Kincora Copper is confident two of its licences that were revoked by the Mongolian government will be returned after a resolution was tabled last month by the Ministry of Mining. The company called the proposed resolution, which still requires parliamentary approval, a win-win outcome for all involved.
Kincora’s two Golden Grouse exploration licences were revoked in November last year along with 104 other licences following a criminal investigation into former government officials accused of illegally issuing the permits. The move forced the company to write off Can$6.95 million from its balance sheet.
The government has, however, proposed to compensate for time lost in a bid to encourage investment to Mongolia once more.
The company’s flagship Bronze Fox project was unaffected by the government’s move.
Company president and chief executive Sam Spring says: “Kincora has been proactively working with the Ministry of Mining to achieve a win-win solution for all stakeholders and I very much believe the key concepts in the resolution put forward to the Mongolian Parliament would achieve that.
“The proposed resolution of the 106 licence issue is probably the most transparent and tangible recent example of the Government of Mongolia, via the Ministry, working with investors to revive private sector activities, learn and move on from past mistakes as well as acknowledging security of tenure.”
He says, “We are confident that the proposed resolution, if approved by Parliament in its current form and in a timely manner, provides a mechanism to enable the recovery and resumption of exploration of Kincora’s Golden Grouse licences as early as the current 2014 field season and potential recognition of the Can$6,952,000 previously written off from our balance sheet relating to these licences being revoked.”
He says the spring session of Mongolia’s Parliament has recently commenced with various measures to increase economic growth and ensure financial stability listed for discussion, approval and implementation. On April 24 during the regular weekly ‘30 minutes with the Prime Minister’ discussion, Premier N Altankhuyag introduced his ‘100 days to strengthen the economy’ project where the first and third items listed for the minerals sector were ‘amending the Law on Minerals and permission to issue exploration licences’ and ‘resolve issues of some licences in dispute’ respectively. “The latter, we believe, relates to the 106 licences. As we understand it a number of items relating to the minerals sectors are expected to be discussed by Parliament.”