–Kincora Copper names ex-Rio Tinto executive John Rickus as president and chief executive
–Company says Bronze Fox project in Mongolia has high-grade copper potential
–Analyst says Origo shares look cheap
LONDON–Natural resources-focused private equity investment firm Origo Partners PLC (OPP.LN) Wednesday said that one of its investment companies, Kincora Copper, has named ex-Rio Tinto executive John Rickus as president and chief executive, while confirming the prospects of a deposit in Mongolia.
Mr. Rickus, who spent 24 years at Rio and is currently head of technical services at Origo, replaces Igor Kovarsky.
Kincora confirmed the potential for a deep, high-grade porphyry style copper deposit at Bronze Fox project in Mongolia with an average copper grade of 0.5%. It also found associated Molybdenum and gold, adding that the mineralization begins from the surface and remains open at depth. Further drilling will test the extent of the mineralization, the company said.
Between April and July, a total of 7,168 meters of core drilling was completed. Kincora said partial cores containing 2,219 samples have been sent to laboratories for assaying with 2,184 results now received and further core cutting and sampling is ongoing.
Brokerage Liberum Capital Ltd. said the drill data, “reinforces the geological model that there are higher grade zones within a massive disseminated copper/gold and associated molybdenum ore body and infers enrichment at depth.”
The brokerage added: “OPP [Origo] currently trades on a 58% discount to our estimated NAV, and whilst the near term outlook is undoubtedly challenging, on a medium term view the shares now look very cheap and today’s announcement from Kincora is undoubtedly a positive development that underlines the potential associated with this investment.”
Liberum estimates that Kincora accounts for 4% of Origo’s net asset value, which at June 30 was $277.7 million, compared with $238.6 million on March 31. Liberum has a “buy” rating on the stock but no target price.
In July, Origo participated in a private placement offering with Kincora subscribing for up to $2.5 million of a three-year convertible note. The proceeds of the placement will be used for the further development of the company’s mineral properties in Mongolia and for general working capital.
In a statement, Chris Rynning, chief executive of Origo said: “Kincora is one of our primary vehicles to carry out our investment strategy and the recent drilling results confirm Kincora’s large potential. Our recent investment in Kincora reinforces our commitment to our Mongolian operations and copper as an investment target.
At 115 GMT, Origo shares were up 0.5 pence, or 3.1% at 16.5 pence, in a slightly lower AIM index, down 0.003%.