QUESTION & ANSWER SESSION:COPPER FOX METALS (V.CUU) (APRIL 9th-11th)
** Note: Those new to this story should first start by getting up to date here: CUU STORY

Q = Shareholders Questions asked by our very own WEBGOGS
A = Answers by President & CEO Elmer Stewart

Q: Web, please ask Elmer about the outcome of the mine plan status meeting that they had with Tetra Tech this week.

A. The meetings are now daily. Tetra is taking a hands on senior management overview. They took responsibility for it and are owning the problem. We can expect premium service until it’s completed.

Q: Web ask him how far off he is with his permits and is he getting pressed because of any political issues that BC might face in the near future.

A. They do acknowledge the potential for problems. They are fairly sure we have met the horizon and are safe. With a company the size of Teck and with its history of getting things done we are assured this will go through. Teck has the clout to get it done. We are safe to assume that the background work has been done.

Q: I would also like to know if we could not have weekly updates emailed to us.

A. They do not want to hand hold with semi monthly chit chat. There more people who do not want the company spending time on that than there are people for it by a large margin. What you can expect is numerous NRs. We are in the final leg and there’s a lot to report. These things will keep us busy reading.

Q: Who sees the BFS when it is completed and the timeline involved?

A. The entire command chain. Last is Teck who simply gets the NR before it goes public.

Q: Does Teck have the right or authority to withold the BFS from retail investors and under what circumstances would they be permitted to do so?

A. They do not get to hold up the show. I think Elmer said 24 hours but don’t quote me on that.

We have land claims that we have to offer to Teck under the 2002 Salazar Agreement and land claims that we don't. With Elmer's understanding of the geology of the district, he obviously feels these properties have great potential. Assuming Teck is not going to significantly over-pay for non-drilled/proven deposits, and assuming that the value we feel these properties may have might push the cost of acquiring CUU out of Teck's comfort zone

Q: is the Board content to remain a partner in Schaft Creek and continue drilling its own claims?

A. First, you’ve seen the purchases by Teck. The entire district including RG, PGS etc would not put this out of their ability. More on that later. Is the board content to keep drilling. “Why wouldn’t they be”! Yes, absolutely. This is the desired scenario. We’ve been complimented as doing the best job they’ve seen in decades, FS fubar aside, we have delivered the best bang for the buck bar none. As far as they are concerned we do what we do better than any one else so I personally expect a 2.0 with a fat pay out. As a team, we make one hell of a development company.

Q: It would appear that Teck would be at a disadvantage in negotiating with a Company that acquires ownership of CUU after the BFS has been released and before the JV has been agreed to. Would Elmer agree with that and does he have any comment? Wouldn't this situation be attractive to an offshore interest such as China? Even before the BFS and after the RE?

A. There’s no advantage to us nor disadvantage to Teck. We are working towards a common goal. Sure, we may haggle the price but I suspect Teck will want this arrangement to continue for another decade. Yes, other interests have been sniffing around but essentially they all need to see Teck’s move first. There is a small chance that someone will make an offer for our part but we’ve discussed this in great detail. Elmer’s opinion is that we will reach a fair price.

We do have to look at the valuation of the long term copper price used to calculate value. $2.50 might be a bit low. Consider the shortages Teck is going to experience. They don’t have a crystal ball but they do know they have a need. They also don’t want to starve the baby so to speak. They will offer enough money so that in 2.0 when we need money, money will come. They are well aware that liquidity for JRs has been severely impacted and they know this isn’t going to change much over the next 5 years. We get paid to take the risks.

Q: Are there any active non-disclosure/confidentiality agreements in place with other interested companies at the moment, and would CUU have to get Teck's permission before proceeding down that road?

A. There are no current NDAs. NDAs are not applicable to Teck’s controls. We could sell ourselves off but why would we?

1. How far along is the reRE? Is silver going to be included? How about rhenium?

A. Rhenium is a bonus in the concentrates that fetches a higher value and only effects the sale price. With the new data it is expected the silver will be included. Should the geo’s not agree to a number then Elmer would have to go to the commission for a ruling. If for some reason he could not get a number to state for the sale of the concentrates then it would be a selling point. Due to the amount of silver it unlikely that he would not get a ruling.

Q: Is it possible the updated RE will be released before the FS?

