Ms. Claudia Tornquist reports
KODIAK COPPER - ANNUAL INVESTOR LETTER
Dear fellow investor:
Two thousand twenty was indeed our year of discovery.
Kodiak Copper Corp. had a truly momentous and transformational 2020. We reported our first results from a discovery at what could be a world-class copper-gold porphyry system at the MPD project, raised almost $18-million and attracted a large, respected industry participant as a significant shareholder, all resulting in a manyfold increase in our share price and valuation. I am excited to report that 2021 is shaping up to be an equally exciting year but would first like to extend a heartfelt thank you to Kodiak's dedicated team, our shareholders, supporters and local first nations who all contributed to our company's success.
You could say that our small initial drill program at the MPD copper gold porphyry project in Southern British Columbia met with success right "out of the gate." In January, Kodiak was able to announce results from a new discovery at what we coined the Gate zone. The discovery hole was mineralized from bedrock surface to over 800 metres in depth, with intervals having grades comparable with the mined grades at neighbouring copper mines. This was the first sniff that there was potential to be unlocked below the shallow historic drilling at MPD, a validation of the approach taken by our exploration team led by Kodiak's chairman and founder, Chris Taylor.
Our Gate zone discovery was followed by a name change in March to Kodiak Copper to reflect the company's new focus on the red metal. After closing a $2.8-million private placement and a share consolidation we set out to follow up on our early exploration success.
Drilling at the Gate zone recommenced in summer and despite the global pandemic, we were still able to operate due to MPD's location in an established mining district in Southern British Columbia with excellent infrastructure and accessibility. We could rely on local crews and carry out our program as planned.
Kudos to our vice-president of exploration, Jeff Ward, and VP, operations, Andy Berry, who executed the program successfully and safely on a tight budget. We were encouraged to see that all drill holes continued to intersect prospective, sulphide-bearing alteration and decided to extend the program beyond the planned 4,000 metres.
The first assay results received in September were nothing short of transformative. Kodiak announced initial results from hole MPD-20-004, which returned a central high-grade interval of 282 metres of 0.70 per cent copper and 0.49 gram per tonne gold (1.16 per cent copper equivalent), one of the most impressive copper-gold intercepts from early-stage porphyry drilling in British Columbia. The market response was swift and positive, and in October we closed an upsized $12.7-million private placement. As part of this financing, we were able to welcome Teck Resources as a significant shareholder, following its investment of $8-million for a 9.9-per-cent shareholding. Further results included hole MPD-20-005 which -- like our fourth hole -- returned a high-grade centre, in this case 192 metres of 0.74 per cent copper, 0.48 g/t gold and 2.75 g/t silver (1.21 per cent copper equivalent). Importantly, both holes show a broader mineralized envelope of significant size with overall mineralized intercepts of 535 metres for hole four and 515 metres for hole five.
By the time our drill program wrapped up in December our team had completed a total of 6,698 metres of drilling in nine holes at the Gate zone. We expect more assay results in the next few weeks from the remaining five holes of the 2020 program. Exploration by Kodiak and historic work show all the hallmarks of a large, well-developed, multicentred alkalic porphyry system at MPD, with a footprint of over 10 square kilometres. The newly discovered high-grade zone at Gate is part of a wider, significantly enriched copper-gold envelope which has already been intersected by Kodiak over substantial drill widths and to a depth of over 800 metres.
Two thousand twenty-one will be an eventful and news-rich year with a significantly larger exploration program planned at MPD. Kodiak is fully financed for up to 30,000 metres of drilling as well as further geophysical and geochemical surveying, prospecting, and geotechnical studies. The drill program will commence early in the year with one drill rig, with plans to add further rigs as work progresses.
To date only 125 metres of the approximately one-kilometre-long copper-in-soil anomaly at the Gate zone has been drilled, which in turn is part of a larger regional magnetic low with three kilometres of strike length that extends to the Man zone in the south. Two thousand twenty-one will see systematic stepout drilling along this trend at Gate, aiming to expand both the central high-grade zone and larger copper-gold mineralized envelope. Other high-priority target areas slated for drilling include the Dillard and Dillard East zones which, like Gate, are characterized by large regional magnetic lows, extensive copper-in-soil anomalies and encouraging historical drilling.
While the drills were turning at MPD in 2020 we monetized our non-core Trapper project in Northern British Columbia and sold it to Brixton Metals. Our Mohave copper porphyry project in Arizona is still a key part of our portfolio and we plan to explore it in 2021. In addition, we always review opportunities to add quality copper porphyry projects in good jurisdictions to our portfolio as we grow Kodiak and create value for our shareholders.
The copper price has rallied from lows of just over $2 (U.S.) per pound in March, 2020, to more than $3.50 (U.S.) by year-end. With strong economic growth from China, massive global infrastructure stimulus packages and megatrends like electrification and green energy, the fundamentals for copper demand have never looked stronger. Paired with supply disruptions, record-low inventory levels, and a lack of new mines and development projects, this creates a perfect scenario for strong copper prices. Analysts are already calling for $4 (U.S.) copper and beyond. With Kodiak having $14-million in the treasury, a tight share structure with less than 45 million shares outstanding, and the backing from a world-class mining company in Teck Resources, 2021 looks bright indeed. We invite you to join us on the journey ahead.
With the best wishes for a happy and prosperous year 2021.
Claudia Tornquist, president and chief executive officer
Jeff Ward, PGeo, vice-president of exploration and a qualified person under National Instrument 43-101, has reviewed and approved the technical information contained in this release.
For further information please contact Knox Henderson, investor relations, at 604-551-2360 or firstname.lastname@example.org.
About Kodiak Copper Corp.
Kodiak is focused on its 100-per-cent-owned copper porphyry projects in Canada and the United States. The company's most advanced asset is the MPD copper-gold porphyry project in the prolific Quesnel trough in south-central B.C., where the company made a discovery of high-grade mineralization within a wide mineralized envelope in 2020. Kodiak also holds the Mohave copper-molybdenum-silver porphyry project in Arizona, near the world-class Bagdad mine. Kodiak's porphyry projects have both been historically drilled and present known mineral discoveries with the potential to hold large-scale deposits.
The company also holds the advanced-stage Kahuna diamond project in Nunavut. Kahuna hosts a high-grade, near-surface inferred diamond resource and numerous kimberlite pipe targets.
Kodiak's founder and chairman is Chris Taylor, who is well known for his gold-discovery success with Great Bear Resources. Kodiak is also part of Discovery Group led by John Robins, one of the most successful mining entrepreneurs in Canada.
We seek Safe Harbor.
© 2021 Canjex Publishing Ltd. All rights reserved.