Kodiak Copper Discusses Latest Drill Results and 2021 Exploration Program

0:11 Hello everyone and welcome to Kodiak Copper's live investment Summit today hosted by 6. We are joined today by President and CEO Claudia Tornquist. Claudia will walk us through a company presentation and then we'll be accepting questions live. You can submit your questions on the Q&A panel on the right hand side of your screen at any time during the summit and as always this summit is being recorded and will be available on six.com afterwards. And without further ado, I'll hand it over to you, Claudia.

0:41 Thank you, Dasha. Thank you everybody for calling in. For CodeYark 2020 has been quite a year. It's been a really, truly transformative year for the company. We made a discovery at our MPD project and we have a lot more in store for 2021. It should be an equally as exciting year and I will tell you more about that shortly. Before I dive into the presentation please keep in mind that I will be making forward-looking statements and you can find the relevant guidance on our website.

1:24 As a start, I have here the famous Lassonde curve, which I'm sure many of you know. The curve shows when in the life cycle of a mining project, value is generated for investors. And I've chosen this graph to illustrate where we are with Kodiak. Kodiak really is about discovery. And discovery is one of the phases where value really is created for shareholders. The second being when a mine then is built and produces. But we are really in this first bump of the curve. We've only really just entered the discovery phase. I've drawn this yellow rectangle on the slide. We made our maiden discovery last year.

2:20 Lots more discovery potential this year and going forward. Lots more drilling planned and so I'm confident we'll be able to move our investors and shareholders up the value curve through the discovery phase.

2:39 Why are we in copper? The demand for copper that's coming our way in the next years and decades is really quite extraordinary. Simply said, anything with the name, with the word green in its name is very copper intensive, whether that's electric cars, whether that's solar, wind. The green revolution requires a lot of copper. And with all the plans that governments, car manufacturers, et cetera, have in place, there's just a lot of copper demand on the horizon. The Rio Tinto CEO said it best in his words, to enable any plausible growth in green technologies, the world will require more copper in the next 25 years than in the last 500 years.

3:37 So a lot of copper demand on the horizon. What does the flip side look like, the production, the supply? Here on this slide, you see a forecast of copper production. It's forecasted to peak in 2023, in 2 years' time, and then decline. This chart includes the producing mines, projects that are currently in development, projects that have already been discovered. And after 2023, there's just not very much in the pipeline anymore. The last decade or more, There have been very few discovery, major discoveries in copper. And the discovery pipeline is at an all-time low. So there's simply not much copper there to fuel this, satisfy this big demand that's coming up.

4:33 So something we'll have to give. It bodes well for higher copper prices. I think generally analysts are very much in consensus that copper prices will have to rise and more copper will have to be found. And that's exactly the business we are in with Kodiak. Before I speak about our project, I would like to speak about the team behind the company. Let me start with Chris Taylor, our founder and chairman. Chris is a geologist. Many of you will know him from Great Bear, our sister company, which he also founded and made a great success. Great Bear is one of the major gold discoveries in recent years in Canada and the world for that matter.

5:31 So fantastic success for Chris. Many people think of him as a gold guy because of Great Bear, but Chris's training actually as a geologist was with imperial metals and he explored for copper porphyry, which is exactly what we do for the first 9 or 10 years of his career. So he really knows his porphyry and having him as our technical lead is really invaluable. Myself, my background is more on the business, financial, commercial side. I worked for many years for Rio Tinto as a general manager. Also did some work on some of Rio Tinto's copper projects, for example, Escondida, the world's largest porphyry mine, or Oyo Tolgoi, also a very large porphyry mine.

6:23 Last but not least, John Robbins is also an important part of our team. John is a shareholder and an advisor to the company. Many of you will know John. He's a very well-known, successful mining entrepreneur in Canada. And John has put together the Discovery Group, of which Kodiak is part.

6:47 You see on this slide the companies that form the Discovery Group. It's a great group of companies and people. Great Bear is part of Discovery, Bluestone Resources, Fireweed, Zinc. We all work out of the same office, or at the moment virtual office, and it's a great network. It gives Kodiak a great access to whether it's contacts, whether it's technical expertise, whether it's capital markets expertise. I feel very fortunate to be part of Discovery and I firmly believe that being part of Discovery makes Kodiak a much stronger company than it would be just out there on its own.

