Kodiak Copper and Teck Move to Spin Off Arizona Assets into New Listed Copper Explorer

• Kodiak and Teck will each contribute a 100% owned Arizona copper porphyry project into Kay Copper Corp., to be listed on the TSX Venture Exchange
• Each party will receive 20 million shares at a deemed price of C$0.25 per share and is expected to hold approximately 28% of Kay Copper upon closing
• Kay Copper aims to raise a minimum of C$4.0 million through a concurrent subscription receipt financing, with proceeds directed towards 2026 exploration programmes on both properties
• Teck is expected to receive offtake rights on concentrate production from both projects as part of the transaction terms
• Transaction closing is targeted for the third quarter of 2026, subject to definitive agreements, regulatory approvals, and TSXV acceptance

Kodiak Copper Corp. (TSXV: KDK, OTCQX: KDKCF, Frankfurt: 5DD1) is a Vancouver-based mineral exploration company focused on advancing its flagship MPD copper-gold porphyry project in the Quesnel Terrane of south-central British Columbia, Canada, a region with producing mines and existing infrastructure. A mineral resource estimate published in 2025 outlined seven substantial deposits at MPD, all of which remain open for expansion, with numerous untested targets across the broader property. The company continues systematic exploration at MPD with the goal of delivering new discoveries and expanding the project's resource base. Kodiak was founded by Chris Taylor, known for his role at Great Bear Resources, which was subsequently acquired by Kinross Gold. The company operates under the Discovery Group network, led by mining entrepreneur John Robins.

Letter of Intent to Combine US Copper Assets

On 29 April 2026, Kodiak Copper announced it had entered into a non-binding letter of intent with Teck Resources Limited and Kay Copper Corp. (formerly Railtown II Capital Corporation), an unlisted reporting issuer. The LOI, originally signed on 17 February 2026, sets out the principal terms of a proposed transaction to combine two separately held Arizona copper exploration projects into a new, publicly listed company.

The stated rationale for the transaction is that it is expected to generate synergies and unlock value not currently recognised within the existing corporate structures of Kodiak and Teck. The companies also cite a favourable policy environment in the United States for domestic critical mineral projects, and note that Arizona accounted for approximately 70% of US copper output in 2025, describing it as a prolific mining district with existing infrastructure.

Claudia Tornquist, President and CEO of Kodiak, said:

"While Kodiak remains firmly focused on the MPD project in British Columbia, we are excited to combine our Mohave project with Teck's Copper Hill project in a new company, Kay Copper. We are thrilled to become shareholders in Kay Copper alongside Teck and are confident this new venture has the potential to create substantial long-term shareholder value. With two projects with multiple targets ready to be drilled this year, Kay Copper will be well positioned to pursue a strategy of growth and value creation."

Transaction Structure and Financing Arrangements

Under the proposed terms, a new private company referred to as NewCo will be incorporated to receive the Mohave and Copper Hill projects from Kodiak and Teck respectively. In exchange for contributing their assets, each party will receive 20 million NewCo common shares at a deemed price of C$0.25 per share. This price is used for transaction purposes only and does not represent a formal valuation of either project.

NewCo will then complete a three-cornered amalgamation with Kay Copper Corp., a process by which NewCo merges with a subsidiary of Kay Copper and NewCo shareholders receive one Kay Copper share for each NewCo share held. Following the amalgamation, Kay Copper will apply to list its shares on the TSX Venture Exchange. Assuming full completion of both financings, Kay Copper is expected to have approximately 70.3 million shares outstanding on an undiluted basis, with Kodiak and Teck each holding approximately 28%, existing Kay Copper shareholders holding 9%, management and board participants holding 12%, and concurrent financing subscribers accounting for the remaining 23%.

Two separate fundraising rounds are planned before or concurrent with closing. The first is a non-brokered initial financing for incoming management and board members at C$0.10 per share for up to C$830,000, expected to close prior to the main transaction. The second is a subscription receipt offering at C$0.25 per share, targeting minimum gross proceeds of C$4.0 million. Under this structure, investor funds are held in escrow and released only upon satisfaction of specific conditions, including completion of the asset transfers, amalgamation, and TSXV conditional approval. If those conditions are not met, subscribers receive a full refund.

Project Highlights and Management Team

The Mohave project covers 17 square kilometres in Mohave County, Arizona, approximately 33 kilometres west of Freeport McMoRan's Bagdad porphyry copper mine, which the company describes as geologically and structurally similar. Previous operators identified a large system of porphyry-style copper-molybdenum-silver mineralisation across the property, and limited drilling was conducted. No drill programme has taken place at the site since 2011, and multiple soil and rock geochemical targets and geophysical anomalies remain untested. The Copper Hill project, contributed by Teck, covers 35 square kilometres in Arizona near the producing Christmas and Chilito copper mines. Recent work by Teck has identified at least three large porphyry centres with potassic alteration and veining. Systematic exploration at Copper Hill has been limited to work carried out in the 1960s and 1970s, and multiple drill-ready targets have been identified. Drilling on both projects is planned for 2026.

Adam Schatzker will serve as Chief Executive Officer of Kay Copper upon closing. He has over 25 years of experience across corporate development, capital markets, and project evaluation in base, battery, and precious metals. Most recently, he was Vice President, Corporate Development at Canada Nickel Company, where he led government funding initiatives for the Crawford Nickel Sulphide Project. He has also held senior roles at RBC Capital Markets, Research Capital, Waterton Global, and Uranium One. Claudia Tornquist, currently President and CEO of Kodiak, will chair the Kay Copper Board of Directors. She has previously served as General Manager at Rio Tinto and as Executive Vice President Business Development at Sandstorm Gold.

Supporting the team as advisors are Chris Taylor, John Robins, and Jim Paterson, all principals of Discovery Group. Taylor, founder of Kodiak Copper, has over 20 years of experience in structural and economic geology and led Great Bear Resources through its C$1.8 billion acquisition by Kinross Gold. Robins, co-founder of Discovery Group, has been involved in over C$2.6 billion in merger and acquisition activity throughout his career and received PDAC's Viola R. MacMillan Award in 2025. Paterson, also a Discovery Group co-founder, has held directorships at Kaminak, acquired by Goldcorp, and Great Bear Royalties, acquired by Royal Gold. Other management and board appointments will be named in due course.

Next Steps and Milestones

With the LOI in place, the parties are working towards negotiating and executing definitive agreements, completing mutual due diligence, and securing the necessary corporate and regulatory approvals, including acceptance from the TSX Venture Exchange. The NewCo Initial Financing is expected to close before the main transaction, while the NewCo Concurrent Financing is set to close alongside it. Subject to all conditions being satisfied, the transaction is targeted for completion in the third quarter of 2026. Kodiak has stated that it will continue to advance the MPD project in British Columbia independently of this process. Further details are expected to be disclosed as the transaction progresses.

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