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Kodiak Copper (TSXV: KDK) is a junior miner listed in Canada that is focusing on copper and gold exploration in Canada and the United States. Since the beginning of the month it has been trading in Toronto under the KDK designation.

Kodiak Copper is a newly reorganized entity which has recently been renamed and cashed-up by sophisticated investors.

The Armchair Trader has been bullish on the copper price for a while and one of the best ways to get access to this has been through copper miners and explorers.

UK investors love to jump in and out of Rio Tinto, and we’re fans of that stock too. But Kodiak Copper seems to us to be well positioned to exploit a gap in the global copper supply, which looks to be opening up regardless of anticipated slowdown in the global economy caused by the coronavirus.

Kodiak Copper is exploring a large (7850 hectares) land package in southern British Columbia which sits in a proven mineral producing belt between Highland Valley Copper and Copper Mountain, two of Canada’s largest copper mines. Its site, called MPD, is easily accessible and right off the highway.

Kodiak Copper has considerable experience, with a management team that includes chairman Christopher Taylor, founder and CEO of Great Bear Resources, and Claudia Tornquist, who came across from Rio Tinto and who led the sale of Kennady Diamonds to Mountain Province. The share price is trading at roughly the levels that Great Bear was at in 2017, at CAD 0.25.

Great Bear Resources should need no introduction for seasoned mining investors: it is considered one of the best gold mining stocks on the planet. It had a spectacular run in 2019 from CAD 2.32 on 9 May to CAD 9.30 on 17 September. But you could have had the stock for CAD 1.95 back in August 2018, and in 2017 it was priced at CAD 0.25.

What is Kodiak Copper onto in British Columbia?

The MPD property attracted Kodiak Copper as it has already had some historic drilling activity with the first holes drilled in 1966. Both Rio Tinto and Newmont have been interested in MPD previously, but the historic drill holes have rarely descended below 200 metres.

Deeper drilling at MPD is looking a bit more optimistic: drills in 2013 found intervals of copper/gold mineralization with increasing grade at depth. Kodiak is following up on this with a drilling program which it has commenced towards the end of last year.

The results to date look bullish: Kodiak says it has made a discovery called the Gate Zone with higher grades than historic drilling as well as the longest mineralized interval to date. The grades being drilled compare favourably to those from neighbouring mines and have included some of the best results found on the MPD property.

“A small exploration budget goes a long way in a project as accessible as MPD,” Claudia Tornquist, CEO of Kodiak Copper told The Armchair Trader. “This project has only recently been consolidated. It has been explored at different times by different companies, but this is now the opportunity to explore the entire porphyry system and home in on the higher-grade areas. We’ve had a great start and we’ll be picking new targets to exploit this.”

Tornquist says Kodiak will be drilling in May or June, COVID-19 allowing, and is currently conducting geophysical surveys in preparation. The company is fully-funded and the exploration work is not impacted by virus restrictions (British Columbia has ruled mining exploration as an essential activity).

This is in stark contrast to many other exploration companies that are unable to raise further funding because of the poor situation in the markets or which are still locked down in other regions. Projects in remote regions especially, which rely on camps, are likely to stay locked down for longer because it is difficult to maintain social distancing under those circumstances.

Other Kodiak Copper projects

It should be noted that Kodiak Copper is not focused exclusively on MPD. It has another porphyry project at Mohave, near Bagdad in Arizona (home of Freeport’s Bagdad mine), and Trapper, a potentially large porphyry complex in northern British Columbia, close to Brixton’s Thorn mining project.

Kodiak recently consolidated its shares at the rate of one post-consolidation share for each five previously listed. It has also completed a CAD 2.8 million placing which will be used to fund further exploration in both Canada and Arizona.

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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