Tag: Kutcho Copper Corp.
Kutcho Copper announced that it has entered into an amended agreement with Wheaton Precious Metals Corp. (TSX:WPM, Not Rated) whereby Kutcho would eliminate all of its outstanding liabilities. Through the amended agreement (Precious Metals Purchase agreement or PMPA), Wheaton is expected to convert its debt into an additional precious metals streaming interest and shares of Kutcho. We view this as a slightly positive arrangement with Wheaton that clears up Kutcho’s balance sheet as it begins to advance project development activities following the positive FS released in Nov/21 (read more). The agreement suggests to us that Wheaton is confident in the merits of the project and supportive of its development. We believe having Wheaton as a significant shareholder on Kutcho’s roster is a big boost of confidence in the project and the team at Kutcho.
Kutcho Copper reported results from the Feasibility Study (FS) completed for its 100%-owned Kutcho Cu-Zn project in northern BC. The FS contemplates a 4,500 tpd mining operation, consisting predominately of open pit mining with underground longhole stoping, with processing involving ore sorting followed by conventional flotation to recover Cu and Zn concentrates. Over the 11-year production life, the project is expected to recover 533 Mlb Cu, 841 Mlb Zn, and significant Au and Ag by-products. In our view, the FS represents a major de-risking milestone for Kutcho. With more up-to-date cost and production information now available, we have adjusted our mine model to reflect changes made since the 2017 PFS.
We are initiating coverage on Kutcho Copper Corp. (TSXV:KC) with a BUY rating and C$1.90 target price. Kutcho’s 100%-owned flagship Kutcho Cu-Zn project is located in northern British Columbia. The company recently increased its M&I resources to ~1.1B lb CuEq and announced a newly designed mine plan that contemplates an open pit and underground mining scenario. Kutcho is currently completing a feasibility study (FS) for the project, expected to be released soon. In our view, the main catalyst for Kutcho is its upcoming FS for the Kutcho project. The FS will likely showcase improved project economics as the company has already announced numerous optimizations and an updated mineral resource estimate. We believe now is the time for investors to take notice, as a high-quality FS could help re-rate the stock.
Yesterday, Red Cloud hosted the third and final day of its three-day 2021 Oktoberfest Fall Mining Showcase, which featured 28 presenting companies including our keynote speaker John Ciampaglia, CEO of Sprott Asset Management, and had over 1,000 participants registered in advance of the event. With this note, we want to provide a quick recap of the highlights from the conference for those who were unable to attend the live event. A recap of our Day One and Day Two highlights can be found on our research portal page. Replays are also available on the Red Cloud website.
Kutcho Copper outlined potential open pit and underground expansion and greenfield targets at its 100%-owned Kutcho Cu-Zn project in B.C. Exploration is expected to be focused on the expansion of open pit and underground mineral resources at Main, Esso and Sumac beyond those contemplated for inclusion in the upcoming FS. We like the exploration upside at the Kutcho project as it is known that VMS deposits typically occur in clusters along favourable horizons. In this way, extensive future exploration could potentially grow the Kutcho project into a district. However, in the near-term our focus remains on the feasibility study (Q4/21), which has the potential to re-rate the stock should it demonstrate the project’s viability and attractive economics.
Kutcho announced positive results from ore sorting test work on material from the Main and Esso deposits at its 100%-owned Kutcho Cu-Zn project. ABH Engineering Inc. and TOMRA Sorting Mining completed the test work on a ¾ tonne bulk sample derived from drill core and found that ore sorting could improve the processed grade and reduce the mill feed tonnage of mineral resources. Any possibility to reduce costs from ore sorting should be seen as strictly positive; as such, we believe this technology could enhance the overall economics, and environmental credentials of the Kutcho project.