Kodiak Copper (KDK) - Copper Porphyry Shows Early Promise

Kodiak Copper is focused on its portfolio of 100% owned copper porphyry projects in Canada and the USA. The Company’s most advanced asset is the MPD copper-gold porphyry project in the prolific Quesnel Trough in southern British Columbia, Canada, where the Company made a discovery of high-grade mineralization in 2020. 

Kodiak also holds the Mohave copper-molybdenum-silver porphyry project in Arizona, USA, near the world-class Bagdad mine. Both of Kodiak’s porphyry projects have been historically drilled and have known mineral discoveries with the potential to hold large-scale deposits.

Their Kahuna diamond project in Nunavut, Canada, hosts a high-grade, near surface inferred diamond resource and numerous kimberlite pipe targets. Kodiak is considering strategic options for the Kahuna project.

Kodiak Copper has had a strange couple of weeks. The market got very excited about their initial drill results. The share price shot up from about C$0.50 to over C$3.15 in a matter of days, with interest from retail investors. The latest drill results are also good for a copper porphyry, but it seems the market wanted more so the share price has dropped back down to about C$1.67.

Institutional investors seem pleased though, as they should be. This is a quality, highly experienced management team. Porphyry's tend to be very large mineralised ore bodies and need work to be understood. Tornquist is clear, it's still early days. More drill results should start to paint a picture of what they think they have. They are capitalised and have a process that they are following. Copper is getting exciting again and 2021 should see renewed interest from more retail investors. Potentially Kodiak has the leverage to get copper investors excited.

We Discuss:

• 1:41 - Madness of Share Price: What Got People so Excited?
• 3:10 - A Deeper Look into Kodiak: Grade, Scale, & Opportunity
• 6:09 - Team Experience
• 7:56 - Timing the Cycle: Why Copper, Why Now?
• 9:19 - Business Plan & Mission: Definitions for Success
• 12:41 - Data & its Effect on Future Decisions
• 14:16 - Recent Raise & Shareholders: Involvement of Teck Resources

Location of Kodiak Projects - Kodiak Copper Corporate Presentation Oct. '20

Kodiak Share Price

The initial results for Kodiak Copper were extremely high-grade results for a porphyr which created some excitement. When they released the second set of results which were good but not as good as the initial results, they saw some selling off so the company has had a strange few weeks but they are fully financed and have a lot more work planned and a lot more opportunity to generate good results.

Trench at Prime Zone, MPD Project - Kodiak Copper Corporate Presentation Oct. '20

Tornquist explains that it is important to understand that with a porphyry deposit like theirs, there is a large lower grade area with potentially some higher-grade zones in there too. They released one really high-grade drill hole and have also had some lower grade, but both are needed to create an eventual economic scenario so it's important to look at all the results and their size potential too. Now they have a few results, they can see that they have a width of 300m over which they have intercepted mineralisation down to 800m. Even though they are early on in their drilling, and have lots more work to do, they can see some size. It is both important to understand the grade and the size of the ore body that they are investigating. Typically, a porphyry is a large body of mineralisation and there are higher grade zones in there. Often those are the ones that make the mine.

Copper Oxide in historical trench at Prime Zone, MPD Project - Kodiak Copper Corporate Presentation Oct. '20

Background and experience

Chris Taylor is the founder of Kodiak and started the company in 2015. Tornquist was involved right from the start, first as an investor and then as a consultant. At the time it was a very small company and she became a consultant then later joined the board in 2016 and then in 2017 joined the management team as president, and now CEO.

Tornquist has been in the resource industry for 20-years, and spent almost 10-years with Rio Tinto. She has spent a lot of time working on Copper projects and was involved in some work on Escondida, on the expansion Feasibility Study. Escondida is the biggest porphyry mine in the world. She also did some work on the evaluation of Oyu Tolgoi which is another very large porphyry mine in Mongolia. A fair amount of Tornquist’s background is in Copper. Following Rio Tinto she made the switch to Vancouver and has been in the junior sector ever since.

Tornquist has joined Kodiak to cover the corporate management, and Chris Taylor, the chairman, is a Geologist and covers the technical side. Kodiak are part of the Discovery Group which gives them a network of other companies, contacts, technical expertise to tap into.

Business Plan

Tornquist says that they have C$15M and that they plan to do a lot more drilling. They are now financed for 30,000m of drilling and at the moment still have a little more drilling to do at the Gate Zone where they made the discovery. They then have other targets across the project which they would like to drill, in particular The Village Zone, which they were meant to drill last summer, with the last hole into the Dillard Zone. Once they had drilled the results at Gate they didn't move the drill so they still have the Dillard Zone to drill, which is high on the list and they have other targets too. They have a very busy year coming up with lots more drilling and a lot more news flow. 

MPD project - large Copper-Gold Porphyr system - Kodiak Copper Corporate Presentation Oct. '20

Kodiak plans on drilling the Gate Zone further; showing size and showing where it comes to surface. They will also be building out the lower-grade mineralised envelope. The Dillard target is also an interpreted porphyry centre which they would like to test as a potential for another high-grade discovery.

The Copper Mountain Mine, MPD Project - Kodiak Copper Corporate Presentation Oct. '20

Kodiak is working towards an open pit, near-surface mineralisation but it is early days to talk about underground open pit when they are only 6 drill holes into a 10km2 mineralised footprint. They will be looking at their Gate Zone, where the mineralisation comes closest to the surface as the data shows an upright porphyry system and are chasing that now to understand more about how it is oriented, where the high-grade zones are and where it extends to as they build further.

The infrastructure at the MPD Project - Kodiak Copper Corporate Presentation Oct. '20

Exploration is interesting as when you drill one hole, it then determines what the next hole will be, because every time you drill you learn a little bit more about what you have, how the mineralisation is oriented and where the high grades are and that drives the future plans explains Tornquist. At the moment their aim will be to chase the high-grade zone at Gate to see how large it is and how much of it they can prove with results. They then have other targets on the horizon as well.

Investors

Teck Resources came in as a large shareholder and put in 99% and they have a small number of other investors. When they got their results and were financed, they had a lot of interest, but Teck made an offer that was by far the most advantageous for their shareholders. 

Before this round of financing, it was still a very typical, small, early-days junior mining company with the majority of shareholders being high-net-worth individuals and family offices. Now, they have Teck as a large shareholder, and want to have more institutional investors and funds on board.

It is early days which is important to understand for investors. They are only a couple of holes into a very large system so we will watch their forthcoming news and results with interest.

The green revolution fuels the Copper demand and Copper deficit looms - Kodiak Copper Corporate Presentation Oct. '20

There is a massive demand for Copper on the horizon from the 'green revolution' and 'decarbonisation' initiatives. A big demand is coming but on the supply side, there is very little in the pipeline which is good news for the copper price and for companies like Kodiak.

To Find out more, go to the Kodiak Copper Website