A. Yes. Very likely. The question is, will we still be here.

Q: Is the RE on a deadline after a BFS? What I guess I dont understand is why would they not just do a RE when they are completely ready with all the numbers needed, if Silver makes a complete RE then take the time to add it?

A. No. The RE comes before the FS and is incorporated. See above for silver.

2. When are they going to have a drill plan for 2012? How many drills, how many meters are planned?

A. Mmmmm, we have to wait a little bit.

Q: What areas are they going to drill?

A. We have purchased land in continuity to our control structures and deposits as indicated in the last rounds of drilling. We will focus entirely on proving up new resources. We have all the indicators to suggest that we need to focus on our 4 metal hits. We also found different mineralization(s) suggesting brand new deposits. We will do the 4 metals first because that’s the money. Ground work will be conducted all over the place just incase one of the other hits turns out to be something really good. We won’t ignore any find just because it’s not 4 metals. Who knows, the other finds might be high grade precious metals. I do know we will work Mess but don’t get too excited yet. There’s not enough data to warrant over optimism. That is just my personal hunch. While I’ve been right just about every time, Elmer cautions that we need more proof. Given our discussion, I will except his explanations for it even if he may have been trying to steer me away. (Doesn’t want the cat out of the bag?).

We did talk about control structures and the Paget trend. I argued that Paget doesn’t have evidence as to where their minerals came from in that zone. Elmer said we don’t have the chemistry to back up that assumption yet. What we need is comparable minerals and a Titan. So, ok, bring on the Titan data and let’s see. Of course, there will have to be more ground work first. They will also have to try find more places for storing rock over there and there does look to be a couple good candidates.

3. Are they planning another PP? Will it be open to outsiders or EE again?

A. EE can be used for small PPs. EE is aware of the over concentration he has and the visual it conveys. No comment on the next PP and its size. We have to wait a little bit.

How large of a PP?

A. Mmmmm, see above.

4. How likely is it to continue exploring unproven areas as a spinco or as CUU (after a divident for Schaft is paid out by TECK).

A. this is a good question so let’s continue here. You noticed that Teck didn’t buy our claims. They surrounded everyone. This cost a lot of money and the cost of keeping the land up to date is huge. Who do you think is the best candidate to explore these claims? Another good question is why all of a sudden now? Hmmmm. What do you suppose our data indicated? Of the juicy questions this will lead to. For now, I’ll put it to you this way. Teck wanted to weed out competition and buy them before they became very expensive.

5. Are they planning further land purchases/claims?

A. Yes and no. We have what we want and Teck can acquire anything else they deem a good bet.

6. When do they plan to lift the self imposed blackout? Is it the reRE announcement? the BFS?

A. The FS would certainly be a good time to end it. The problem is obviously that certain directors have to have constant info streams about the FS so they are stuck in limbo even if they would rather be acquiring. I suspect they will remain in limbo until it’s time to incorporate the new data. That would be the first opportunity to end it for guys who don’t have to be hands on. So only certain guys will be stuck right to the end.

7. Have they been approached by other interested parties lately? (ie. chinese, indians, other large miners).

A. This is a regular occurrence. In part, others just want to see how things are progressing but it reverts back to Teck. Everyone wants to see what Teck will do first.

8. How are things with the environment permits/applications? Any news expected soon on that front?

A. This is an ongoing process. When the papers are filed it won’t be news to the guys who have to sign off on it. They are actively involved. We will be informed of the stages as they are achieved but you’d need to be up on the document to recognize that you are being informed. MD&As are a good place to read about them. Sometimes we see a bit in an NR like geo technical drilling for the water control etc. I would recommend that everyone become familiar with the document even if it’s just at the surface level. It’s always good to know what you’re reading when you see an item.

The Project is currently in the first of the province’s two staged environmental assessment (EA) process. The pre-application stage focuses on identification of the issues and concerns to be addressed in the Application and reflected in the AIR. The pre-application stage is considered completed on acceptance of the Application for review by the EAO, initiating the Application Review stage of the EA process.

Q: Why wouldn't they make certain that silver and Rhenium are included in the FS even if it meant another delay.

A. There is sufficient data but the head Geo(s) have to be comfortable signing off on it. I think they will be able to do it with confidence after a little more metallurgy is done. Repeatability is the key. With each phase they become more confident but if all else fails we can still apply for a ruling. Elmer will do this in the back ground and we won’t know until it’s announced.

1. What's the likelihood of getting a large dividend for the sale of SC versus selling everything and having a spin-co that has option agreements with TECK to explore the remaining land?

