Copper metal prices have recently fallen back from a May 11 high of US$4.74 to US$4.30 today, resulting in lower prices for many copper stocks. Furthermore, the July 9 news of China reducing their reserve requirement ratio by 0.5% for most banks will unleash about 1 trillion yuan (US$154 billion) of long-term liquidity into the Chinese economy and will be effective on July 15, 2021.

These two events are very good news for investors looking to buy into the copper sector. Lower prices mean better buying, and Chinese stimulus usually means stronger copper demand and higher future prices.

One copper junior miner has seen its stock price pullback around 25% since peaking on May 17, 2021. The Company is Kodiak Copper Corp. (TSXV: KDK | OTCQB: KDKCF) (“Kodiak”). Investors can take a longer look at this junior miner with enormous potential, now selling at a ~25% discounted stock price since May.

Kodiak Copper stock price has dropped ~25% as copper prices fell since mid May, 2021

Source: Yahoo Finance

More good news for Kodiak Copper

Ironically while the stock price of Kodiak Copper fell back 25% following the copper fall, the Company has released a string of good news.

April 19, 2021 – Kodiak expands MPD Project through acquisition of Axe Copper-Gold Property of 4,980 hectares. This is a huge expansion and increases the MPD project by 51% to a total of 14,716 hectares. The release stated: “Axe is contiguous with Kodiak’s 100% owned MPD Project….with year-round accessibility from paved roads and excellent infrastructure. Axe is host to a porphyry complex comprised of four drill-proven copper-gold porphyry centres and has potential for additional targets similar to Kodiak’s Gate Zone……Four known zones of porphyry copper-gold mineralization (West, Adit, Mid, and South) occur within an extensive copper-gold porphyry system having a 17 square kilometre hydrothermal footprint.” This is a great acquisition which it seems the market is yet to appreciate. You can read the transaction details here.

MPD-Axe Properties location map within British Columbia, Canada

Source

May 11, 2021 – Kodiak provided an update on the drill program at MPD Copper-Gold Porphyry Project in Southern British Columbia. Plans for 2021 include up to 30,000 metres of drilling at several priority target areas, as well as further geotechnical studies…New drilling at the Gate Zone in 2021 has intersected prospective, sulphide-bearing altered porphyritic host rock at least another 125 metres south, and 75 metres north of last year’s drilling. This is more excellent news as the resource strike length grows.

June 17, 2021 – Kodiak adds a second drill rig at MPD Copper-Gold Porphyry Project in Southern British Columbia.

July 7, 2021 – Kodiak reports increase in strike length of Gate Zone from 125 m to 800 m, intersects 242 m of 0.52% CuEq in 575 m step-out. With over 15 drill holes completed by Kodiak to date, results suggest that the 1.2 kilometre long copper-in soil target in this area is underlain by a significant copper-gold-silver porphyry system.

It is the first and last news above that are most exciting.

The expansion of the MPD Project through the acquisition of the Axe Copper-Gold Property increases the MPD property size by 51% and therefore increases the potential end resource size.

The Gate Zone strike length extension was massive, an increase from 125m to 800m, or over a 6x (>500%) increase. Furthermore the drill result of “242 m of 0.52% CuEq in 575 m step-out” is exceptional in its length and will add to the resource estimate by being in a step-out zone outside the known resource area. This paves the way for further significant expansion of the resource.

Kodiak Chairman, Chris Taylor, stated: “With a six-fold increase in its drill-confirmed strike length to over 800 metres, and the identification of high-temperature bornite-rich copper mineralization, the Gate Zone has growing similarities to other large scale copper porphyry systems in British Columbia. In particular, recent mineralization and alteration discoveries have similarities to the Red Chris deposit where Newcrest Mining Ltd. recently acquired a 70% interest. Like the Gate Zone at MPD, Red Chris has high-grade copper-gold-silver mineralization core with a broad lower grade halo.”

Summary of Kodiak Copper’s projects

• The MPD copper-gold porphyry project – 100% owned, very large (9,733 hectare land package plus the new Axe property bring the total to 14,716 hectares) in a proven, mineral producing belt, in British Columbia (BC), Canada. For those that are new to Kodiak Copper, the Company amalgamated 3 projects into one – Man, Prime, Dillard. In 2020 Kodiak Copper drilled a massive 282 m of 0.70% copper and 0.49 g/t gold (1.16% CuEq). The MPD Property has road access and is close to nearby power, towns, and other mines.
• The Mohave Copper-Molybdenum-Silver Porphyry Project in Arizona USA
• The Kahuna Diamond Project in Canada.

