Kodiak Copper Webinar: 2023 Exploration Review & 2024 Exploration Preview - AI Changes Everything
Kodiak continues to eat their elephant one bite at a time as they progress their massive MPD porphyry project. We discuss 2023 results and the impact of VRIFY's powerful new AI tool to be used in 2024
tl;dr:
Claudia Tornquist and Chris Taylor join me again for a live webinar to recap 2023 and discuss their plans for 2024, including using VRIFY’s new and poetntially revolutionary AI modeling system for the first time.
Tickers Mentioned: KDK.V
Index
Part 1: The Interview
Part 2: The Companion Article
Part 3: The Written Summary and Transcripts
Part 1: The Interview
Part 2: The Companion Article
Porphyry systems can be challenging. They can be massive, which is of course why they’re a favourite of majors looking for stable, long-term production. But the size of the prize can be a bit of a double-edged sword here, as they can take immense amounts of drilling to master, and the larger the complex the more this rings true.
And this “blessing and a curse” can be seen on display with Kodiak Copper presently. The good news is that their MPD project does seem truly massive - at least two porphyry complexes are on the property, and there are several km of mineralisation in multiple areas.
Kodiak keeps hitting copper (and other metals) all over their project and keep on generating new targets (now having only drilled 8 of 24). And to their credit, Kodiak has done a good job of proving up significant pounds in the ground here of mineralisation that - at its neighbouring peer mines - are considered economic.
But what the heck does a junior exploration company do with a target this big? These porphyry systems are hungry things - always seeming to need more meters to figure out fully and map out the higher grade zones that become so critical to economic viability.
And it’s here where the market has started to put the pinch on Kodiak a bit. Kodiak came roaring onto the scene on the back of the last true (albeit small) bull run the sector had 3 or 4 years ago and had nice, healthy, sustainable valuations to aggressively drill out a project of this size. And while Kodiak took full advantage of this - to their credit - cashing up big time, it now finds itself in the challenging position of feeding the ever-hungry MPD beast while managing dilution.
Luckily, you can’t really ask for a much better executive team. Claudia Tornquist is n obviously-sharp CEO and Chair Chris Taylor doesn’t really require an introduction in this space. Which
Both Claudia and Chris joined me for a live webinar to discuss their 2023 drill results - the good, the bad, and the ugly - and preview their 2024 plans.
In a nutshell, 2023 did what Kodiak wanted it to do. They successfully made huge (if low grade) discoveries at MPD South that demand follow-up drilling to target those critical high-grade core zones. There might not have been the unexpected, barn burner grades needed to get some love in this tough market, but MPD is unquestionably a larger - and better - project than it was prior to 2023 exploration.
And now, having demonstrated that MPD has a heck of a lot of mineralised areas, and with VRIFY AI modelling bolstering their efforts, Kodiak is returning in 2024 with a plan to drill out some 10,000 meters and hoping to target areas of shallow, high-grade mineralisation that might serve to help Kodiak achieve critical mass and push it to the next level.
Watch the interview above this article, or read the summary below to see the conversation I had with Claudia and Chris about 2023, 2024, VRIFY, and more. And read here to read Kodiak’s own 2024 plans.
Part 3: Timestamped Summary and Transcripts
Timestamps are links to video
Part 1: Reviewing 2023 Exploration
02:00 General Overview of 2023 Drill Program
Drilled 18,500 meters
Moved away from Gate Zone
Drilled 5 new targets Kodiak hadn’t drilled before
Lots of focus on MPD South
03:55 Successes and Struggles
Reminds Chris a lot of his former project Mt. Polley
Finding huge areas of low-grade mineralisation interspersed with smaller (but still large) intersections of higher grade.
Part of the process is delineating the lower grade zones
However this year they were finding higher grade areas very close to surface
Part of the challenge is the size – 20 km of porphyry over two volcanic complexes to explore
Need to do a better job communicating expectations and results to market
07:55 Why did some holes fail to get assays
Failed holes are a normal part of a drill program
Weather at end of season played a role
Down hole conditions were difficult at times – hitting fault zones. Which is a good thing as mineralised zones are often right there too, but they can cause a failed hole and need to move the rig over.
11:15 With hole 18 (525m at .09% CuEq) – what clues do you have that it is the edge of a porphyry and not the center?
Initially this was thought to be only a small, shallow zone.
Obviously not the case now and all the previously separate zones are all part of one big zone.
Rocks are identical to the same spot in the other system. Same core chemistry.
However it is multiple times larger than the gate zone – 3km x 2km
Even if the market doesn’t like it, it was a technical success – same tock types and same alterations.
Gate zone similarly has weakly-mineralised regions, but they’re right next to high grade areas.
