Good comments GL. I can't say I disagree. I am just cautious. A large low grade poryphry deposit can have lots of 'lbs in the ground' but is vulnerable to time and Capex. I think we are on the good side of these numbers and probably getting better with starter pit options and the rising 3yr average metal prices (prices which I understand will be used in the BFS).

I wonder if GL or any other 'bean counters' out there could comment about the "Real Option" valuation approach discussed in the recent MD&A.

To me, this approach is needed for that ore that can't be reached in the first 25-30-40 years or so. Below the mine outlined in our BFS, is another -BETTER - mine starting at 500m depth or so.

I'd appreciate any thoughts folks have on that. tia

From the Sept 28, 2011 MD&A, pg 4: http://www.sedar.com/GetFile.do?lang=EN&docClass=7&issuerNo=00020511&fileName=/csfsprod/data123/filings/01807010/00000001/k%3A%5Cfilings%5Clivework%5Cwkout%5C32833%5Cq3mda.pdf

Porphyry deposits of the scale to be mined over a number of decades are difficult to value due to the inherent uncertainties in estimating long term costs and metal prices. Recognizing this reality, Copper Fox’s strategy is to reduce the payback period for recovery of the initial capital expenditures and then concentrate on maximizing the cash flow over the life of the proposed mine. The most common valuation method used to determine the value of a mining project is the discounted cash flow method (“DCF”). Using this method, a long mine life results in a longer discount period thus lowering the estimated NPV. It is essential that the initial capital costs are recovered as soon as possible. After recovery of the initial capital costs, the annual cash flow is the primary metric used to value the project. The longer the mine life, the more value is added, hence the need to move Inferred resources into the Indicated and Measures categories to extend the mine life. An alternate method that is now being used to value long term mining assets is referred to as Real Option valuation. This method uses the same input parameters as the DCF method but treats future pricing of metal prices differently due to changes in metal pricing cycles.

Copper Fox’s objectives in the feasibility study are to reduce the payback period for the initial capital expenditures to around three years or less if possible while at the same time develop a mine plan to maximize the cash flow over the mine life. An increase in daily processing rate and the ability to develop a higher-grade starter pit are part of the feasibility planning process to reduce the payout period and maximize cash flow over the life of the mine.

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BTW... the MD&A is worth a second read after a few of our latest developments and Elmer's presentation in Sept. Elmer's understand of the mineral trend is still described as being at 'the early stages'. I wonder if DH 410 and "one to one" and the recent drills have taken us past 'early'.

From pg 3 MD&A

Schaft Creek – An Emerging Porphyry Copper District?

The results of the Titan-24 geophysical surveys completed in 2010 and the extension of the higher-grade copper-gold molybdenum-silver mineralization to the east and at depth in the Paramount zone in 2011 demonstrated the potential to increase the size and average grade of the Schaft Creek deposit. While this milestone is extremely important to support the development and construction of a large open pit mining operation, the further understanding of the potential of the area to host additional porphyry deposit is fundamental to sustain longer term operations.

The exploration completed since 2010 has demonstrated sufficient criteria to suggest the Schaft Creek area should more properly be described as a developing Porphyry District. The Schaft Creek Mineral Trend, containing the Schaft Creek deposit, two large zones of copper-gold-molybdenum-silver mineralization on surface, a large untested chargeability anomaly (Mike Zone) and a structural setting defined by the high resolution aeromagnetic survey are all features typical of a porphyry district. The Schaft Creek Mineral Trend is a 15 kilometre long zone of favourable rocks, alteration, geophysical anomalies and mineralization that adds significant potential to find additional porphyry style copper deposits within the Schaft Creek property.

The focus of the 2011 program is to complete the feasibility study before the end of 2011. The understanding of the mineral potential of the Schaft Creek Mineral Trend is in the early stages. The results to date from the 2011 program have been very encouraging in that the higher grade mineralization (located in 2010) in the Paramount zone has been extended an additional 150m to the east further demonstrating the mineralized nature of the large chargeability anomaly identified in 2010. Approximately 400m of this chargeability anomaly lies under the area know as Mount La Casse and remains to be drill tested. Contingent on the results of the recently completed Titan-24 survey, drilling of the Mike zone and ES and GK zones of copper-gold mineralization is planned, subject to weather conditions.

The exploration work to understand the mineral potential of the Schaft Creek Mineral Trend has focused on the area located north of the Schaft Creek deposit. This area is considered to have significant potential to host additional porphyry style deposits. The Schaft Creek Mineral Trend also continues to the south as was demonstrated by the Titan-24 surveys completed in 2010. The area south of the Schaft Creek deposit has not been explored and should be prospective for porphyry style copper-gold-molybdenum-silver mineralization.

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Hey Agoracom.... a useful tool to have would be a highlighter or text colouring tool to format text to emphasize certain points. Just a suggestion. tia