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Copper Fox Metals Inc. – Copper Exploration and Development in BC and Arizona

Copper Fox Metals Inc.

Overview

Copper Fox Metals Inc. (TSXV:CUU) is a Canadian resource development company that holds a joint venture with Teck Resources on the Schaft Creek Project in Northern British Columbia, Canada. In addition, Copper Fox, through its wholly-owned subsidiaries, has mineral tenures located in Pinal County, Arizona (the Sombrero Butte Copper Project) and in Gila County, Arizona (the Van Dyke Copper Project).

The Schaft Creek Project is a joint venture, whereby Copper Fox owns a 25% working interest and Teck Resources Limited owns 75% and is the operator. A feasibility study on the property indicates Proven and Probable Mineral Reserves totaling 940.8 million tonnes grading 0.27% copper, 0.19 g/t gold, 0.018% molybdenum and 1.72 g/t silver containing 5.6 billion pounds of copper, 5.8 million ounces of gold, 363.5 million pounds of molybdenum and 51.7 million ounces of silver; (Recoverable CuEq 0.46%).

The Project is based on a conventional open pit mine. Ore will be mined and processed at a rate of 130,000 t/d for a 21-year life-of-mine (LOM). Ore will be processed in a conventional flotation plant, producing a copper concentrate containing gold and silver, and a separate molybdenum concentrate. The Project will require a permitting and construction period of 57 months, at an initial capital cost of Cdn$3.26 billion.

 

Investment Highlights

  • Significant exposure to copper and gold
  • Geopolitical stable mining jurisdictions
  • Drill programs planned
  • Working capital of $11.5 million which includes $7 million cash
  • Joint venture with Teck Resources on the Schaft Creek Project in BC

Key Projects

Schaft Creek Project

schaft-creek-infrastructure-3d-view

Schaft Creek is an advanced Porphyry Copper-Gold- Molybdenum-Silver deposit in Northwest British Columbia. The Project is at an advanced stage of exploration, with a preliminary feasibility study completed in 2008 and a feasibility study in December, 2012.

Located approximately 61km south of the village of Telegraph Creek and 120km southwest of Dease Lake, the Schaft Creek Project is 45 km due west of Highway 37 and 278km from the Port of Stewart, America’s closest deepwater seaport to China.

Copper-Fox-Teck-Schaft-Map small

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The Project comprises approximately 55,779.56 ha encompassing portions of the Schaft Creek and Mess Creek Valleys, and Mount LaCasse situated in the Cassiar/Liard Mining Division of northwest British Columbia.

First discovered in the late 1950s, Schaft Creek has an extensive exploration history including the completion of 410 drillholes totalling 98,445.82 m. The property is a porphyry copper-gold deposit, consisting of two distinct zones: the Liard (also referred to as Main Zone), and the Paramount Zone. The two mineralization zones contain significant copper, molybdenum, silver and gold mineralization.

Feasibility Study

  • Initial mine life of 21 years at milling rate of 130,000 tonne per day – open pit mine at 2:1 strip ratio;
  • Initial Capital Cost totals $3.26 billion, which includes contingencies of $374 million;
  • Sustaining Capex $59 million per year over 21 year mine life;
  • 5 year pre-production period (includes permitting, road, power line and facilities construction);
  • Proven and Probable Mineral Reserves total 940.8 million tonnes grading 0.27% copper, 0.19 g/t gold, 0.018% molybdenum and 1.72 g/t silver containing:
  • 5.6 billion pounds of copper, 5.8 million ounces of gold, 363.5 million pounds of molybdenum and 51.7 million ounces of silver; (Recoverable CuEq 0.46%)
  • The feasibility study identified at least three areas that could significantly enhance the economics of the Schaft Creek project; Within the pit shell there is 171.2 million tonnes of inferred resource grading: 0.25% copper, 0.16 g/t gold, 0.018% molybdenum and 1.58 g/t silver which for purposes of the feasibility study must be treated as waste rock including, within Recoverable CuEq 0.40%)

Joint Venture with Teck Resources

On July 15, 2013 Copper Fox announced the joint venture with Teck Resources Limited. Under the terms of joint venture, Teck will:

  • Pay three milestone related cash payments totaling $60 million, first $20 million payment received.
  • Fund 100% of the joint venture costs incurred prior to a production decision up to $60 million.
  • Fund Copper Fox’s pro rata share of any pre-production costs in excess of $60 million and the subsequent two cash payments payable to Copper Fox (see above) will be reduced by an equivalent amount.
  • Fund any additional costs prior to a production decision, if required, by way of a loan to Copper Fox.
  • Teck has agreed to use all reasonable commercial efforts to arrange project financing for Capital Costs upon a production decision being made, including Copper Fox’s pro rata share of the Capital Costs without dilution to Copper Fox.

On December 19, 2013, Copper Fox reported additional diamond drill results from the Schaft Creek copper-gold-molybdenum-silver project. According to CEO Mr. Elmer Stewart, “We are very pleased that the 2013 drilling program extended the mineralization between 100m and 300m east of the current resource block model and has also tested several blocks of inferred resources in the Paramount zone. The drilling results support the interpretation that the mineralization in the Paramount zone could extend to the east past the limits of the current block model. The extension of the mineralization into that area of the Paramount zone that was previously categorized as waste in the feasibility study prepared by Copper Fox and the testing of the inferred resource block within the pit shell could have a positive effect on the economics of the Schaft Creek project.”

