Kodiak Copper has signed a non-binding letter of intent (LoI) with Teck Resources and Kay Copper to establish a new US-focused copper exploration company.
As part of the transaction, Kodiak plans to transfer its wholly owned Mohave project, while Teck intends to transfer its fully owned Copper Hill project, both situated in Arizona, to a subsidiary of Kay Copper.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The proposed transaction involves the creation of a new private company, referred to as NewCo, which will subsequently apply to list on the TSX Venture Exchange (TSXV).
The transaction, still under negotiation, requires various approvals including regulatory consent and due diligence.
The deal is expected to close in the third quarter of 2026.
Kodiak and Teck will each receive 20 million shares of NewCo at a nominal value of $0.25 (C$0.34) per share for their respective projects.
Kay Copper, currently unlisted, will undertake a three-cornered amalgamation with NewCo.
Upon completion, NewCo shareholders will exchange their shares for shares in Kay Copper, aiming to list on the TSXV.
In financial terms, NewCo plans to conduct a concurrent financing round, aiming to raise a minimum of $2.9m at $0.25 per share.
The funds will be held in escrow for project advancement and released once all regulatory approvals are fulfilled.
After the transaction concludes, Kay Copper is projected to have approximately 70.3 million shares outstanding.
Ownership distribution will likely see Kodiak and Teck each holding 28% and existing Kay Copper shareholders 9%, with the remaining shares distributed among new financing participants.
The Mohave project encompasses a 17km² area in Mohave County and presents possible porphyry copper-molybdenum-silver mineralisation similar to nearby mining sites, although it has not seen drilling since 2011.
Copper Hill, a 35km² site, lies within a prolific mining district with underexplored porphyry targets identified by recent Teck exploration.
In conjunction with receiving Kay Copper shares, Kodiak and Teck plan to enter Investor Rights Agreements with the company.
Furthermore, Teck expects to secure offtake rights for certain future concentrate production, contingent on definitive documentation.
Amid all this, the completion of the transaction is still not guaranteed.
Kodiak president and CEO Claudia Tornquist said: “While Kodiak remains firmly focused on the MPD project in British Columbia, we are excited to combine our Mohave project with Teck’s Copper Hill project in a new company, Kay Copper.
“With two projects with multiple targets ready to be drilled this year, Kay Copper will be well positioned to pursue a strategy of growth and value creation.”
