Kodiak Copper Corp. (KDK) Earnings Call Transcript & Summary

Hey, everyone. Welcome into another daily editorial here on the KE report. We're getting an update from Kodiak Copper, traded on the TSX Venture Exchange under the symbol KDK and on the OTCQB under the symbol KDKCF. We are chatting with the President and CEO, Claudia Tornquist. Kodiak is focused on the MPD copper-gold porphyry project in south-central British Columbia. The company did just release some news back on February 3 regarding some new targets that were identified by some geophysical work that was completed last year and that the results are rolling in for. And then the company also holds the Mohave copper-molybdenum-silver porphyry project in Arizona. We'll touch on that at the tail end of this interview. Claudia, when we look back on that news release from February 3, the title simply says Kodiak identifies new geophysical drill targets near the Gate Zone. Now again, this, it's an interesting way that you guys have gone about isolating these targets by using a little bit of the old drill results, your past drilling; and comparing that with some of the geophysical results that are showing some different areas that are of interest. Please just kick us off with a general overview of how this program is generating some of these newer targets.

Yes. I'd be very happy to. As you know, exploration, you always look at a number of different data points. You look at geophysical data. You look at geochemical sampling results, surface anomalies, then obviously you have drill results. In our case, we had historic results. And now we also have drill results at the Gate Zone that guide our future drilling. And we are at the moment in the process of looking at this large amount of data and determining where to drill first and what to prioritize in 2022, where we have a very large 25,000-meter drill program planned.

Well, Claudia, just remind people. When you did these deep IP surveys, how far down did you go? And how does this give you a new way to interpret some of the past data when you combine this with the previous drilling?

We did a deep IP survey last year, in the autumn. And as I said, the data we got from that is down to 500 meters, so significantly deeper than any other sort of IP or geophysical data we had before. And we also have, of course, at the Gate Zone where we made the discovery, our drill results. And so we're able now to look how the geophysical data corresponds and correlates with the drill results. And what we saw, and this is really powerful, is that the high-grade mineralization actually correlates really well with certain geophysical responses, i.e., high conductivity and chargeability. So that's a very, very good targeting tool because now obviously we look where else is the same geophysical signature. How does it extend in and around the Gate Zone? And that's where we'll target next because that points us towards where we'll have a good likelihood of finding further high grade. And what's the most exciting is that we found a parallel response anomaly very similar to the Gate Zone, about 600 meters away. And it's a large anomaly of almost a kilometer in length, very much a look-alike to the Gate Zone that we weren't aware of before and that's never been drilled. That's just a geophysical target now; and obviously very, very high priority for drilling; looks exactly the same as the Gate Zone where we found the high grades. And so yes, we will certainly go there this year and drill some more and see what we can find.

So that new target is outlined well in figure 2 of the news release. I will post that below. And there are a lot of similarities, at least in terms of size and even the makeup of that target, to that Gate Zone. Can you just remind everybody of some of the drill results you have had from that Gate Zone; why it is such an encouraging, first of all, area, just the Gate Zone, but then also potentially having this parallel zone?

Well, the Gate Zone is a very nice high-grade porphyry center that's now starting to show some significant size after our first year of drilling there. Our highlight drill intercept there was 500 -- over 500 meters of [ 0.77% ] copper equivalent, which is a grade several times higher than the neighboring mines. For example, Copper Mountain, our direct neighbor, their mined material is 0.23% copper. So fortunate to have hit a high-grade zone with Gate at MPD. It's obviously a great start. We were able to grow it significantly and there's lots more to come.

Well, Claudia, in addition to this new target that you found and in addition to the Gate Zone, just remind people: There's a dearth of other targets that you found. You've got the Prime target. You've got the [ 15, 16 ] zone; and [ Axe ] to the south; the Man; the Dillard. I know you've been looking at Dillard and starting to drill there. Are there any that stand out to you as also ones that we'll get some drilling this year out of that 25,000 meters?

We have lots of targets, you've said that well, on MPD. We're certainly not short of drill targets there, and all sizable ones. And many of them, like Dillard, Man, Prime, [ Axe ], they are, like Gate, historically drilled, so there is already shallow copper and gold near surface. And what we'll do this year is take the model that worked at the Gate Zone, i.e., deeper drilling below the shallow historical; and replicate it at these other targets. And that's very exciting because, if we are successful, and I think we have a very good chance of being so, then there is a potential for another game-changing discovery at MPD and for some real increase in potential size and scale. So it's certainly a very exciting year for our company as we, well, test these other targets and replicate the model from the Gate Zone at these other targets.

So is there any more targeting work that's going to be released to the market? Or are we now simply just waiting for some drills to get turning and see what these targets yield in terms of drill results?

We'll have some more drill results actually coming from last year. We're still waiting for some from the labs. So that will come later in February and probably also some more in March. And then the drills will be starting to turn again soon. And we'll embark on our new year -- new drill program 25,000 meters and then lots of results throughout the years from that.

Claudia, any insights on how much this 25-meter (sic) [ 25,000-meter ] program will cost budget-wise?

We're well funded for it. We have at the moment 9 million roughly in the treasury, and that'll fund this year's work. We can make it last for the year, so are under no pressure to finance, which is of course a good situation to be in.

Well, Claudia, we'll keep following along as some of these drill results come back from the MPD project and some of these new targets get drilled, but let's also migrate down to Arizona real quick, to the Mohave copper-molybdenum-silver project you have there. It's one that you're going to be doing some initial drilling on, I think, the first time this year. And just to remind people: This is a project very near Freeport-McMoRan's Bagdad mine. What do you hope to get from the maiden drill program at Mohave this year?

Well, I'm very excited to get drilling at Mohave. It's a very interesting project, as you said, in a very good neighborhood. It also has, like MPD, some historic drill results and lots of smoke, but nobody has figured it out yet. So it's very much a similar project like MPD was when we got it, so we'll do a similar approach. We start with a small maiden drill program 1,500 meters or so, and that's going to happen this year. And yes, I am excited to get working in Arizona as well.

All right, Claudia, I think that wraps us up here in terms of looking ahead to some of the work that's going to be undertaken this year, a large drill program 25,000 meters; plus a drill program at the Arizona project, the Mohave project; and some more drill results still to come out from last year's drill program, but again this year it sounds like you will also be testing a lot of these other targets, some of which were just announced a couple days ago. So hey, Claudia, we really appreciate the update. Please keep us up to date on future news. If anybody has any follow-up questions for Claudia regarding any of the drilling or work that's being planned for this year, please e-mail us, either [email protected] or [email protected]; and we will get those addressed for you. We will be following up on some more news. So Claudia, appreciate your time today. Please keep us up to date on future news.

Thank you.