KLM: Everything Everywhere All At Once
Yikes. Kermode Resources (KLM.V) CEO Peter Bell had a spare 20 minutes late last Thursday as I was settling in for the Easter Long Weekend. So he dropped by my house.
I didn’t bother taking notes. I just let Peter’s manic enthusiasm wash over me knowing I could root around and find the press releases he was referring to. But the first stop when you want to catch up with KLM is the KLM CEO.CA board. This is a chat board unlike any I have seen at CEO.CA. Bell (@Newton), himself, is there asking and answering questions. But so is Justin Deveault, (@911mining) prospector and videographer who is working on KLM’s Mt. Sicker project and other KLM projects from Quadra Island to Nitnat down Youbou Road and turn right.
(@GeoMilo) Milo Mielniczuk is prospecting for KLM in the Interior of BC and has, somehow, rigged a crusher and a gravity table in his backyard. Gold, silver, graphite. And to be saved for another article.
The CEO Board is simply a conversation, complete with pictures and videos about KLM’s ongoing prospecting activities, option deals, shares for services arrangements and whatever else Bell and his shareholders want to talk about.
And there is a lot to talk about. Here’s a screenshot of March from Stockwatch:
Those are amazing copper values. Usual caveats, these copper values are from grab samples, these are XRF assays, there is no indication as to the “mine-ability” of the locations, there is no indication as to the dimensions of the potential deposits, if deposits these are.
Which, in the very early stages of prospecting, is completely normal. Justin Deveault is out at the various locations initially looking for showings which he can sample and put on a map. But here is the plan going forward when the weather is a bit warmer:
@911mining @Newton Q: What's the plan for 2024? 911
A: More of the same but on steroids, drill till the property looks like Swiss cheese.
When Deveault talks about drilling he is talking about using a “backpack” drill which, at best, can drill 10 meters. Compared to bigger companies which think of 100 meters as a “short” hole, Deveault will be barely piercing the rind of his Swiss cheese. However, at a few locations on Mt. Sicker, there is a lot of rind.
Part of the economics of a particular mineral deposit depends on the actual geometry of the mineralization. Some deposits are hosted in layers of rock which go into a hill or mountain, in other cases the mineralized rock is more like a sheet covering the side of the hill or mountain. A layer going into the hill implies underground mining in most cases. But if it is a draped sheet then it may be able to be mined, or really quarried, with little more than an excavator and a bit of blasting powder.
Deveault is aided in his work on Mt. Sicker by the fact the area has been or is being logged. This means roads are being bulldozed through highly prospective areas. Deveault made a video with the enticing title “Entire Logging Road Made With Copper, Silver, Gold Bearing Rocks!” (Video: click this link to go to You-Tube).
Once again, the rocks shown in this video are the sorts of rocks which can host Copper, Silver and Gold. That does not mean they do. However, the XRF assays on the various samples to date are very encouraging.
Bell likes to retell a story from an interview he did with geologist Patricio Varas (currently VP Exploration, Sage Potash),
“But an important thing to remember about this high-grade is that you can sometimes just ship it directly to where it is smelted. You probably don't have to do a lot of processing along the way.
There's a little story that we tell to help explain why we're chasing these smaller deposits with higher grades. There was a deposit called Storliden that was mined by the Lundin Group – one of the first thing they ever developed. Our presentation shows that they invested something like $14 million as capex to get it into production. It wasn't a very big deposit, only about 1.8 million tonnes of material, but in about 2-3 years they made a profit of $300-$400 million. That's not too bad on a $14 million investment.
With good enough grade and decent transportation logistics, the various KLM holdings at Mt. Sicker might well be direct shipped or it might make sense to deploy an ore sorter at site and only ship “the good stuff”.
Which is several years out into the future for KLM, however, Bell’s strategy of finding good prospectors willing to work on a shares-for-services basis is building a portfolio of early stage projects which should attract the attention of more senior companies. Joint venturing, selling an option, selling an entire property, would all pay off well for existing shareholders.
KLM is wildly speculative. But if Deveault keeps hitting consistently high copper grades walking along logging roads, the potential for huge stock appreciation, especially in a metals bull market, is sitting here at $0.02. 5000 shares for $100.
YOLO!
I last wrote about Kermode in December, here’s the link.
[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. Call Peter.]