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

Hi, I'm Chris Thompson for InvestorIntel. And today, I'm talking with Claudia Tornquist from -- who's the President and CEO of Kodiak Copper. Symbol is KDK, on the TSX Venture Exchange. How are you today, Claudia?

I'm very well. It's great to be here. Thanks for having me, Chris.

Great. So you put out some news release earlier this month about some really good geophysical work at your project in BC. And for investors, who want to have a look at the pictures, it shows a pretty clear images of some really interesting new target zones in and around your existing zones that you've been drilling with great success. Maybe you can just talk about that news release from earlier this month.

Yes. We put out the results from a deep IP survey we did last autumn, and we were very pleased with the results. They really help with our targeting for this year's drilling. Essentially, the responses, the geophysical responses very much correlate with what we see in our drilling, i.e., where we drill high grades, we see a high conductivity and where the high conductivity zone stops, the high-grade stop. So very, very powerful. And that, of course, now tells us where to drill next. We see where these high conductivity and chargeability actually zones extend, and that's where we go next with our drilling in and around the Gate Zone to further drill and extend the gate zone. And then the most exciting outcome or results from the -- from this new data, geophysical data is that we see an analogue response, parallel response just a couple of hundred meters away, very large, similar in size to the Gate Zone, essentially a look-alike of the Gate Zone, and we weren't aware of that before. And that, of course, is our new and very exciting, very high priority drill target for this year.

Now the Gate Zone last year for investors, you want to look back, you released something in December. It was a very long, well, it was like 500 meters of almost 0.9% copper equivalent. So that must be very exciting to see a zone like that. And as well as last year, you did about over 30 holes and over more than 20,000 meters of drilling at your project in BC. What are the plans for this year with regards to drilling?

We have another large drill program planned. Last year, we drilled just under 22,000 meters. This year, we're aiming for 25,000, even more. And we'll drill further at the Gate Zone. And then importantly, we'll also start testing other targets. The new target that I just referred to that has come out of our geophysical data and also the other historically drilled porphyry centers that have only shallow historic drilling and have never been tested deeper, and we'll take the model that brought success at Gate and essentially replicate it at these other historically drilled targets, like Dillard, Man, Prime, Axe.

So Claudia, what do you find when you drill deeper? Are you finding a higher grade?

Well, at MPD in the Gate Zone, what we see so far is lower-grade mineralization near surface. And the best grades we have drilled are between 300 to 500 meters in depth in the drilling we have done so far. And -- that's where we are. We obviously drilled a lot more. The Zone is still open in many directions, and we'll see what else we can come up with.

And how are you funded for this year?

We have currently $9 million in the treasury, so we are well funded for our work this year and under no pressure to finance anytime soon, which is, of course, a good situation to be in.

I noticed that in your cap table that Teck was an investor, why would Teck be investing in a small junior like Kodiak?

Well, Teck put in $8 million after our initial high-grade discovery at Gate. That was very well received by the market. Obviously, it was seen as a big vote in confidence. And the reason being that Teck as a major is not interested in small projects. The fact that they invested is testament to them believing that MPD has potential to be a sizable porphyry. And porphyries, in generally, that's what they are about, porphyry deposits. They are large elephant deposits, often a very large amount of lower-grade mineralization with then some high-grade centers, one or several [indiscernible], and we were fortunate at Gate to drill into a nice high-grade porphyry center right at the start of our exploration work, and we'll take it from there.

And before I end, I just want to talk a little bit about the Copper business itself. We've seen copper get above $4 and stay there and lots of talk in the marketplace about the electrification of the economy. How do you see copper moving forward?

I mean the long-term fundamentals for copper are outstanding. It doesn't need a science degree to figure out that anything electric needs a lot of copper. And if you look at the growth in electric vehicles, they're just really taking off around the world. And other green technologies and energy transition -- technologies, such as solar, wind technology, et cetera, it's very much the same story. So there is big demand for copper. And the supply side is just not there at the moment. Inventories in copper are very low. That's why we've seen the spikes in the copper price recently. And I just read a report by UBS, they expect copper to go over $5 over the next couple of quarters because of these supply shortages.

Interesting. Well, I look forward to following your company and the drill results over this year, and hopefully, we can get you back to talk about some of the results and proving up some of those anomalies. Again, I recommend that the investors go to the Kodiak Copper website to look at the images from the news release to see exactly how these zones are clearly being shown on the maps provided. Thank you for your time today, Claudia. I was talking with Claudia Tornquist, who is the President and CEO of Kodiak Copper. The ticker is KDK on the TSX Venture Exchange.