As part of the previously announced precious metals purchasing agreement with Wheaton Precious Metals (WPM.TO, WPM), Kutcho Copper (KC.V) has now received a first tranche of US$3.5M (C$4.5M using the current exchange rate). The payment was made right in time before the field season kicks off, and Kutcho Copper plans to spend money and time on more drilling (both for geotechnical and expansion reasons) the Kutcho project.
A second payment of US$3.5M is expected in August, and this means Kutcho Copper will be able to spend the entire C$9M to be received from Wheaton in this summer’s exploration season, paving the way to complete a feasibility study by the summer of next year. In order to make sure the feasibility study could be completed in time, Kutcho Copper also restarted the environmental baseline study at Kutcho. Fortunately the company doesn’t have to start from scratch as it will be able to continue to work with the data provided by Capstone Mining (CS.TO), which previously owned and worked on the project.
Kutcho Copper’s share price has been relatively weak lately, but as Wheaton Precious Metals is living up to its commitment, Kutcho Copper will be able to work throughout the summer using Wheaton’s money in an attempt to confirm (and if possible, improve) the economics of the Kutcho Copper project. As a brief reminder, the after-tax NPV5% is approximately C$368M which compares very favorably to the current C$24M market capitalization of the company. It’s now up to CEO Sorace and his very capable team on the ground to close this valuation gap.