Drilling deep is very challenging, especially in early holes. You have to take your above ground data and do your best to aim and drill and then use that drill data to further vector in.
17:10 What evidence do you have that MPD South is a single complex?
Same rocks/same geologic signature
Same geochemical signature
MPD south a little different than MPD north but carry the same similarities – a bit more moly and a bit more silica saturated
MPD South is much larger than what they initially expected but everywhere they drill they’re seeing the right rocks – it is a very big target
Going to concentrate moving forward on uncovering more shallow, high-grade areas
Lots of areas are above BC porphyry Cu cut offs – 031% Cu over 234M at MPD South is a very good hole
Looks to have the potential for multiple open pits in different areas
21:30 Hole 15 at the South (13m @ 0.43% Cu and 659 g/t Ag) – Explain how it fits in your model Part 2: 2024
Hard to interpret much because was only 25% core recovery
Weren’t similar results in holes around it so not too much significance
Porphyries have multiple phases of fluid pulses
Having higher-grade areas is a good sign
Interpret it as a structurally-controlled, late mineralization overprint
Minor target but important enrichment
Part 2: 2024 Exploration
26:10 2024 Exploration Plans Overview
Because of poor market conditions and expensive capital, will see a slightly reduced drill program
Note: 10,000M has since been announced
Plan is to look for closer-to-surface targets
Part 2: Previewing 2024 Exploration
26:10 2024 Exploration Plans Overview
28:30 VRIFY – How much is proprietary black box and how much can you see behind the curtain?
Deeply collaborative and iterative process with KDK’s geologists
Every round of output from the model gets input from us that goes back in to help the machine learning algorithms
Majors are developing similar tools internally
These tools will be used across the industry in coming years
It doesn’t necessarily provide ranked lists of targets – it is still up to the company to decide where to drill.
Almost have to add bias back in after – have to control outputs to make sure you’re staying on point
Has produced new targets and confirmed targets they liked before
33:05 How much human input goes into the modelling system
One of KDK’s directors called it a “superpowered light table”
In some areas of the property, it has 30 different data layers
It looks for patterns and correlations much more efficiently than a human could
Spits out potential targets and explains why
But in the end, it still all comes down to human decision making and how they interact with the ai system
It accelerates the process – completed work that might have taken multiple years
AI is going to revolutionise exploration in the same way 3D computer modelling revolutionised it – to the same dramatic degree.
Still in process of learning it all – kind of life building the plane while flying it.
39:30 What is 2024 priority region for drilling?
Obvious follow-up work continuing from 2023 is part of it
MPD South is a priority
However, will also be returning to MPD North
Shorter holes this year to try to uncover higher grade zones within the long zones of mineralisation they intercepted last year
Finding higher grade at surface is what will really advance this project
There will be holes drilled into brand new targets
42:35 How do you balance drilling aggressively while copper is hot while being defensive when the share price is suppressed?
Weak equity markets mean it is not the time to drill super aggressively
Taking share structure into account is important
However, you can still explore smartly and progress it
44:15 How do you split up meterage – spread things out or concentrate?
Further exploration work to generate new targets does not mean they’re unhappy currently
If not another zone was ever discovered, Chris still thinks MPD is an excellent project
But there are more zones to discover still - geophys anomalies overlaid by Geochem anomalies
Working to be able to produce more advanced modeling
Core difference is finding near-surface targets this year vs proving out depth
47:05 Which 2024 targets are Kodiak-generated vs. VRIFY-generated?
Most are previously generated
However there are brand new targets from VRIFY
They have lots of data and understand this project well now
48:30 Resource estimate at Gate Zone to be expected?
Getting a resource early on Gate was never the plan
They want to demonstrate the trye scale of MPD
Once they can build a resource they feel reflects the potential of the project they will do so
Showing multiple pits and multiple UG mines is their goal
51:15 When can we expect VRIFY details from the south?
In the next update on the drill program, which is soon
Note: It was released the next day
51:50 How is your relationship with Teck?
Very strong – participate in financings
Their technical team helps
They know the region well (have a mine 50 km away)
Kodiak continues to slowly prove out and master the significant scale of its MPD project. Porphyries can take serious amounts of time and meters to figure out and Kodiak has ambitiously and successfully advanced MPD every drill season. Some investors may grow weary of the process - and years of flagging resource sentiment have also hurt Kodiak (as it has every other company in the sector) - but make no mistake that MPD continues to grow. Kodiak’s strong management and technical team are building out the scale majors want. Given time and money to operate, you have to think Kodiak is an odd’s on favourite for M&A work. And that’s about all you can ask for.
Thanks for reading.
-Matthew from JRI
