Last week’s huge intersection from Kodiak Copper (TSX-V:KDK) has given a renewed focus to copper-gold projects in southern British Columbia, Canada. Kodiak drilled 282 meters of 1.41% copper-equivalent, including 45.7 meters of 1.41% copper and 1.46 g/t gold (2.75% copper-equivalent) at its MPD Project in southern BC, not too far from Westhaven Gold’s Shovelnose Project and Glencore’s now closed Brenda copper-molybdenum mines.
This drill result and KDK’s high quality management team prompted me to buy KDK shares after last week’s trading halt at C$1.14.
Even after last week’s ~200% surge, KDK only has a roughly C$80 million fully-diluted market cap. With assays pending from hole #5 and hole #6 already underway, KDK shares stand to rise further as the company continues stepping out to the west and approximately perpendicular to the interpreted northerly strike of the mineralized zone.
Kodiak’s new discovery of a high-grade extension to the Gate Zone at MPD is highly significant because it demonstrates the potential that exists in this “mining corridor” of southern British Columbia that already has several producing copper mines such as Copper Mountain and Highland Valley. If one spectacular drill intersection can trigger a ~200% increase in KDK’s share price and add more than C$50 million to its market cap in 24 hours, it begs the question “where is the next potential KDK?”.
One potential answer is GSP Resources (TSX-V:GSPR), a junior exploration company that holds the Alwin Mine Project, adjacent to Teck Resources’ Highland Valley Copper Mine:
Alwin is an intriguing project (with historic copper grades up to 10% copper) whose proximate location to the Highland Valley Mine (2 kilometers) makes it especially appealing. In addition, the Highland Valley open pit is expanding west towards the Alwin property boundary. Highland Valley is the largest open pit porphyry copper-molybdenum mine in western Canada. Alteration and mineralization of the Highland Valley hydrothermal system extends westward onto the Alwin property.
GSPR’s fully funded Phase 1 program at Alwin will consist of 1,000+ meters of diamond drilling designed to test both shallow targets, as well as deeper porphyry targets (similar to KDK’s targets at MPD). GSPR will utilize 3D modelling data to guide the upcoming shallow drilling program to both confirm historic intersections, and to improve definition of the zones. GSPR also expects to drill deeper targets to test beneath 2008 holes 5 and 6 which intersected 0.28% copper over a core width of 21.1 meters and 0.44% copper over a core width of 13.4 meters, respectively.
GSPR has one of the tightest share structures i’ve ever come across with strong insider ownership (25%) and a miniscule free trading float of roughly 6.3 million shares:
GSPR shares have been consolidating on light volume in the mid-$.30s recently. However, I expect the anticipation of drilling, combined with the increased focus on this region of southern BC thanks to Kodiak’s recent success, will result in further share price appreciation over the coming days/weeks.
GSPR CEO Simon Dyakowski moved quickly in 2020 and he has managed to advance Alwin to a Phase 1 drill program on a relatively tiny budget (monthly burn rate of C$20,000). Dyakowski manages the company treasury carefully, after all, as the company’s largest shareholder he has skin in the game and he is aligned with shareholders.
GSPR.V is one of my favorite under-the-radar drill plays that should benefit from the nascent copper bull market, and I intend to add to my position over the coming days.
Disclosure: Author owns GSPR.V and KDK.V shares at the time of publishing and may choose to buy or sell shares of either company at any time without notice.
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