7:36 So that's some background to our company. Now I would like to introduce our MBD project to you, where we made a discovery last year. And as a start, I have a video that gives an overview. Kodiak Copper is located in British Columbia's prolific copper belt known as the Quenelle Trough which runs through the south of the province. Kodiak has caught the market's attention with a new copper gold discovery at its MPD project. MPD is very accessible. It's a three-hour drive from Vancouver near the towns of Merritt and Princeton. Infrastructure and accessibility is obviously very important for economic potential and future development. What's great about the MPD project is its location.

8:23 We are here in southern BC where you can work year-round and in a very established mining area. There are a number of large mines nearby, for example Copper Mountain or also Highland Valley, New Afton. So it's a very established mining area and everything you need for an exploration project is right at our fingertips which makes our work very cost-effective. One of the things I noticed when we were reviewing the NPD project initially was the presence of copper oxides over many kilometers on surface. So what it indicated was that we were sitting on top of a major porphyry system and certainly the right type of rocks that indicated that there could be a major discovery to be made. This project has the potential to host a major copper porphyry discovery.

9:08 And of course, with the drilling that we've done recently, we've shown that that's the case. Now, on initial review of this project, What was really impressive is that we had over 100 drill holes over 10 kilometers and all of these holes have copper in them. And when we're looking at the rock we saw the right types of rocks and the right types of features that indicated we could be sitting on top of a major copper system. The MPD project was drilled historically since the 60s, so for over 50 years, and most of this historic drilling was very shallow, almost all only down to between 100 and 200 meters, and that is where we saw the opportunity. So we drilled deeper, we drilled down to over 800 meters and that's where we got our first discovery hole right here at this location. It was a hole that was mineralized top to bottom and had in the middle a very nice high-grade zone.

10:01 That was the first time that we saw that in this large porphyry system there are higher grade zones present. This is some of the best-looking drill core that has been drilled in this part of British Columbia. Now we're located here, we're in Merritt and that means that in all the areas around us we have copper mines in both directions. What you typically see in this region is about a third of the grade. The grade that we've drilled here on the copper and the gold side is 3 or 4 times higher than many of the mines in this area. The types of alteration that we see, the potassium feldspar alteration, the silicification, the presence of chalcopyrite, the presence of boronite, these are all indicative features of a strongly mineralized copper center. We've made a great start and had some fantastic high-grade results early on in our drill program. We have now gained tech resources as a major shareholder. So now we have our work cut out, we have a large 10 square kilometer area of historic drilling and have only poked deeper holes into one small corner of it. That means lots more drilling to come and lots more potential for our shareholders to be unlocked. It'll be an exciting time for Kodiak going forward.

11:23 So this was a quick overview of MPD. Let me dive a little bit deeper. You see on this slide where the project is located. It's a very established mining area. Copper Mountain, a large copper porphyry mine, is 30 or so kilometers to our south. Highland Valley, Tex, large porphyry mine, 50 kilometers to our north.

11:49 And being in such an established mining belt is obviously a great advantage, whether that's now in our, for our exploration work, which is very cost effective, or also looking down, looking out into the future for the economics of a potential mine, that's obviously a big plus. So great place, we can work year round, it's very easy to get to the project. You literally turn off the highway, couple of minutes on the logging road, and you're at the drill site. As I mentioned in the video, the project has been drilled historically for over 50 years, sporadically by a number of different companies on a number of different smaller claim packages.

12:41 We have now for the first time the entire claim pack and the 2 points, 2 important points to take away from the historic work are, 1, copper and gold was drilled over a large area, 10 square kilometers in total. That's the area of the small dots, black dots you see on this map. And very importantly, all of this historic drilling has been shallow, mostly only between 100 and 200 meters. And that's where we took a different approach. We drilled deeper, we drilled down to 800 meters, and we were successful right off the bat.

13:30 We drilled last year in summer, this hole that you see here on the slide. It's the hole we released on the 3rd of September, which was really a game changer for the company. Our share price jumped. We financed and raised $12.7 million. Tech invested in our company to the tune of $8 million. And it really and truly changed the nature of our company. And what did we drill? You see here our hole number 4. And the yellow, sorry, red and green bars on the drill trace show the copper and gold content. It was a very high grade intercept that we were able to release.

14:24 More than half a kilometer long of 0.76% copper equivalent. Just to put this into perspective, the mine grade of our neighboring mine, Copper Mountain, is 0.24% copper. So this is significantly higher than what's mined next door. And within this long, more than half a kilometer long, intercept of high-grade mineralization, there was a significantly higher grade core of 282 meters of 1.16% copper equivalent, and even a 45-meter intercept of 2.75% copper equivalent. So a fantastic result very early on in our exploration work.

