Kermode Resources: Permit in Hand

KLM CEO Peter Bell looking damp on a road paved with copper (and a bit of gold)

Writing copper stories you get a bit of a feel for grade. What’s an economic copper grade? It depends. If you are looking at a big deposit, millions and millions of tons, it can be as low as 0.25% and the 21st century global average grade is 0.6%. People get quite excited with anything over 1%.

My pal Peter Bell, CEO of Kermode Resources (KLM.V) and his faithful propecting partner Justin Deveault (911 Exploration), working at Mt. Sicker just outside Duncan BC, have been seeing rock which grades 8-15% copper on an XRF. At surface, exposed by logging roads and stretching at least 300 meters across the mountain.

Until recently, the exploration work and sampling had to be done with hand tools (apparently, a backpack drill, so long as it is handheld, is a hand tool.) Obviously, this limited KLM, although Deveault has managed to stock pile 15 tons of sample material including drill core.

All this changed when 911 was granted an exploration permit by the BC government on April 11, 2025. This permit allows 911 to remove up to 1000 tons of rock per year from the area and use machinery to do it. “There are a total of 45 shallow trenches planned, with each one 10 metres long, 2 metres wide and 1.5 metres deep. The trenches cover an area 400 m long by 90 m wide.”

Bell is quoted in the release as saying,

We started by permitting a trenching program because it is the most direct way to pursue business development opportunities that follow from digging abundant high-grade copper in outcrop with convenient logistical access.

This is not quite a bulk sample but, if the material in the trenches shows anything like the grades encountered in the hand sampling, that would be the logical next step.

To give a sense of the potential of such a trenching program, in May, Canadian Critical Minerals (CCMI.V) reported “trucked 1,437 dry metric tonnes of sorted mineralized material to New Afton and the Company received a provisional payment of approximately USD$358,000 for the May 2025 shipments. The mineralized material sent to New Afton graded 3.06% Cu, 0.78 g/t Au and 22.9 g/t Ag”.

Note the copper grade. Note as well that KLM has both gold and silver credits in the material it has assayed to date. I gave Grok a version of this problem using 1000 tons of 10% copper and similar gold and silver credits and similar milling charges: USD $510,876.

Not bad for a sub-million dollar market cap company digging exploration trenches. (And yes, I am aware that there is no processing facility on the Island and New Afton is 484km, a ferry ride and 6.5 hours away. When Mt. Sicker was last mined the rock was sent down the mountain by an aerial tramway and then by train to a smelter in Ladysmith.)

The general point being that if the trenches yield 10% copper rock with gold and silver credits that rock is worth $500 USD/ton. Even 5% CU would make economic sense.

The old timers who mined at Mt. Sicker basically chased rich veins into the mountain. A mine plan for the KLM claims would likely be a bulk mining scenario where the mineralized blanket would be peeled off the side of the mountain. Add an ore sorter on site to reduce the waste rock to be transported and a very efficient mining operation would be possible.

Kermode itself has had trouble raising money. Very much a wait-and-see situation for investors. However, a few days ago, a huge overhang was cleared in the market. Over 15 million shares hit the market and were purchased. The speculation is that these are shares which became free trading from a property purchase in Ontario back in April. Market participants knew that these shares were likely to be sold ASAP and they were.

Now that these shares have been cleared, the path is open for KLM to be rerated. The challenge is to raise money at this tiny price. Dilution is on the cards, but that is relatively unimportant given the potential of the Mt. Sicker property. KLM managed a partially successful private placement in June raising $19,000. Realistically, Bell needs $100,000 to go to the next level at Mt. Sicker.

(Disclaimer: Peter Bell is a friend. I own shares in Kermode and may buy or sell at any time. This is not investment advice. Do your own due diligence. Call Peter.)