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Kutcho Copper (TSX-V: KC)(OTC: KCCFF) CEO Vince Sorace on Advancing the Flagship Kutcho Copper Project, British Columbia, Canada, toward a Positive Construction Decision
Gerardo Del Real: This is Gerardo Del Real with Junior Resource Monthly. Joining me today is the president & CEO of Kutcho Copper Corp. — Mr. Vince Sorace. Vince, it's been a bit. We were overdue for a catch-up. First and foremost, how are you, sir?
Vince Sorace: I'm doing great, Gerardo, and thanks for having me on again.
Gerardo Del Real: Let's get right into it. The reason I have you on — and I reached out yesterday and we had a pretty lengthy conversation — Kutcho Copper has been a staple in the Junior Resource Monthly portfolio; Junior Resource Monthly, of course, being the paid service.
And the reason it's been a staple despite a tough couple of years share price wise is because of the value of the asset, which, at today's copper prices, correct me if I'm wrong, commands an NPV somewhere around the C$700M mark, give or take a little bit.
When I contrast that with the market cap, sub-C$20M, and I see that the asset is in a jurisdiction that's top-notch, and that's becoming increasingly important. And then when you and I had a conversation, you mentioned to me that 2025 is going to be a pivotal year for Kutcho in the sense that, look, for the last couple of years, you've been biding your time and the company has done a good job maintaining the treasury, and you just raised some money. You’ve been wanting to get out there and really tap into the vast exploration upside that Kutcho presents.
And so when you told me that you're fully focused on realizing shareholder value in 2025… and, look, I'll be honest, I've heard whispers of potential M&A behind the scenes, and I said, let me have you on and let me get an update out to subscribers because I think, again, at the current valuation, I'm a copper bull, and I think China is going to be stimulating in a massive way here over the next several months and quarters, and I think Kutcho is in prime, prime shape to benefit from that.
I say all of that to say, why the heck do you have a C$17M market cap, and how the heck are you planning on changing that this year?
Vince Sorace: Well, you touched on it; we've been pretty quiet the last couple of years. The market has been quiet; sentiment in the market, as everybody knows, has not been at its best, you know, capital, etc.
And I tend to, we do, it does get tough at times; the proverbial saying, pushing a rope uphill… so at times we stayed quiet. I had the opportunity to potentially go out and raise a bunch of money and do the drilling that we wanted to do. But when the markets are quiet, it was a decision around dilution… it was a decision around what would the post-impact be on the share price given dilution, etc. So we took that decision to do our work behind the scenes.
There was still a lot of work going on post Feasibility Study, engineering enhancements to the project, and target work-ups for a drill program. So we really took that time to get our ducks in a row, and we're there now. And I do believe 2025 is going to be a better year for our markets.
I agree with you on the copper outlook, and I'm starting to sense and feel a bit of a sentiment shift in the markets. So I think this is the year that we start to get going again. And the market cap is, in my opinion, enormously undervalued for this asset. So we're hoping here to get started pretty quickly and get back out there and start to get this story moving again.
I think this will be a year that we do move the needle on this company. There have been multiple conversations around some sort of strategic deal. Again, we were sensitive to market cap and also we'll be putting out some news with respect to the targets that we've been working up. They were very compelling to the work that we did… so further news around that.
The exploration potential on top of this, already, call it, well-valued asset, is exceptional. And I think people can refer to previous press releases with respect to the targets, especially Esso West, that, if we tap into some mineralization there, that's a game-changer for the company. So this is what we're going to be focusing on here in short order in 2025.
Gerardo Del Real: Can we talk a bit, for those not familiar with the Kutcho story and the asset and the studies that have gone into this… I mean, you're in a top-notch jurisdiction, you have studies on the asset, and, again, you're trading as if you're an exploration company with nothing.
Can you just give us an overview on the asset and what's already there before we talk about the exploration upside?
Vince Sorace: Of course. I mean, we've got, as you mentioned, an asset in British Columbia… so an extremely safe jurisdiction. We've got a Feasibility Study completed on the project, which, essentially, prior to a Construction Decision, is one of the biggest, call it, de-risk studies in the mining space that you perform on an asset.
And we've done, at multiple price points, at US$4/lb copper, for example, we've got an after-tax NPV of C$536M; at US$4.50/lb copper, an after-tax NPV of C$688M. So, well-valued from a project perspective, not being reflected in the market cap, in my opinion. We've got strong financial support with Wheaton Precious Metals in there and a streaming agreement with them. Lots of good existing infrastructure.
This is remote but not remote from the perspective of we've got a haul road; we'll be upgrading a trail to a haul road onsite. We're 400 kilometers down a paved highway to existing port infrastructure. So that's in place. And a very defined permitting process in British Columbia; again, that safe jurisdiction. So the project itself, and I do firmly believe that this, at some point one day, will be a mine. It's a good asset.
