February 15th, 2021 | 10:25 CET
BYD, Kodiak Copper, Geely - the clock is ticking!
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"[...] If we pursue our goals conscientiously, the market will adjust its valuation accordingly, I am sure. Often, all it takes is a trigger. [...]" Ryan McDermott, CEO, Phoenix Copper
The new energies are in desperate need of copper. Wherever electricity is produced and transmitted, copper is found. The energy transition is fueling the high demand for the red metal. While cars with internal combustion engines contain 18-49 pounds of copper, hybrid electric vehicles contain about 85 pounds. Battery electric vehicles bring it up to an incredible 183 pounds of copper. However, the problem is that there are relatively few copper projects at the moment.
One up-and-coming player in the copper market is British Columbia-based explorer Kodiak Copper. The 100% owned MPD project is located in the Quesnel Trough, surrounded by already producing mines like Copper Mountain, Highland Valley and New Afton and therefore has an excellent infrastructure. In addition to the British Columbia project, Kodiak Copper has another copper project in Arizona with excellent infrastructure.
A lot will happen at Kodiak Copper in 2021. It will start as early as mid-February. Here, the results of the remaining 5 drill holes from the 2020-program are eagerly awaited. The Company completed last year's program at the end of December in the Gate Zone with 9 drill holes and a total of 6,698 meters of drilling. The initial assay results received in September were nothing short of groundbreaking. If the remaining results are similarly positive, the market should also reward this.
Following the latest results in the fall, Kodiak Copper welcomed Tech Resources as a new major shareholder in a CAD 12.7 million private placement. Canada's largest copper producer now owns 9.3% of Kodiak. With a total of CAD 14 million in cash, an extremely ambitious target has been set for 2021. The Canadians plan to spend the funds on a whopping 30,000 meters of drilling as well as further geophysical and geochemical surveys, prospecting and geotechnical studies. They are also planning further exploration at the Mohave copper-gold porphyry project in Arizona in the second half of the year.
The clock is ticking
After the share price exploded to over CAD 3.35 following the first successful results, a consolidation occurred. At the moment, the volume in the share is increasing again. The share price is currently quoted at CAD 1.85, still below the private placement level, which took place at CAD 1.95. If positive results regarding the remaining 2020 wells are announced this week or next, the share price should continue to trend firmer. In the long term, Kodiak is well-positioned, firstly because of its promising projects and secondly because of its exciting shareholder structure. The electric car manufacturer BYD is also well positioned.
The Chinese Company counts none other than investor legend Warren Buffett and his Company Berkshire Hathaway among its shareholders. Now it is known that Buffett is one of the winners of the electric car revolution. In addition to BYD, Berkshire Hathaway also owns shares in General Motors. Buffett's Company has made a USD 6 billion profit on the two stocks in less than five months. Whether the "Build Your Dreams" story continues in 2021 will be exciting.
Tesla is well ahead in electric car sales, with 500,000 vehicles delivered in 2020. In second place is the Chinese group SAIC, which sold 250,000 electric cars last year. VW in third place more than tripled the number of pure electric vehicles sold in 2020 to 213,600. Hyundai follows behind with 178,000 pure electric cars sold and BYD with 131,000 e-car sales.
If we look at the competition's delivery figures for 2021, we can see that the growth momentum is slowing. Chinese automaker Geely Automobile, for example, sold a total of 56,326 vehicles. Although this represents an increase of 40% compared to the same period last year, sales only grew by around 1% compared to the previous month, when Geely sold 154,202 units. Geely aims to sell 1,530,000 vehicles in fiscal 2021, representing a growth of approximately 16% compared to the total sales achieved in 2020.
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