skip to Main Content
enquiries@thearmchairtrader.com

Sign up for our Free Daily Digest newsletter: Actionable insight every morning, designed for the self-directed investor. Find out more

Canadian copper explorer Kodiak Copper (TSX-V:KDK) has strengthened its shareholder register by adding Teck, Canada’s largest diversified resource company, with a 9.9% interest. The investment will provide Kodiak with capital to fund the company’s ongoing work program at its 100% owned MPD copper-gold porphyry project in Southern BC, including an expanded drill program.

Kodiak Copper was first covered by The Armchair Trader on 23 April. At the time we said we liked this junior miner because of the fact it was looking into further drilling at a prime copper site which had only been lightly explored by bigger names like Rio Tinto and Newmont. In addition Kodiak features a highly reputable management team in the form of CEO Claudia Tornquist and chairman Christopher Taylor, founder of Great Bear Resources.


“Kodiak is delighted to welcome Teck as a shareholder,” said Claudia Tornquist, President and CEO of Kodiak “We view Teck’s investment as a strong endorsement of the MPD project and Kodiak’s management. With the proceeds of this private placement we will be able to expand on the momentum of our recent Gate Zone discoveries, and test other porphyry targets across the MPD property through 2020 and 2021.”

The placement will consist of 1,038,868 common shares of Kodiak Copper, at a price of C$1.95 per share and an additional 3,013,839 flow-through common shares of the Company are expected to be placed through a charity flow-through arrangement at an average price of C$2.82 per share, (a cost to Teck of C$1.95 per share), for total gross proceeds of approximately C$10.5 million.

Kodiak Copper shares hit new high

Kodiak Copper shares pushed to a new high of CAD 2.50 on the news, making it one of the better performing shares on The Armchair Trader pick list this year. We added it to the list in April, when the stock was trading at CAD 0.25.

Following the placement, Teck will own approximately 9.9% of the issued and outstanding common shares of Kodiak on a non-diluted basis. In connection with the placement, Kodiak has agreed to grant Teck an equity participation right to maintain its pro-rata ownership in the company.

The proceeds from the placement will be used to advance the Kodiak’s MPD project and other mineral projects, and for general corporate purposes. Kodiak Copper had been forced to delay its MPD exploration in the spring, but has now completed its first set of exploratory drilling. We understand that this will also help to fund further work at Kodiak’s copper-gold porphyry at Mohave, Arizona.

The closing of the private placement is expected to occur on or before October 6, 2020. Closing is subject to negotiation and execution of definitive documentation and receipt of all regulatory approvals including the acceptance of the TSX Venture Exchange.

Further drill results from Kodiak’s MPD project are keenly anticipated in the next couple of weeks. Kodiak is expected to commence further drilling at MPD this autumn.

Related

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.

Comments

Back To Top