15:13 And obviously, tech investing 8 million on the back of these early results is a great vote of confidence into our project and we're very pleased about that. Since last September when we released this result, we had some more. And in fact, just last week, we received the last results from our small 2020 drill campaign. On this slide, you see a bit of a summary of what we drilled. I know this is a busy slide. Let me just take you through what you see here. It's a cross-section that shows several of the holes we drilled, a fan of holes at different angles, and then to the left, the vertical hole. It's a hole from another drill setup.

16:06 The dark green and red markings show the high-grade mineralization and the points to take away from from this image are we intersected this high-grade zone very consistently with all these holes over long intersections. And we intersected mineralization over a width of 300 meters approximately and down to a depth of 800 meters, which is already quite substantial given the small number of holes we've only drilled at NPG. So that's last year's program. In total, we drilled 6,700 meters, a small initial drill program.

16:57 And for 2021, we have a significantly larger program planned, up to 30,000 meters of drilling. And this plan map here shows what we will be doing in 2021. You see at the top of the map the black lines, that's the drill traces of our 2020 program. And the pink areas are a large copper and soil anomaly which define our target area. So what is, as you see, we've only drilled the northern tip of this large target area, 1 kilometer in length, And we've only tested to date just over 100 meters of this length. And this year, we will be working our way systematically south to drill more of this large copper and soil anomaly.

18:02 So that's our plan for the gate area where we made our high-grade discovery. And we then have also other target areas. On this slide, you see on the left side the gate zone, which I just talked about. And then towards the middle of the map, at the bottom you see Dillard, which is another target area, which has very much the same signature as GATE. It is a magnetic low and a large copper and soil anomaly on top and some historic drill results that are very encouraging, shallow.

18:48 So very much analogous to GATE and DILLARD is also very high on our priority list for drilling in 2021. We actually meant to drill DILLARD in last year's program but then we had so much success at GATE that we never got to DILRT, but this year for sure, it's on the list. So plenty of targets, we have our work cut out, it will be a very busy year, 2021. Our drill program this year is more than 4 times larger than what we did last year, so lots of drill results, lots of news flow coming up. We're just in the final stages of preparations for the restart of drilling. We took a break over the Christmas period and moved premises to a larger courtyard in January and we're just about to embark on this year's drill program and the drill will start turning soon.

19:53 Last but not least, our capital structure. A couple of things to point out. We are a very tightly held company. Our shares outstanding are 45 million. Many of our shareholders really like that. We have a full treasury, $14 million or more at the moment. So we are fully funded for all our 2021 work. Our largest shareholders, as I mentioned, is tech resources, which is just over 9%. And board and management also own around the 9% mark. At the bottom, you see our share price. We've been hovering around the sort of 170, 80 mark in recent days and as I mentioned the bills are about to start turning again soon and lots of news will be coming. So I'm confident we can make this year a good year for our shareholders and there's lots of value that we can create at the drill bit.

21:03 So that's in a nutshell where we are and where we go with Kodiak.

21:09 And I'll now be very happy to take any questions you might have. Great, thank you so much, Claudia. Let's just jump right into the Q&A. So if anyone has any more questions, please remember to submit them under the Q&A tab on the right hand side here. But we'll start with some questions that have been emailed in. So what will be the next catalyst for Kodiak Copper? Well, the next catalyst is coming very quickly, which is the start of our drill program that should be in a matter of days. And then we'll be off to the races. And we'll then be generating drill results and news throughout the years.

21:56 Wonderful. And why did tech get involved so early in the game? Well, clearly, Tech liked what they saw in our early drill results. We had them visiting our site last year in summer. And then when we announced the drill results, the results I showed, hole number 4,

22:22 they liked those results and decided to invest. They obviously know the area very well. Their mine, Highland Valley, which is a large copper-pore-free mine, is in the same belt, 50 kilometers to our north. And having them come in as a partner is fantastic, because obviously they have a lot of technical expertise and it's also a great vote of confidence into our project that they decided to come in at this early stage with a large investment of 8 million dollars. So I'm very pleased to have them as a partner, and it's a great vote of confidence in the size potential of our project.

23:10 Absolutely. Does Kodiak intend to build a mine, or Are you more interested in a takeover? Well, that's a good question. I think at this stage, we are a discovery play. So really it's all about making more discoveries and moving our shareholders up this Lassonde curve and create value at the drill bit. So that's what really what it's about for Kodiak for this year, for probably the year after. And then looking further in the future, if you look at the companies that operate copper porphyry mines, they are mostly large, or all of them actually large companies because porphyries are large projects and large mines.

