RE:RE:RE:RE:Today’s CloseThanks for sharing DrillMonkey! They do have the same thesis that we do. Preproduction microcap resource companies are always a risk, because they need a great resource, the right location and jurisdiction, great leadership, and also ready access to capital (terribly hard right now with high interest rates, tight credit markets, and very low share prices which leads to smallish capital and more dilution from any sale of new shares.
That said Kodiak has potential in my opinion. It would be nice if thy find more high grade deposits in the remainder of 2023 drill results and also the upcoming 2024 drilling campaign. After 2024 it will be time to move ahead and develop a path to production. The most likely would be Teck buying out the company and developing the mine. Reward to current shareholders would be very good though not spectacular. I do not think they can develop a mine by themselves in this environment.
But they do tick a lot of boxes. Sizable resource that needs a bit more proving. Good location and mining jurisdiction. Good leadership. An interested major (Teck) as a major shareholder that has kept and increased its investment (and is the best path to get access to capital to advance the project, though it likely would entail sale of company long before production.)
I have been adding a little KDK recently as the share price has been in this rather brutal downtrend, not unique to Kodiak but pretty widespread in microcap preproduction resource companies. I never have more than 5-10% of my portfolio in this space (special situations,turnarounds in the Peter Lynch terminology). But I try to always have investment about five of these companies. If two are 5-10 baggers, one stutters along but gets stalled out, and two go belly up, it still works fine and has potential to add significantly to overall returns. (10k each in 5 stocks for total investment of 50k . Two go to average of 75k each, one is sold at 8k, two go to zero. Then I have turned 50k into 158k, tripling my money. And there can be real wealth creation if one of them goes up 20 or more times. ). But investing in microcap preproduction resource companies is not for the faint of heart. And should be in my opinion a small part of a well diversified investment approach. Best to all.