capacity to generate and drill test targets at Cundumbul, located in the central Molong volcanic belt of the Macquarie Arc in Central West New South Wales.
The Exploration Alliance allows for a co-funding model and joint technical committee, whereby Earth AI will have day-to-day management and control of exploration activities, and contribute up to $4.5 million of the total exploration expenditure across the project over a 2-year period with an option to extend for a further year.
Subject to a minimum of 1500m of diamond drilling and a qualifying drilling intersection resulting in a new discovery (as defined within the Exploration Alliance Agreement), Earth AI is entitled to a net smelter return royalty of up to 3% in connection with a to be agreed upon area surrounding the discovery.
Kincora is under no obligation to explore, develop or mine the Cundumbul project during the period of the Exploration Alliance.
However, upon Earth AI successfully drilling a qualifying drilling intersection and having carried out a minimum of 1,500m of diamond drilling, whereafter the second anniversary of the royalty trigger date if no mineral resource has been defined and the annual exploration expenditure in the area of interest falls below US$250,000, Earth AI will have the option to assume operational control and buy all of the royalty tenements that overlap with the area of interest under the royalty deed, for US$1 million cash plus a 2% net smelter.
The agreement will not affect the capital structure of the Company or current ownership in the project, with Kincora and RareX (REE:ASX) retaining the existing 65% and 35% respective interests in the Cundumbul project/license. Rights of first refusal customary for such an ownership and exploration alliance
An initial reconnaissance field trip is planned over the summer to assist refine drill targets.
Cundumbul is located in the ‘world-class’ Molong belt of the Macquarie Arc, 30km south of Boda (>10Moz Au-Eq discovery) and 70km north of Cadia (>90Moz Au-Eq endowment), with previous surface exploration and limited drilling confirming porphyry potential Melbourne, Australia.
Addressing the agreement, Kincora CEO Sam Spring commented: “The Exploration Alliance with Earth AI seeks to accelerate target generation and drill testing at the Cundumbul project. The project is strategically located in Australia’s foremost porphyry region.
Previous surface exploration and limited drilling has confirmed fertile intrusive porphyry systems in both the north and south of the project, located over 10km apart.
“Boots on the ground reconnaissance is expected over the summer to assist advance and refine the drill targeting process”
Earth AI has applied its proprietary cloud-based AI and machine learning technology resulting in priority targets identified for field checking. Boots on the ground reconnaissance is expected over the summer to assist advance and refine the drill targeting process.
The agreement with Earth AI is consistent with Kincora’s exploration strategy to systematically advance, apply industry leading geoscience and drill test our strategically located and district scale project portfolio in the Lachlan Fold Belt.”
Earth AI is a San Francisco headquartered Artificial Intelligence (AI) company that has a vertically integrated metals exploration approach to targeting, testing and verifying discoveries that are required for the electric vehicle and renewable energy revolutions.
The Cundumbul project is approximately 30km south of Alkane’s Boda-Kaiser porphyry project (maiden Boda resource >10Moz Au-Eq and maiden Kaiser resource scheduled 1Q 2023), 25km north of Copper Hill (>3Moz Au-Eq resource) and 70km north of Cadia (>90Moz Au-Eq endowment).
Exploration efforts at the Cundumbul project were last lead by Mitsubishi Materials Corporation during an earn-in period (concluded 2015).
Previous exploration has included mapping, soil sampling, rock chip sampling, induced polarisation (IP), gravity and magnetic geophysical surveying, with more limited follow up auger, RC and diamond drilling.
Mineralised monzonitic intrusions have been identified at both the Bells and Andrews prospects, in the north and south respectively of the Cundumbul project, located over 10km apart.
More recent exploration by Sultan Resources at multiple common prospect mineral systems adjacent to the projects license boundary have returned extensive hydrothermal alteration, anomalous copper and gold, and further confirmed porphyry potential.
Write to Adam Orlando at Mining.com.au
Images: Kincora Copper Ltd