Gerardo Del Real: What comes next? We talked exploration upside… and I can't overemphasize enough that this is a VMS (Volcanic Massive Sulfide) system. And we know that these systems don't just yield one deposit or two deposits at a time. They tend to come in clusters. And I know we chatted a bit about being conservative the past several years while the market turned.
Again, I'm a copper bull. I think we're going to get a pretty spectacular run here in 2025 in regards to the copper price. And I think companies with assets in top-notch jurisdictions are going to do very well; hence, the reason you and I are having a conversation. But as far as the exploration upside, can you explain that a bit?
Vince Sorace: Yes, and to your point, and I think everybody can do a little bit of research on this to find that, typically, VMS districts, at least historically, have yielded a lot more than the initial discoveries.
And the Kutcho land package is set up for that. And the discoveries that have been made and the ore-bodies that are there, the three right now, geologically speaking, there is much more potential for additional discoveries. Now, we've taken that to the next level. We ran some pretty intense geophysical programs around the existing ore bodies and property-wide, and we've come up with some amazing, amazing additional drill targets.
Again, we'll be speaking more about those soon, and it lends itself to this perspective or potential that you said. And we've identified where these potential targets could be. They're drill-ready. Basically, we've already identified the targets, where we would drill them, and how we would drill them. So, ready to go.
And I'll just touch base, again, on one of the most compelling targets, which I would consider more of a brownfields target, is the Esso deposit. One of the three lenses that we've defined as part of the mine plan, which is the highest-grade lens and the smallest lens of the three. In the past, there was some work done, and we've always surmised that there's potential for an extension to that lens itself; that ore-body itself.
And that's where we've keyed up on a lot of our work. And we call that the Esso West target. Now, there's historic drill holes that were done decades ago that we believe have clipped this ore-body a little down dip, a little underneath it, plus the geophysics, plus other targeting techniques. There's something there. We’ll drill-test that, and if it comes up with similar grades to Esso. Right now, these are just images but it's looking to be multiple times the size of Esso.
Again, if we tap into a target like that, the Esso deposit is probably worth about half of the value of our project. So that's why it makes for such an exciting opportunity to drill that target. And again, if we do tap into that similar mineralization as Esso, it would be a game-changer for the scalability, value, and size of the project.
Gerardo Del Real: I know we just got through tax-loss selling season. I know the last couple of years have been tough. I know that you've been biding your time. I think 2025 is going to be a breakout year for Kutcho Copper. I think it's dirt cheap.
And again, I think the rest of the year is going to be kind to shareholders and especially newer shareholders that come on board at these prices. I don't think these prices are going to last for very long. Anything to add to that, Vince?
Vince Sorace: I agree with you. I mean, a lot of times, as investors, all of us, you evaluate your downside risk versus upside. As you said, trading at a C$17M market cap here. Listen, there's always risk in markets. But I just don't see too much potential on the downside. And again, as you suggested, it's upside, and it just becomes a matter of how much.
Gerardo Del Real: Vince, looking forward to having you back on. You touched on the M&A a bit, and you mentioned that there's the potential for that. Can you comment at all on the approach the company would take given the low market cap right now?
Vince Sorace: Again, part of the holdback has been the market cap. We want to try to do something to address that. And as far as what we're looking for with respect to M&A, and this has been the case over many years, is looking for, obviously, something that is accretive, something that Kutcho, as a project, whether that's a benchmark project, can lend itself to building out the next, call it, mid-tier copper producer in the space because in that space, there aren't many. And when I say mid-tier, I don't mean the Lundin's or the First Quantums. Something just a little below that.
There's a lot of opportunity there to put a couple of assets, or two or three assets, like Kutcho, together, and, I believe, building a thriving copper producer. That's something we've always had our sights on over the years. Hard to find, hard to do because there just aren't that many good assets out there anymore in the world. So we keep our eyes open for that.
And then, obviously, there are other strategic opportunities with certain types of investors, whether it's corporates or other types of funds… but there's potential for that too. Again, we're always going to be sensitive to our market cap that we want to transact and what that accretiveness would look like and the upside for the shareholders. That's all very, very important to us. So we will keep our eyes on that ball.
Gerardo Del Real: You have the asset, you're cashed up, and you're in a great jurisdiction. I think you're going to have a heck of a copper market. I'm seeing the incoming president, Mr. Trump, pledging a lot of money for data centers. Data centers are going to require a ton of copper, and so I think it's going to be a heck of a 2025.
Thanks so much for sharing the opportunity with our readers, Vince.
Vince Sorace: Thank you, Gerardo.
Gerardo Del Real: Alright, chat soon.
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