Copper-Fox-Drilling-Map

Highlights of the drilling program are as follows:

  • DDH SCK 13-432 (azimuth 270) located 200m south of DDH CF415-2011, intersected 0.399% copper, 0.444g/t gold, 4.39g/t silver and 0.028% molybdenum over an interval of 76.5m starting at a core length of 81.0m. This higher grade interval is included in a 356.3m long zone from 64.2m to 420.5m that averaged 0.215% copper, 0.196g/t gold, 1.71g/t silver and 0.015% molybdenum,
  • DDH SCK-13-433 (azimuth 090) was collared on the same location as DDH CF411-2011, intersected two zones of mineralization including a 108.0m interval that assayed 0.187% copper, 0.029g/t gold, 0.025% molybdenum and 1.16g/t silver starting at a core length of 387.0m and a 41.0m interval that assayed 0.149% copper, 0.033g/t gold, 0.53g/t silver and 0.026% molybdenum starting at a core length of 521.0m,
  • DDH SCK-13-435 (azimuth 270) located 120m east of DDH CF-418B-2011 intersected a 357.8m interval that assayed 0.363% copper, 0.108g/t gold, 1.26g/t silver and 0.023% molybdenum starting at a core length of 239.0m. This interval contains two higher grade intervals; the first, a 43.6m interval that assayed 0.648% copper, 0.241g/t gold, 1.52g/t silver and 0.043% molybdenum, and the second, a lower 42.9m interval that assayed 0.591% copper, 0.072g/t gold, 2.16g/t silver and 0.057% molybdenum,
  • DDH SCK-13-439 (azimuth 270) located on the west side of the Paramount zone intersected a 29.0m interval that assayed 0.144% copper, 0.027g/t gold, 0.98g/t silver and 0.003% molybdenum starting at a core length of 38.0m.

Van Dyke Copper Project

Desert Fox Minerals Co., a wholly owned subsidiary of Copper Fox, holds a 100% interest on the Van Dyke copper project, a 1,100 acre property in the Globe-Miami Mining district 90 miles east of Phoenix, Arizona.

Copper-Fox-Van-Dyke

The mine is reported to have produced 11.8 million pounds of copper between 1929 and 1945 from copper oxide mineralization with a reported grade of 5.0 % copper. Between 1968 and 1980 Occidental Minerals Corporation drilled 70 exploration holes (sixty-two of which encountered measureable copper mineralization) on the Van Dyke property of which 46 of these were used to estimate a historical resource of 112,000,000 tons at a grade of 0.52% copper.

Occidental also completed preliminary metallurgical test work to determine if the copper mineralization in the Van Dyke deposit was amendable to in-situ leaching, with a pilot program of two 1,000 foot deep holes, 75 feet apart. The reports on the in-situ leaching metallurgical testwork indicated copper recoveries up to 80% using hydro fracturing to improve fluid circulation.

In 2014, a NI 43-101 compliant resource estimate for the Van Dyke copper deposit is planned. A follow-up 25 hole in-fill drilling program has been proposed by Moose Mountain Technical Services (MMTS) after a site visit and preliminary review of the historical data. The program consists of twinning seven historical drill holes, re-submitting pulps from original drill core samples and splitting the mineralized core interval for certain historical drill holes to confirm the historical analytical results.

Sombrero Butte Copper Project

The Sombrero Butte property consists of 3,342 acres in the Bunker Hill Mining District 44 miles northeast of Tucson, Arizona. The project is located 9 miles east of the San Manuel Mine (14 billion lbs Cu), and 2 miles south of Redhawk Resources’ Copper Creek project (7 billion lbs Cu). Both Redhawk and Millrock Resources have recently conducted drilling within 1 mile of the northern property boundary.

Copper-Fox-Sombrero-Butte

The Sombrero Butte property contains at least two main clusters of mineralized breccia pipes which elsewhere in the district overlie associated porphyry copper systems. The mineralized breccia pipes are believed to be associated with one or more underlying porphyry copper systems. At least 25 breccia pipes were located in the Sombrero Butte area and between 2006 and 2008; 34 drillholes were completed to test 8 of the mineralized breccia pipes. The mineralization in these breccia pipes remains open at depth.

In 2013, two large copper-molybdenum geochemical anomalies with associated potassic alteration were identified over a strike length of 4 kilometres. According to Mr. Stewart, “These targets exhibit an outer limonite zone (interpreted to be due to oxidization of pyrite) and an inner zone consisting of potassic-sericite alteration and sporadic tourmaline veining, vein controlled copper-molybdenum mineralization and multiple mineralized breccia pipes; all positive features suggesting the existence of a porphyry copper-molybdenum environment. Preparations for a deep penetrating geophysical survey are underway to collect chargeability, resistivity and Magnetotelluric data over these target areas.”

Management

Elmer B. Stewart, P.Geol, MSc. – Chairperson of the Board, President and CEO
Mr. Stewart has a Masters Degree in Geology and 35 years of domestic and international experience in mining and mineral exploration. Mr. Stewart has been involved in putting five gold mines into production. Mr. Stewart has approximately 22 years of experience at the senior management level for various companies listed on the Toronto Stock Exchange and Toronto Venture Exchange.

Catherine Henderson – Chief Financial Officer
Ms. Henderson has 20 years of leadership experience in diverse financial operations, including accounting, corporate tax, financial reporting, internal auditing, labour relations and information systems management. Brought on board as the Controller in 2004, Ms. Henderson was promoted to CFO in 2011, and is in charge of providing both operational and programmatic support to the organization.