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 wholly owned Copper Hill project, both located in Arizona, to a subsidiary of Kay Copper.
The proposed transaction involves the creation of a new private company, called NewCo, which will subsequently apply for listing on the TSX Venture Exchange (TSXV).
The transaction, still under negotiation, requires several 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 NewCo shares at a par value of $0.25 ($0.34 Canadian) per share for their respective projects.
Kay Copper, which is currently private, will undertake a three-way merger with NewCo.
Upon completion, NewCo shareholders will exchange their shares for Kay Copper shares, with the goal of listing on the TSXV.
Financially, NewCo plans to conduct a simultaneous funding round, aiming to raise a minimum of $2.9 million at $0.25 per share.
Funds will be held in escrow for the advancement of the project and will be released once all regulatory approvals are met.
Once the transaction closes, Kay Copper is projected to have approximately 70.3 million shares outstanding.
The ownership distribution will likely see Kodiak and Teck each own 28% and existing Kay Copper shareholders 9%, with the remaining shares distributed to new financial participants.
The Mohave project covers a 17 km² area in Mohave County and features potential porphyry copper-molybdenum-silver mineralization similar to nearby mining sites, although no drilling has been conducted since 2011.
Copper Hill, a 35 km² site, lies within a prolific mining district with underexplored porphyry targets identified by recent Teck exploration.
In addition to receiving shares of Kay Copper, Kodiak and Teck plan to enter into investor rights agreements with the company.
Additionally, Teck expects to obtain offtake rights for certain future concentrate production, pending final 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 into a new company, Kay Copper.
“With two multi-target projects set to be drilled this year, Kay Copper will be well positioned to pursue a growth and value creation strategy.”