Kodiak Copper (TSXV: KDK) is teaming up with Teck Resources (TSX: TECK.A/TECK.B) to create a new US-focused explorer to advance two early-stage projects in Arizona.
The companies on Wednesday signed a letter of intent with Kay Copper, a unlisted reporting issuer, for a three-cornered amalgamation to establish the new copper explorer.
As part of the agreement, Kodiak and Teck would sell their respective Mohave and Copper Hill projects to Kay Copper, and in return receive 20 million shares of Kay Copper at a deemed price of C$0.25 per share.
In connection with the transaction, Kay Copper plans to list its shares on the TSX Venture Exchange and complete two separate financings: one is a subscription receipt financing at C$0.25 per share for C$4 million, and another is an C$830,000 private placement of shares priced at C$0.10 apiece.
Upon completion, Kay Copper is expected to have approximately 70.3 million common shares outstanding, with Kodiak and Teck each owning 28%. Existing shareholders of Kay Copper would retain 9% of its equity, while subscribers to the two financings are expected to own 35%.
“We are thrilled to become shareholders in Kay Copper alongside Teck and are confident this new venture has the potential to create substantial long-term shareholder value,” Kodiak Copper CEO Claudia Tornquist said in a press release.
Drill-ready projects
Both Mohave and Copper Hill represent exploration-stage, drill-ready projects within Arizona’s prolific mining districts.
Mohave covers a 17-km
Copper Hill is a 35-km
For Kodiak, its focus remains the MPD copper-gold porphyry project in south-central British Columbia, Canada. This year, the company plans to follow up on its initial resource estimate published in December, which outlined 519 million lb. copper and 390,000 oz. gold indicated and 1.8 billion lb. copper and 1.2 million oz. gold inferred.
Shares of Kodiak Copper fell 3.3% on Wednesday, for a market capitalization of C$84 million ($62 million).
