KLM: Bootstrapping Copper? on Vancouver Island

Not Actually Kermode Resources CEO Peter Bell hauling a load at the Mt Sickler Lenora Mine

My friend Peter Bell has been busy with Kermode Resources (KLM.V). Fresh off a 10:1 share rollback, Bell has been doing deals with prospectors where the prospector gets shares for an interest in a property and for working on that property. Very, very, old school. Right back to pre-WWI prospecting and mining deals.

Which is wonderfully appropriate given that KLM’s most recent deal involves claims on BC’s Mount Sicker, site of a massive sulphide discovery in the late 1800s and three mines, most notably, the Lenora mine. The Lenora mine produced 321,886 grams of gold, 8,706,817 grams of silver and 3,226,034 kilograms of copper from a total of 71,650 tonnes mined implying a gold grade of 4.49 grams per ton. You can read the details, as I am sure Peter Bell has, at BC Minfile # 029B 001

Mt. Sicker is a few miles from 911 Mining’s principal, Justin Deveault’s home base of Duncan BC. Much of the area is road accessible.

Kermode announced a Letter of Intent agreement to acquire an option on the Mount Sicker properties on October 7, 2023. It is a very typical KLM agreement with no cash payable at all for the first year of the option and limited cash for the following five years. The bulk of the compensation is in KLM shares.

The KLM/911 Mining communications strategy is very basic indeed. 911’s Deveault, goes out to a property and videos interesting geology. He then posts the video to You-Tube. We’ll get to the video in a minute. But first the results of a little digging.

This is not the first time the Mount Sickler claims have been optioned. An outfit called Sasquatch Resources (SASQ.C) optioned the project back in 2021. Part of that option has been allowed to expire while Sasquatch focuses on “reprocessing waste rock and tailings at the Mount Sicker property”. Sasquatch is keeping five claims where the waste rock and tailings are located. It appears KLM got the others.

Importantly, prior to relinquishing its overall option, Sasquatch had obtained data from “a previous Airborne Pulse Time Domain Electromagnetic geophysical survey (TDEM survey)” and “Sasquatch hired Aeroquest Mapcon Inc. to complete an airborne laser imaging, detection and ranging (LiDAR) survey over the Mount Sicker property, and results were recently delivered to the Company. This survey provides Sasquatch with a very high-resolution representation of the surface area of the property, and will provide the Company with a far more accurate understanding of the size and shape of certain important geological features, such as faults, dips, tailings ponds and the like.” (link)

The combination of the TDEM information and the LiDAR mapping has meant that Kermode and 911 Mining are not flying blind on Mount Sicker.

Like most coastal mountains and hills Mount Sicker is covered in trees, “fibre” as they like to call it in that part of the world. To harvest the fibre you need logging roads which are, essentially, bulldozed out of the side of the mountain. As my pal Paul Gray, VP Exploration at Victoria Gold, likes to say, “Every road is a trench” so the logging roads on Mount Sicker are, essentially free exploration trenches.

Here’s the full video (beware, it really is 25 minutes of walking down a logging road looking at, well, rocks):

If you prefer the text version - albeit without any paragraphing - Peter has posted it at CEO.CA.

The takeaway is that the logging road has cut through a lot of mineralization over 2.5 kilometres. “disseminated pyrite, chalcopyrite, and stringers of pyrite and chalcopyrite running through” says Justin Deveault as he walks along banging rocks and revealing interesting material.

In a massive sulphide deposit, chalcopyrite is usually seen as an indicator for copper and, sometimes, gold. Scroll back up the page to the Lenora mine and you’ll be reminded that while there was gold and silver, there were literally tonnes of copper.

Towards the end of the video, Deveault says “here's the kicker -- a road was just built 200 metres below this, and we have the same mineralization peeking out as the center zone and around here with the pyrite chalcopyrite.”

I wrote about Kermode and Peter Bell back in June 2022. I called the article “Kermode Resources: The Joy of Hyper-Speculation". One of those joys is a stretch of ground with the right sort of mineralization.

Is this the right sort? And how much is there? And what grade? And how far into the hill does the mineralization extend? Right now, all Kermode can say is that it has a 2.5 kilometre showing of mineralized rock.

I would not be surprised to see Deveault out with his portable drill. He can only go a few meters into the side of the hill (Update: over at CEO.CA Deveault states that he has gone up to 8 meters in with a backpack drill.), but if the rock continues mineralized as he drills in, that will be another data point. Peter will have to scrap together the money to pay for assays - labs don’t work for shares. But assuming money is available, it is quite possible that KLM will be able to press release actual, if short hole, results complete with grades.

A few good, short, holes and the currently $0.02 shares could rocket to $0.07 and beyond. With the rollback, I need to see $0.20 to break even. Here is the odd thing: if, by some chance, Deveault’s short holes grade gold on the order of the Lenora mine, that is totally achievable even in the current terrible market. And if the market firms up KLM could easily be caught in the updraft. Which is what hyper speculation is all about.

[Disclosure: Peter Bell is a friend. I own shares in Kermode Resources (KLM.V) and may buy more or sell some or all at any time. This is not investment advice. Do your own due diligence.]