Kodiak Copper Advances with Thesis of Large BC Porphyry Potential

• Kodiak Copper is a copper exploration company focused on the MPD copper project in British Columbia.
• They recently completed an 18,500-meter drill program on the property and are still awaiting full results.
• Their strategy is to demonstrate the large size potential at MPD to attract interest from major copper producers.
• They are funded for operations in 2024 with $4M cash and will look to raise more later.

About Kodiak Copper

Kodiak Copper, led by President and CEO Claudia Tornquist, is a copper exploration company operating in southern British Columbia. Their flagship asset is the MPD copper-gold project, which they believe has the potential to be a large-scale porphyry system. After a significant 18,500-meter drill campaign in 2023 across new targets at MPD, Kodiak is still awaiting full assay results but early indications help validate their exploration model. However, like much of the junior mining sector, Kodiak’s share price has struggled to garner the attention it deserves amid a weak market environment. Their strategy is to demonstrate the scale opportunity at MPD through discoveries to attract interest from major producers. With $4 million cash remaining in the treasury, Kodiak is funded for early operations through 2024.

Interview with President & CEO, Claudia Tornquist

2023 Drill Program & Early Results

Kodiak completed an extensive 2023 drill program comprising 18,500 meters across 5 new regional targets at MPD beyond the established Gate Zone deposit. Assay results so far from drill holes areas have returned some high-grade copper and long lower-grade mineralized intercepts. Tornquist explains these results support their porphyry exploration model - the presence of high-grade centers surrounded by lower-grade halo mineralization.

She states “That’s typically what a porphyry system consists of...you need both for a viable economic mine.” The company is particularly focused on discovering additional high-grade centers to complement the Gate Zone, which they view as their first proven mineralized zone.

According to Tornquist, while lower grades under 0.2% copper may not stand alone, they provide evidence for the significantly larger footprint of mineralization across MPD.  Regional operating mines like Copper Mountain have reserve grades of 0.23% copper and 0.1 g/t gold, so Tornquist maintains there are benchmarks in the district that point to potential economic viability. She cites recent long intercepts up to 1 kilometer grading 0.17% copper as encouraging in combination with the emerging zones of high-grade mineralization.

Market Environment

Despite the extensive drilling and Tornquist’s optimism on early drill results, Kodiak’s share price has remained static in 2023, ahead of declining broader junior mining valuations. As Tornquist notes, “Our share price certainly performed poorly like everybody else’s...I’ve spoken to many people who’ve been in the markets for decades and they haven’t seen as weak a market ever.” She attributes this weak market pricing across the sector to exceptionally tough macroeconomic conditions rather than company-specific factors.

With a treasury of $4 million, Tornquist sees Kodiak in a “good position” relative to many peers without funding for programs. She expects that when commodity markets turn, Kodiak’s progressed project and forthcoming drill results will “give us a boost.”

Given weak investor sentiment, Kodiak’s strategic focus is demonstrating large-scale potential at MPD to grab the attention of a major copper producer. Tornquist explains that the initial investment back in 2020 by Teck Resources, who remains their largest shareholder, signals MPD is the caliber of asset that interests a big mining company. She says “They are not interested in small projects” which confirms Teck sees the “potential to be a project that is of size interesting for a major.” With 18 defined regional targets at MPD and only a few tested so far, Tornquist believes they have room to grow the project considerably. If they can better establish a sizeable mineralized system, she expects that Kodiak will become an increasingly appealing investment opportunity, especially when markets recover. For now, with funding in hand and a supportive core investor in Teck, Kodiak feels no urgency to pursue other strategic capital.

“Our aim is to show the market and investors that we can build critical mass and grow the project.”

Path Forward in 2024

Flush with cash and pending drill results, Kodiak Copper plans to stay the course at MPD in 2024. Tornquist expects to design another discovery-focused drill program concentrated on the numerous untested regional targets across the expansive MPD land package. With their porphyry model seemingly validated by early 2023 drilling, she says “At this stage, it is about discovery...and demonstrating scale.” If Kodiak can make additional high-grade discoveries and better outline the lower-grade halo mineralization enveloping MPD, Tornquist is convinced that will put them in a strong position as markets recover.

For now, the company feels no pressure to divert focus towards their secondary Mojave asset as MPD commands their full attention and budget. With a still healthy treasury, Kodiak will look to raise additional capital to support their targeted drilling in 2023. Demonstrating scale potential stands above all other priorities.

The Investment Thesis for Kodiak Copper

• Kodiak offer leveraged exposure to potential copper discoveries in a premier jurisdiction at a depressed market valuation
• Success proving high-grade centers and lower-grade envelopes across large MPD land packages could drive substantial upside
• Major driller Teck Resources' early and continued investment signals large-scale potential major miners require
• $4M treasury funds an extensive 2024 exploration program targeting many undrilled regional targets
• Scaled discovery would come into favor in recovery with a positive shift in the copper macro outlook

Despite substantial drilling activity at their MPD copper project in British Columbia, junior explorer Kodiak Copper suffered in 2023’s weak metals market along with peers. With early results reinforcing their porphyry model and a healthy treasury, Kodiak remains focused on demonstrating large-scale potential to attract a major partner. The company expects to stay the course with regional exploration drilling in 2024, aiming to grow MPD’s high-grade centers and lower-grade footprint. While further dilution and copper price dependence present risks worth considering, investors see a meaningful upside if Kodiak can validate scale and copper demand brightens.