A. Worth another answer. Considering that Teck has the best explorer and one with a very good relationship the outcome favours this. It is possible that Teck takes us out and all the other guys in one grand move. But, this still would leave the question of who would do the exploration. There’s risk involved and the Majors avoid risk where they can. They also like to operate and manage much more than they like to explore even with their own guys. Due to the shear size of the “Mining Province” Teck will need more explorers that they have. Proven guys are hard to find and that’s why you pay them 4 times the drilling.

2. How is the mine plan going? Do they still have staffing issues? Are there any technical issues?

A. No more technical issues have surfaced. More later.

Q: With the recent decline in share price, is there a reason that no insiders bought shares?

A. Black out. As for EE it’s the optics of the over concentration. This does not preclude him from rescuing the sp if it were to suddenly tank. He also wants us to get fair PPs.

Q: What is the status of Jim Gray's consulting?

A. Jim is doing a very good job of getting this back on track. He’s earning every penny.

Q: How will Elmer’s Liard duties benefit us through his CUU role?

A. Teck wanted an inside guy on the board. This seat will help with all of the transactions that have to go down. People need to know that Elmer does not get paid so any crumbs you can offer a guy like this you give at every chance. It is a fairly big bonus to us because it ensures a smooth transaction where Teck reliqueshes the Liard shares and then claws them back. Our worst case leaves us with 20% so we want our guy on the board. Every vote counts. Now comes the question of what is their true value. Well, carried interest is based of what was given up in the first place. To this, Elmer will have to get back to me because he thinks there might have been an “Area of Interest” clause. If not then it would comprise the initial consolidation of the claims only. If there’s an AI then the value increases a lot. I believe an AI is standard. As Elmer assumes the mantle he will refresh himself on the contract and let me know.

Q: With the age and convoluted nature of the original Contract, are there now or have there in the past been any negotiations or requests for a novation. If so, were/are we amenable to that?

A. No formal request has been made. This will be done during negotiations if one party feels it would benefit the agreement.

Q: Many people including Vette have mentioned Rhenium. It is valuable but it requires expensive and complicated refining, will the proposed mine plan and designed procsses be compatible with extraction of Rhenium or are they completely separate issues? It seems to me you said the process at Galore will be different from Schaft creek so I wonder how it dovetails with other metallic elements?

A. It is a critter all of its own. It will be concentrated but we won’t have anything to do with its extraction.

1) Where do Paget and Romios fit into this mining district? Both have porphyry targets and strategic access to Galore Creek and Schaft Creek. Looking at the Paget pdf it appears the road access could potentially run through their property. After crossing Mess Creek at the north end of the Schaft Road (32.5 km), the route rises up the side of Mount LaCasse crossing Shift Creek (10 m bridge) and Big B Creek (10 m bridge). The route terminates at Snipe Lake (39.5km). Conventional 30-tonne trucks will be used to transport concentrate from the mine site to the Bob Quinn area along the Schaft and Galore roads. From Bob Quinn to Stewart, conventional B-train commercial truck haulage can then be utilized along Highway 37 and 37A. There will be 30 concentrate trucks along this route over a 24 hour period, seven days per week. Are there any implications with the 2 river crossings and also Mess Creek drainage into international water?

A. To boldly go where no….

We’d be fools to think Teck will ignore these other companies. One clue we can consider is that we didn’t buy Paget out! These other small players have considerable areas of interest. Paget is on of the more advanced projects and would have a definite interes in the road. If I recall, they stated that on their website.

2) Teck recently staked a lot of land surrounding CUU, RG, and PGS. This can only be taken as a sign that they are consolidating the area for a mining operation. What's going on with all the Teck staking? What does CUU know about the Teck land grab or what does CUU management think it means? What are your thoughts on this? And in which order are the remaining 3 going to be acquired?

A. Teck might take the weakest first. Paget did hire the right people too. If I were Teck I’d take out PGS first then let RG plug away at it. Paget is closer to the road. Yes, obviously Teck is consolidating but we have no real insight into what they may do next. I think I have covered this subject last year in detail. My opinion still stands. Only now, I can add the fact that we didn’t take PGS out ourselves to the equation.

