Kodiak Copper exploration results point to further size potential

The results from five drill holes released by Kodiak Copper Corp. (TSXV: KDK) have increased the mineralized area at the Gate Zone of the company’s 147 sq. km. MPD copper-gold project in British Columbia.

The company’s fully funded, 25,000-metre drill programme has delivered “impressive” intercepts, according to CEO Claudia Tornquist.

“The Gate Zone has delivered further impressive drill intercepts as we continue to increase the size of mineralized envelope, which now extends to a kilometre in a north-south direction and a depth of 900 metres,” said Tornquist in a statement on Thursday.

The company’s initial work in 2022 focused on infill drilling a 170-metre gap at the Gate Zone. The result returned high-grade copper-gold-silver intercepts.

Kodiak also reports that it has been drill-testing anomalies northeast of Gate, and it had located a 400-metre-long, parallel mineralized trend at the nearby ‘Prime Zone.’

“We also commenced testing geophysical targets with coincident copper-in-soil signatures in the wider area around the Gate Zone and are pleased that we were able to delineate a parallel mineralized trend at the Prime Zone,” said Tornquist.

Importantly, Tornquist underlined that the new mineralized trend crystallized further size potential and validated the team’s model of a sizeable multi-centric porphyry system at MPD.

“The company has now expanded its exploration efforts to other high-priority areas like Dillard and Man. We look forward to this next promising phase of work which should lead to more discoveries like Gate and Prime across the 147-square-kilometre MPD Project area,” said Tornquist.

Drill highlights included one hole at the Gate zone, which hit 0.69% copper, 0.46 grams gold per tonne, and 2.22 grams silver per tonne throughout 117 metres, starting from 587 metres depth.

As noted, two holes intersected a new mineralized trend northeast of and next to Gate, now called the Prime Zone. Drilling here has identified porphyry-related alteration and copper-gold-silver mineralization over 200 metres in width, with 400 metres of strike and down to 550 metres in depth.

One hole here hit 96 metres starting at 764 metres depth, at a grade of 0.28% copper, 0.14 grams gold per tonne and 0.81 grams silver per tonne silver.

Kodiak said the 2022 drilling programme remained on schedule. It had completed 33 holes for 21,300 metres as of September 26.

The company has transitioned to testing high-priority targets in the Dillard area. The program will continue evaluating additional copper-gold drill targets across the MPD property throughout the fall.

Near-term catalysts include a new 3D IP geophysical survey currently underway, expected to be completed next month, covering 9 sq. km. and extending southward from the Gate Zone to the Man and Dillard target areas.

The MPD project is near several operating mines in the southern Quesnel Terrane, British Columbia’s copper-gold producing belt. It is near the towns of Merritt and Princeton, in the same neighbourhood as the Highland Valley and Copper Mountain copper mines. The project has year-round accessibility and excellent infrastructure nearby.

Copper discovery potential

In a recent interview with The Northern Miner, Tornquist explained that MPD is a copper-gold porphyry project consolidated from four intermittently explored projects since the 1960s but never as a large, single project. It sits in a proven, mineral-producing belt with mines.

Industry names such as Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO), Antofagasta (LSE: ANTO), and Newmont Mining had all previously sunk more than 50,000 metres of drilling into the respective properties, resulting in showings of copper and gold being confirmed across large areas. The caveat is that most drill holes did not test for deeper mineralization, said Tornquist.

Kodiak’s first drill program in 2019 entailed three holes for 1,766 metres, reaching nearly 800 metres in depth, yielding “excellent” results. The newly discovered Gate Zone had significantly higher grades than historic drilling and the longest mineralized intervals on the project reported to date.

In the follow-up program in 2020, Kodiak made a significant high-grade discovery at the Gate Zone, announced on September 3. The highlight intercept yielded 535 metres of 0.49% copper and 0.29 grams gold per tonne (0.76% copper-equivalent), including 282 metres of 0.70% copper and 0.49 grams gold per tonne (1.16% copper-equivalent). This fueled an $8 million investment by Teck Resources (TSX: TCK.A/TCK.B; NYSE: TCK) for 9.9% of the company shares.

At the start of 2021, Kodiak was fresh off the high-grade Gate Zone discovery at MPD from the previous fall. To accommodate an extensive follow-up exploration program, the company established a field office and core facility in Merritt, benefitting from the ease of access and excellent infrastructure of being located in an established mining and resource area.

Drilling began in March, and a second drill rig was added in June. The 2021 drill program of 21,675 metres focused on extending the Gate Zone discovery by systematically evaluating the associated copper-in-soil anomaly of approximately one kilometre in length.

Tornquist said drilling consistently delivered significant high-grade intercepts within broad envelopes of lower-grade mineralization. Over the year, the company increased the Gate Zone’s strike length by almost eight times.

“Mineralization has been intersected to date over 50 metres in length, down to a depth of 850 metres and across a width of 350 metres, dimensions typical of other large, multi-centre copper porphyry deposits in British Columbia,” said Tornquist.

The Gate Zone remains open in several directions. With several high-profile team members from the Discovery Group onboard with Kodiak, including founder and chairman Chris Taylor and mining entrepreneur John Robins’ backing, the company plans to test several other porphyry centres with similar discovery potential and value impact as Gate.

Like its junior peers, Kodiak Copper’s equity has been hammered lower by unprecedented interest rate hikes, stubbornly high inflation and geopolitical instability. At 50¢ per share, Kodiak’s has set a new 12-month low, giving it a market capitalization of $27.8 million.