Kodiak Copper’s first MPD resource shows mid-scale potential in BC

An initial resource estimate for Kodiak Copper’s (TSX-V: KDK; US-OTC: KDKCF) MPD project in British Columbia positions it as a mid-tier open-pit project sitting in the southern area of the province’s copper-gold rich Quesnel Trough region.

The resource gives MPD about 83 million indicated tonnes grading 0.28% copper and 0.15 gram gold per tonne for 519 million lb. of contained copper and 390,000 oz. gold; and 356.3 million inferred tonnes at 0.24% copper and 0.11 gram gold for 1.8 billion lb. of copper and 1.2 million oz. of gold. MPD is about 40 km south of Merritt, which is 270 km by road northeast of Vancouver.  

The estimate, released Tuesday, enhances Kodiak as a potential takeover target as larger miners seek viable copper projects in safe jurisdictions to meet rising demand for the wiring and plumbing metal. The management team has previous success, including Chair Chris Taylor who founded and led Great Bear Resources. It was acquired by Kinross Gold (TSX: K; NYSE: KGC) in 2022 for about $1.8 billion.

The West, Adit and South zones at MPD are included in the new resource following a partial estimate in June that focused on the Gate, Ketchan, Man and Dillard zones.

‘Consistent with leading projects’

“Overall, MPD’s maiden resource shows considerable scale, strong growth potential and grades consistent with leading copper porphyry projects in North America,” Kodiak President and CEO Claudia Tornquist said in a release.

“With multiple deposits, MPD offers unique optionality and flexibility for future development pathways. Add to this its strategic location in a well-established, low-cost mining district in southern British Columbia and MPD stands out as a highly promising project with clear economic potential.”

The three zones covered in the completed estimate feature shallow mineralization, a quality that is expected to support low strip ratios in future economic studies, Kodiak said. West and Adit in particular host high-grade mineralization from surface, and South is a large bulk tonnage deposit of more than 1 km in length that is under-explored.

Grade, tonnage comparison

Looking broadly at the resources of copper-gold and copper porphyry projects elsewhere along B.C.’s Quesnel Trough, MPD compares closely with Hudbay Minerals’ (TSX, NYSE: HBM) Copper Mountain by grade, though its overall resource is larger than MPD’s.

The New Afton underground project, started by New Gold (TSX: NDG) which was bought by Coeur Mining (NYSE: CDE) last month, has much smaller tonnage than MPD but higher grades. Teck Resources’ (TSX: TECK.A, TECK.B; NYSE: TECK) Highland Valley, the largest copper mine in Canada, has a far bigger resource but MPD has a slightly higher copper grade.

The MPD resource used a cut-off grade of 0.2% copper-equivalent. A sensitivity case to assess risks or profitability with a such low cut-off is typical for producing mines in southern B.C. that have higher tonnages and contained metal, Kodiak said.

Exploration next year at MPD is to focus on resource expansion and testing multiple target areas, potentially adding significant tonnage to the deposits, Kodiak’s Taylor said. The company didn’t specify how many metres it plans to drill nor a budget for it.

Kodiak shares fell 1% to 71¢ on Wednesday morning, for a market capitalization of $67.7 million. The stock has traded in a 12-month range of 33¢ to 89¢.