Kutcho Copper (TSX-V: KC)(OTC: KCCFF) CEO Vince Sorace on Developing A Billion Dollar Copper Project



Gerardo Del Real

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Kutcho Copper, one of the better copper speculations at current levels. It's Mr. Vince Sorace. Vince, how are you today?

Vince Sorace

Vince Sorace: I'm doing great, Gerardo. Good to be talking to you again.

Gerardo Del Real

Gerardo Del Real: It's great to have you back on. I love highlighting stories where the risk reward proposition is so compelling that it makes it easier to pound the table. And in the case of Kutcho, you have a project... A feasibility stage project that has a value with $4.50 copper and $1.57 zinc of roughly $1 billion... I believe it's $931 million Canadian, an IRR of 41%, yet here we are with a market cap of $65 million. So I don't have to be the smartest guy on the street to recognize the value in Kutcho. And, I was taught, when I started in this business to vet share structures and identify compelling entry points. And I wanted to ask you about the weakness in the stock. I know that there's some warrants that are likely coming in and people probably flipping those. Can you share some insights to events, and then let's talk about the project and what comes next.

Vince Sorace

Vince Sorace: Sure, and... Yes, listen, Gerardo, you hit the nail on the head. This is, I think, exceptionally cheap and of good value at these prices. And yes, I can point people to... We've got the tables in our corporate presentation, highlighting the values at $4.50 copper and $5 copper and with zinc trading where it's at right now and looks like that's going to be... Those prices are going to be relatively sustainable as well moving forward now in the future. This is an extremely valuable project trading at ridiculously low multiples right now. And, given the weakness in the market, as you mentioned, yes, we're seeing some warrants being exercised here. These go back a couple of years, they're priced below market.

So, although I would say that we do have... A bulk of those are with very, very good shareholders. They have not indicated that they will be selling stock to exercise their warrants, but there are a few, and it's going to happen and that's what I'm going to attribute right now as this sloppiness of the weakness in the market. Those are out there for another six, eight weeks or so, but then I think it's really going to free up the overhang that we're seeing in the market. And, I would suggest that any of this liquidity down here becomes an opportunity to buy the stock.

Gerardo Del Real

Gerardo Del Real: Well... And again, for me, it's very simple and compelling when I look at being able to identify why the share price is weak, being able to identify the robust economics around it at a feasibility stage. And, oh by the way, you happen to have a pretty deep pocketed friend, and shareholder, in Wheaton, that clearly is supportive of the project. Can we talk about their support and what comes next, Vince?

Vince Sorace

Vince Sorace: Sure. Let's remind everybody that Wheaton just converted a big portion of their debt into Kutcho at 91 cents a share, so that's significant. And they're a significant shareholder in this company right now. And they have no intention of selling stock. I think... They are definitely holders of their stock. And I think you'll see something come out here shortly with respect to their added commitment because they participated... They're warrant holders as well, but they have no interest in selling stock to exercise their warrants. So, significant from their part, they're solid, they're there, they're behind us. And they have a significant amount of capital to contribute to the build of this project as we move down that path.

Gerardo Del Real

Gerardo Del Real: So again, just to be clear, Wheaton is more than happy to exercise or to convert those shares at... What was that price point... The low nineties?

Vince Sorace

Vince Sorace: 91 cents is where we did the debt conversion to Wheaton.

Gerardo Del Real

Gerardo Del Real: And you're trading currently at what... 57 cents Canadian?

Vince Sorace

Vince Sorace: Correct.

Gerardo Del Real

Gerardo Del Real: Again, simple math, simple story, excellent project, great team. I know there's a lot going on behind the scenes. I won't ask you to comment on that, but I do look forward to having you back on, Vince, for more details. I know there's a lot in the cooker there. Anything else that you'd like to add?

Vince Sorace

Vince Sorace: Well, just to remind people, the economics are compelling, we're in a safe jurisdiction in Canada, in British Columbia, the permitting process we're moving through it, that will start moving rapidly. Those are significant de-risk points again for the project. And projects like this... In safe jurisdictions like this, they're far and few between out there. And I believe we'll be very sought after from a number of different perspectives here, moving forward.

Gerardo Del Real

Gerardo Del Real: Couldn't agree more. Thanks for your time, Vince.

Vince Sorace

Vince Sorace: Thank you, Gerardo.

Click here to see more from Kutcho Copper Corp.