High-Potential Mineral Explorers Flying Deep Under The Radar: Kodiak Copper
Sep. 27, 2020 3:10 PM ET|
Peter Arendas
Long Only, Commodities, Research Analyst
Summary
Kodiak Copper drilled 282 meters grading 1.16% of copper equivalent at its MPD copper-gold project.
The grades are very good for a porphyry deposit.
Further drill results are expected soon.
The market capitalization of the company is $81 million, which leaves a lot of space for growth if similar drill results keep on coming.
In this series of articles, I would like to focus on mineral exploration companies that have very high upside potential, but for some reason, they are flying deep under the radars of investors. It is important to note that although the featured companies have very high upside potential, they are also very risky, as their projects are in early development stages and there are many things that can go wrong. Therefore, potential investors should be very cautious and invest only a small portion of their portfolios. The first company in this series of articles was HighGold Mining (OTCQX:HGGOF) (the article can be found here). The second one is Kodiak Copper (OTC:KDKCF).
Just Like HighGold Mining, Kodiak Copper also released some blockbuster drill results lately, reporting exceptional intersection of 1.16% of copper equivalent over 282 meters, made at its flagship MPD copper-gold project. The company is led by an experienced team including some of the key people standing also behind Great Bear Resources (OTCQX:GTBDF). Great Bear Resources is a company whose share price grew from $0.4 in September 2018 to its current value of more than $11, driven by great exploration success at the Dixie gold project. Great Bear CEO Chris Taylor serves also as Kodiak Copper's chairman. Kodiak CEO Claudia Tornqvist is a former general manager at Rio Tinto (NYSE:RIO), focused on the diamond and copper operations. What may prove very important is that she also worked for Sandstorm Gold (SAND). The experiences and connections with the people in the streaming business may be very valuable in the future when (and if) Kodiak gets to the point when the mine construction financing is needed.
Another of Kodiak's advantage is its tight share structure. There are only 37.9 million shares outstanding and 49 million shares fully diluted. Even after the recently announced C$12.5 million ($9.33 million) equity financing is completed, the share count will increase only by less than 5 million shares. Also, the shareholder structure looks good, the insiders own 14% of shares, "high net worth" investors hold 36% of shares, and the new strategic investor, Teck Resources (TECK), holds 9.9% of shares.
The MPD copper-gold project
The MPD project is located in southern British Columbia, in the middle of a mining region with multiple operating mines, such as New Gold's (NGD) New Afton gold-silver-copper mine, Teck's Highland Valley copper-molybdenum mine, or Copper Mountain Mining's (OTCPK:CPPMF) Copper Mountain copper-gold mine. Therefore, the infrastructure in the area is very good, the property is road-accessible, and also the permitting process should be relatively smooth.