24:03 So the more likely scenario, I think, will be that eventually a major would become interested in us. But as I said, that's sometime in the future. And we'll certainly be motoring down for now the road to drill more, make more discoveries for our shareholders. Wonderful. Amit is asking, any thoughts on mineralization appearing mainly at deeper depths and implications on being economic? Well, you have to keep in mind that we've only drilled just over 10 holes on the project that are any deeper than the shallow historic drilling. So really we don't know yet where the highest grade zones are, how close they come to the surface. There's still a lot of work to be done. We only have some initial drill results.

24:58 Now, looking around us, There are 2 porphyry mines that are big open pit mines. There is 1 copper gold mine, New Afton, which is the higher grade underground scenario. So both of these mine types are present in the belt. And yeah, we'll see which way we will go. Certainly at this point, there's a lot of historic shallow drilling with copper and gold in those drill results. Some of our drill holes had mineralization right from the bedrock surface. So we will be looking further where the high-grade mineralization comes the closest to the surface.

25:46 And yeah, so see certainly a lot of sort of near surface potential as well. Great, James is asking how many meters are planned this year at Dillard and Dillard East and any plans to add more drills? Well we have in total planned up to 30,000 meters, but that, as always in exploration, is also a moving target. We could increase our meterage if we're successful. And We will be drilling both gate and Dillard and potentially also Dillard East. And we'll start with 1 drill rig in the next couple of days to get our winter operations established with the plan then to add drill rigs later on and then drill the several rigs.

26:40 Great. Roger was wondering if you could, he says that you didn't mention Mojave in Arizona, will that be explored at all in 2021? That's a good question. I sometimes have people ask me whether we are now selling Mojave or what are we doing with it. Because obviously, we've been in the last year 100% focused or actually 150% focused on MPD. But we do like Mojave. It is a very, very exciting project like MPD. It's in an established mining district, very accessible, historically drilled, but not yet figured out.

27:26 So we want to drill it and we have some exploration planned for Mojave this year. And we'll move it forward probably in the later part of the year. All right, thank you. Daryl is asking, are there any indications of silver? And have core been assayed for silver? I assume that at MPD, yes, there is silver in our results and yeah, so copper, gold and silver are the main metals in our mineralization. Wonderful. What amount is expected to be received over the year from the exercise of options in 2021? Well, we have options and warrants.

28:16 And warrants money will probably be more than option money that we'll receive, I would assume, because we have some tranches of warrants come due this year. We have already had a lot of warrants exercised and have received those funds in the last couple of months. And we have, I believe, $2 million approximately more in warrants outstanding that are coming due this year. Wonderful. Tommy is wondering if you have made any arrangements or agreements with the indigenous community in the area and if something could stop you to continue the exploration. Well, we work very closely with the First Nations bands and organizations in the area. In fact, before we even touch any ground, disturb any ground, We liaise with them and have them survey the property and do heritage surveys, etc., environmental surveys.

29:25 So, we work very closely with them. It's also part of the permitting process. And it's a very constructive relationship in the area. Because it's a mining district, the First Nations are very familiar with mining. So they're technically really astute, really understand mining and exploration. And it's been a real pleasure working with them so far. And I'm sure as our program grows, we will be working more with them going forward. Wonderful. Suresh is asking, how long before you will have resource estimates? Will you need to continue drilling next year to establish resource estimates or can it be done by the end of next year? By the end of this year, sorry.

30:13 That's A difficult question. It's a bit of a how long is a piece of string. What I know for sure is this year will all be about discovery for Kodiak. And the more we discover, the further out in the future will be a resource, which of course is a good problem to have, but for the time being for this year what our shareholders should be expecting from us is a lot of discovery and a lot of results and then yeah resource definition is sometime in the future. Great. Chris is asking, how much does a drill hole cost? Well, we're fortunate to be in a very accessible area and an established mining exploration area. So all services, all equipment, everything is available locally and you can literally drive with the drill rig on the back of a truck to the drill pad. All of that makes exploration very cost effective.

31:17 And we are very much at the lower end of drill costs if you look across various jurisdictions. We estimate approximately somewhere north of $200 per meter for drilling. And that's all in, including essays, including everything. Great, thank you. Jan is asking, how green is the copper from an ESG standpoint? How green is the copper from an ESG standpoint? That's a good question. I have to say ESG is something I have been thinking a lot and we have been thinking a lot. Obviously, Canada is a good jurisdiction that way for sustainable mining.

