Kodiak and Teck join forces to launch Arizona-focused copper explorer

Kodiak Copper is partnering with Teck Resources to form a new U.S.-focused exploration company that will advance two early-stage projects in Arizona.

On Wednesday, the two companies signed a letter of intent with Kay Copper, an unlisted reporting issuer, to pursue a three-way amalgamation aimed at establishing the new copper explorer.

Under the agreement, Kodiak and Teck will sell their respective Mohave and Copper Hill projects to Kay Copper. In return, they will receive 20 million shares of Kay Copper at a deemed price of C$0.25 per share.

Upon completion, Kay Copper is expected to have approximately 70.3 million common shares outstanding. Kodiak and Teck will each hold a 28% stake, while existing Kay Copper shareholders will retain 9% of the equity. Subscribers to the two financings are expected to own a combined 35%.

Both the Mohave and Copper Hill projects are exploration-stage, drill-ready assets located within Arizona's prolific mining districts.

The Mohave property covers a 17-square-kilometer area that includes two small-scale historic mines, which operated from the 1950s to the 1960s. The site was last drilled in 2011, and numerous soil and rock geochemical targets, along with geophysical anomalies, remain untested.

Copper Hill spans 35 square kilometers within a porphyry district adjacent to a producing mining cluster. The project saw limited exploration in the 1960s and 1970s, during which three large porphyry centers were identified. Recent work by Teck has highlighted multiple underexplored targets on the property.