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

I'm Ellis Martin. Join me now for a conversation with Claudia Tornquist, President and CEO of Kodiak Copper Corp., trading as KDK on the TSX Venture Exchange, KDKCF in the U.S. and 5DD1 in Frankfurt. Claudia, welcome back to the program. It's always great to chat with you.

And it's great to be here. Thanks for having me.

You have a 25,000-meter drill program in process right now at the Gate Zone, and you're already seeing some encouraging results. I'm going to let you talk about that.

Yes. We just came out with an exploration update today, and the program is going very well. We have over 7,000 meters drilled, 11 holes at the moment. Started with 1 drill rig in March, added the second, will potentially add or are planning to add another rig in the summer, so advancing well. And we have so far focused on drilling the Gate Zone when we made a discovery and last year had much success in extending the discovery and the mineralization at the discovery. Now this year, we've been drilling at the Northern end of the Gate Zone, have seen some encouraging porphyry host rock with sulfide, exactly what you want to see in the area between Gate and the Prime Zone, which is one of the other historically drilled areas. So it looks there might be a connection there and mineralization extend that way. So that's our model and certainly encouraged by what we see so far in our core. And we've also been drilling in the Southern part of the Gate Zone. There, we've drilled down to 875 meters, so that's deeper than ever before and also again are seeing all of the right rocks, nice porphyry host rocks with sulfide. So all looking very encouraging, and we're looking forward to the next set of results, which should come out very soon. We're expecting to release the first 2022 results in June -- later in June.

You mentioned core. And if you want to look at this news release, audience, I encourage you to do that. Just pull it up. It's on the website, kodiakcopper.com (sic) [ kodiakcoppercorp.com ]. I took a look at the -- I guess, the core shack. And if you want to see what a company is really doing out there, and not just listening to us but take a look at that news release, and the core shack is quite massive. And pictures of the drilling operation, I mean, it's right there. What are we looking at? And also some graphics and captures of the geophysical survey, what does the average investor who doesn't know a lot about geophysics and mining engineering and copper, what can they see by looking at these pictures?

Well, these images in the news release, the geophysical picture is a survey that we did last year, and we received the results earlier this year. And it was very powerful, very useful because we saw very clearly a strong correlation between high-grade drilling and high conductivity, which are this pink orange zone on the map in the news release. And the fact that there is this strong correlation means that this geophysical data is an excellent targeting tool because it tells us then where to drill next. And so it's been very, very useful. We did the first geophysical survey at the Gate Zone. And we are actually, just as we speak, doing a similar survey over the wider Dillard and Man areas, so we can use this data for drill targeting thereto.

So even though I'm not a geologist, I can tell from looking at these images on the news release that you have something quite exciting when you have that much color, red and the orange and what have you. And I understand there's a look-alike zone. I read that in the release. Would you explain what that means to the audience?

At the Gate Zone, we see 2 anomalies: one, which is the anomaly curve to conduct a pink orange down where we drilled and made our original discovery and where we're currently drilling to further extend that discovery; and then there is a very similar look-alike geophysical anomaly about 600 meters to the Southeast of the Gate Zone anomaly. That's a new anomaly that came out of this geophysical survey work we did. And that's obviously a very high-priority drill target and very excited to drill that, too. And that's also on the list for the summer, and we'll move a drill rig there and test that anomaly.

You and I have been traveling around at various places on the planet to do our jobs in promoting the business that we're in and talking about the companies that we're involved in. And even though the market has been down, and by that I mean the stock market in our sector has been down in the last few weeks, perhaps the last couple of months, the sentiment amongst my peers and your peers has been really, really upbeat considering nobody's suppressed, nobody is down because we all know that at some point, this dip is going to end, and it will go the other way because of the need for electrification around the world.

I think that's well said. And it's certainly also what I hear from investors. The long-term picture for copper and other battery metals or green metals is really quite compelling because there is a huge amount of demand from electric vehicles, from solar, wind energy. All these technologies and industry that underpin the energy transition, all these technologies are very copper intensive. There is a big demand. They are much more copper intensive than the technologies they replace. For example, an electric vehicle needs 3 or 4 or 5x as much copper as a conventional vehicle. And so there's just a big demand for copper coming and not very much on the supply side. Just very little in the development pipeline of mines being built, and projects being developed is at an all-time low. So the long-term picture looks very compelling. I have no doubt in my mind that we are in for a period of sustained higher copper prices. And more copper will have to be found, and that's the business Kodiak is in.

And that's a great business to be in. And that's why I'm an investor in your company because of the fundamentals and because of the management. I mean you have to look at the management team before you put your money in anything, whether it's in mining or biotech or any kind of widget, for example. The team is everything. You've got the project, you capitalize, and you have the management team, including yourself, a long history with Rio Tinto, a long history in corporate finance, a long history in mining; and the Chairman of this company, it's my company too because I'm an investor in this company, Chris Taylor.

Chris is a very important part of our success. Chris is a geologist, very creative and successful geologist. And what he did at Great Bear, our sister company, where he took a project that lots of people had looked at, interpreted it in a different way and made it a big success, Kodiak is a little bit of a similar story. Our MPD project is also a project that had been explored for decades, and nobody could make it work. And then Chris took a new approach. In our case, we just drilled deeper than all the shallow historic drilling, and we had success right away and made a discovery in our main drill program. So Chris' creativity and ingenuity as a geologist is very, very important to our success. And lots of people think of Chris as a gold guy because, of course, Great Bear, our sister company, was a big gold discovery. But his background as a geologist is actually in copper porphyries. He spent many years at Imperial Metals exploring for porphyries, so his porphyry knowledge is very deep and extensive. And yes, he is, as I said, a very important factor to our success.

And that's one of the main reasons, if not the main reason that I'm an investor in your company. And I have to tell you, even though you're a paid sponsor of this program, I don't get involved with just anybody because the people that listen to this program count on us. Although there are never any guarantees of success, they count on us for at least some good guidance to begin with. And it's been a real pleasure to actually get to know you and to get to know the company further and to present Kodiak Copper to our audience. I really appreciate the opportunity to share your story with our listeners. Thank you, Claudia.

Thank you.

I've been speaking with Claudia Tornquist, President and CEO of Kodiak Copper Corp., trading as KDK on the TSX Venture Exchange, KDKCF in the U.S. and 5DD1 in Frankfurt. Find the complete story on the company's website, kodiakcoppercorp.com. I'm Ellis Martin.