32:08 And we have also, or are making an effort with CODIGEC to really put a lot of focus on sustainability, whether that's working with First Nations, with local communities, where we are doing a lot of work, whether that's environmental, where we've already started some baseline work very early on in our exploration work, or whether that's also health and safety. So ESG is, I think, crucially important for a mining exploration company, And it's certainly something very much at the forefront of our minds. Thank you.

32:55 Jan is asking, are you going to print more shares this year? Well, we're fully financed for the work we have planned, which is of course a great situation to be in. And we will be opportunistic when it comes to financing. So We'll just see if financing opportunities come our way. If they are beneficial for our shareholders and the creative, then we'll take on more money at the right time. But for now, fully financed, that's the important thing to know. Perfect. So what are your plans this year for the Mojave Project? Could you go into more detail?

33:46 Well, we'll start with some more desktop work. We've already done some interpretation of the historic work, and we'll be doing some more. And we'll then go to site to probably do some more mapping, sampling, and potentially geophysics to just get ready for the first drill program. And yeah, so still some preparatory work to be done and then drilling is the next step after that. Great, thank you. Jason is wondering about the timing on some things. He's asking, is there still a backlog for essays and how long to drill a hole and how long after drilling do you expect to release results?

34:44 With respect to essay results, we have received all our assays for our 2020 drill holes. So luckily no more delays for us. I understand the labs are still very much blocked up and other companies are still waiting for their drill results. We are at the moment just talking to labs, because obviously this year we have a very large drill program. So we are in a bit of a better negotiation position. And so hopefully we'll be able to negotiate some preferential rates and also timeframes with the labs. What was the other question? The timing for drill holes. So yeah we drill, as I mentioned in the presentation, deeper holes.

35:34 And historically, many of our holes went down to around 800 meters, which means it takes some 2 weeks or so to drill a hole. And so, yeah, as I said, we're starting soon. I can't wait to get that little bit back turning. It should be in the next couple of days. And then we're off to the races. Perfect. Thank you. Someone wants to know, how much is the insider management ownership? We have just under 9%, I think it was 8.6% that's owned by management and board. Perfect. A few more questions here.

36:19 Jan is asking, are there other interested parties next to tech, other than tech? And are you working with SPA Gold Discoveries to track copper or other? So about the first part of the question, there's definitely a lot of interest in good copper projects from major copper producers. I know that much. We've certainly had a number of people knock on our doors and interested in our projects. Now, the second part of your question, I'm not sure I understood that. Could you say that one again? Yeah, I can read it again.

37:07 And we'll always have the opportunity to fill out a survey afterwards and connect directly to Jan if we're unable to answer the question in the summit. But he asked, are you working with spot gold discoveries to track copper? I'm not sure what spot gold discoveries is so interested in learning more. It's good to point out that after this, we'll be sending out a survey and everyone attending will be able to leave your contact information for the contact, CAUTI at Copper team to reach out to you directly. And you can ask all your questions there as well. So hopefully we can answer this one at a later time. So we have just one more question here.

37:55 While the gate numbers are undoubtedly very good, there is some thought that what you are finding is too deep for open pit. Can you comment on that? Yep, I commented on that a little bit already before. Important to keep in mind is that we've only drilled a couple of holes, just over 10, that are deeper than the historic drilling. So really, we still have a lot more to explore, and we don't know yet where the mineralisation is, the highest grades, where it's closest to surface. That's all what we will have to find out this year. It will be a very exciting process.

38:43 And yeah, as I said before, there is a lot of near surface copper and gold from historic drilling and also some of our holes. So I think certainly there is an open pit type scenario is a possibility. And yeah, there are also higher grade underground mines in the same belt. So this is certainly also a possibility. But yeah, I think for now we are certainly thinking a bit and where can we find high-grade mineralization and shallow depths. Great, well lots to look forward to this year. Well that's all the questions we have for today. I'd like to thank everyone who submitted their questions.

39:32 I'd also like to thank you, Claudia, so much for taking us through the presentation and the live Q&A. If you didn't get a chance to ask your question or if you think of 1 after the summit, as I said, we'll be emailing out a short survey and the Kodiak Copper Corp team will be happy to follow up with you directly. You can also find more on their website at kodiakcoppercorp.com. And I'll hand it back to you, Claudia, just for the final word. Well, thank you, Dasha, for organizing the webinar. Thank you, everybody, for calling in and also for the many good questions. It's a real pleasure to have lots of questions and being able to answer those. Yeah, it'll be a very exciting year for Kodiak. As I said, it's only a matter of days before we drill again. I'm genuinely excited and really looking forward to report back with our drill results in the near future.

40:28 Thank you. Thank you so much.