Finding copper at Kodiak Copper’s MPD Project in British Columbia, Canada

Source: Kodiak Copper images gallery

Closing remarks

A recent copper price dip has resulted in Kodiak Copper’s stock price pulling back by about 25%. Combine this with the July 15 reduction of China’s banking reserve ratio requirement by 0.5% and you have a nice combination of value and growth that has appeared.

Kodiak Copper trades on a market cap of just C$72 million and has huge exploration potential upside, especially given their assets, past results, and proven management. One to consider strongly.

Discovery viewed as “transformative”

Today I take a look at junior copper miner, Kodiak Copper (TSXV: KDK | OTC: KDKCF). Kodiak saw its stock price almost triple in the past week after announcing drill results, including 282 m of 0.70% Copper and 0.49 g/t Gold (1.16% CuEq) at their advanced MPD copper-gold porphyry project in British Columbia, Canada.

Kodiak Copper almost triples on a drill result last week

The copper price, currently at US$2.98/lb, has started to recover lately as global activity comes back from the initial shock of COVID-19. Looking further ahead, in the next 10 years there is a clear demand surge about to hit from the coming booms in electric vehicles and renewable energy.

From a supply perspective declining global copper grades and a lack of new projects means less copper output is expected. Higher copper prices will be needed to incentivize new copper projects.

Any copper companies that can bring a growing, low cost, production of new copper supply to market this decade should do very well.

Analysts are forecasting a future copper deficit to emerge in the 2020s

Source: Courtesy CRU Group

Copper demand vs. supply forecast

Source

The drill results

Kodiak announced on September 3, 2020 the discovery of a significant high-grade copper-gold extension of the recently discovered Gate Zone at the company’s 100% owned MPD copper-gold porphyry project in southern British Columbia, with a drill result of “282 m of 0.70% Copper and 0.49 g/t Gold (1.16% CuEq), Including 45.7 m of 1.41% Copper and 1.46 g/t Gold (2.75% CuEq).”

Chris Taylor, Chairman of Kodiak commented that, “as compelling as our 2019 discovery of the Gate Zone was, it now appears we had only grazed the margins of a much stronger copper-gold zone which we have now successfully targeted.  Our new results include discovery of a central high-grade copper-gold zone within the wider copper-gold mineralized envelope of the Gate Zone.  These drill results are among the strongest that have been reported from this well-established copper mining district in southern British Columbia.”

Claudia Tornquist, President and CEO of Kodiak, added they viewed “this new discovery as transformative for the project, and by extension for Kodiak, and pointed specifically to the “new high gold values, which we would have viewed as a successful stand-alone gold discovery in the absence of any copper.” She said that Kodiak anticipates “a very active remainder of 2020, and that 2021 will be our most exciting and productive year so far.”

Kodiak Copper’s projects

Kodiak is focused on its portfolio of 100% owned copper porphyry projects in Canada and the USA.

• MPD Copper-Gold Porphyry Project in the prolific Quesnel Trough in southern British Columbia, Canada, where the Company made a discovery of high-grade mineralization in 2020 (as mentioned above).
• Mohave Copper-Molybdenum-Silver Porphyry Project in Arizona, USA, near the world-class Bagdad Mine.
• Kahuna Diamond Project in Nunavut, Canada, hosts a high-grade, near surface inferred diamond resource and numerous kimberlite pipe targets.

Note: Both of Kodiak’s porphyry projects have been historically drilled and present known mineral discoveries with the potential to hold large-scale deposits.

Kodiak Copper’s 3 projects location map

Source

Kodiak was founded by Chris Taylor who is well known for founding Great Bear Resources (TSXV: GBR) (Market cap C$897m), which made a highly significant gold discovery. Kodiak is also part of the Discovery Group of companies led by John Robins, one of the most successful mining entrepreneurs in Canada.

Closing remarks

Juniors that can find and grow good size copper resources will be handsomely rewarded, especially if their project is located in a safe jurisdiction. It is still very early days for Kodiak Copper as they continue to explore and work to develop a resource. Further drill results are expected before the end of the year.

As experienced resource investors know, porphyry projects are usually lower grade but large. What excited the market so much last week was that Chris Taylor may have again discovered something big in Canada. Given the market cap is still only C$65m, if the project can continue to progress and grow a significant resource this may only be the beginning for Kodiak Copper.