In Elmer’s opinion you see majors cutting off competition because you have a long range plan. It’s all about control and looking a decade ahead. Look how long Teck has sat on us. I would not be surprised to see a repeat. Teck could go for an option on them. The door is wide open. Clearly, Teck sized control of the “Mining Province” before anyone could get their meat hooks into it. When I wrote about the $25 billion going into our North I wasn’t kidding or blowing smoke up people’s butts. This is for real.

4) There was mention of concentrate heading West to Stewart and East to Montreal? Anything you can add to this?

A. Yes. Moly would go East and some or all of it could go South. The smelters are there and have an interest in this supply because it’s high grade and to some degree will cost less to ship.

Q When is the next annual meeting?

A. It’s not been set in stone yet. The financials need to come out first. Once the paper work is done and a couple of other decisions are out of the way then a date will be set. Typical time frame once all the hurdles are done is 75 days.

My questions center on (1) my concern that the BFS delay was associated with preliminary NPV figures that were less than desired and (2) my wish to generate information that allows a more realistic valuation model.

1. Does the higher grade at deeper depth cause a change in the design of the starter pit? If so, is this one of the causes for the delay? As well, what is the effect of a different starter pit upon both revenues and costs?

A. No changes are required and no, this had nothing to do with the FS fiasco. The pit is primarily focused on the 3 year start up. We have opened up more high grade and more depth so as they dig into it the profits will increase. We’ll have to wait and see the annualized revenues to get a clear picture of the impact.

2. Are the projected capex costs still within the previous range? Is there going to be inflation in the capex associated with the longer timeline?

A. They expect the numbers to be very close. One thing that can be said about the start up is we can now consider the timelines very achievable. We can’t control some infrastructure cost beyond a certain degree simply because we can control the world events. Some costs are coming down now because things are steadying out.

3. The July 2011 measured and Indicated mineral resource (at a 0.20% copper equivalent cut-off) totals 1.01 billion tonnes grading 0.27% copper, 0.017% molybdenum and 0.18g/t gold. The starter pit should access higher grades than those averages. For modeling purposes, what percentage increase should be applied to these figures to represent the grades that will come from the starter pit?

A. I couldn’t get a number out of Elmer because that is material info. He said it improves.

4. How much overburden must be removed before ore extraction takes place and how long will that take?

A. See hole 419. 6 meters is enormously better than 75 meters! As in wholly (mild expletive).

5. How long will it take to exhaust the ore in the starter pit?

A. We must now think in terms of decades.

6. Proposed mill sizes have been 120,000, 150,000 and 180,000 tpd. As this mill size increases, what are the likely increases in capex?

A. No increases. The report takes these into account and gives a snap shot in time. This is in part why the reports are so complex.

7. AMEC reported that silver grades within the deposit range between 1 g/t and 2 g/t. Would 1.5 g/t be a reasonable figure to use for modeling? As well, what is a reasonable recovery rate for silver?

A. The recovery remains the same. More later on blending. Ya, that is a fair number but given the distribution I think 1.7 is better.


8. The 2011 RE stated that Schaft has hard mineralized material, which, in turn, suggests that operating costs are sensitive to the cost of power and grinding media. What is the effect of access to NTL electricity on both Capex and Operating costs?

A. We are about average for a porphyry. We blend the rocks so we can have an average throughput because the mill requires it. This also ties in with what comes out in the concentrates and we know where each bucketful needs to come from to achieve this. As for the NTL over diesel, umm, huge difference.

9. AMEC did the July 2011 resource estimate. Are Tetra Tech’s estimation methods similar or different? If different, in what way do they differ?

A. The databases dictate the methods so since the db has changed it’s safe to say they will take a different approach. This won’t effect the timelines. Either company would do that as the data came in.

10. Who reads the CUU presentation that is in Chinese?

A. Chinese people of course! lol. It’s mainly an investors tool.

Q Is there any chance we could have in their presentation the actual size of the targets to the south of the paramount zone 1000m to the north the paramount 1800m the mike zone, es and GK zones total individual lengths , widths and depths. this would impress many investors.

A. It’s in the NRs. I think you are asking if we can have nice pictures for the non-geo minded? Yes, Elmer may provide some slides but I get the impression we won’t have time for that.

1) Will Mr. E will be at AGM? I want to shake his hand.

A. He attends them all.

2) What’s up with Frankfurt exchange and our listing? Is of any benefit?

A. This was not our doing. It may have some benefit but really, PPs and such are primarily done here. What it might do is make some people money over there but the majority of those guys just buy on our exchange anyway.




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