I haven't noticed discussion about the usual cadence of NRs as we complete the final leg of the loooooong BFS journey (apart from the frustration in delays).

In 07/08 there were three discreet milestones: the RE, the pit optimization plan, then the PFS.

July 03, 2007
Copper Fox SignificantlyIncreases Resources at SchaftCreek

October 19, 2007
Copper Fox Metals' PitOptimization Study Demonstrates 65,000-tonne per-day Operation at Schaft Creek

January 14, 2008
Copper Fox ReleasesPositive Preliminary EconomicAssessment on its Schaft Creek Deposit --Prefeasibility Study for 100,000tpd in progress


Now, I was a shareholder back then and Elmer was on the board too, so what surprises me is that he broke precedent this time around and seems to have chosen to skip the middle step,the pit NR, and we the public will instead wait for the full/completed BFS. Why?

If you review the Pit NRat the CUU website (link above if it comes through), you will notice it contains information pivotal to project economics such as the average grade ofthe starter pit. This information significantly impacts the DCF calcs in an attempt to bring as much cash to the front of the project lifecycle as possibleto both dampen discounting effects and speed payback.

So why would Elmer want to hold this information? Normally I would consider this to be a large red-flagas a potential attempt to protect the SP for financing/PPs but CUU doesn't goto the market for money because it is insider-funded. Due to majority ownership, we are, for all intents and purposes, essentially a private company controlled by Ernesto that has strategically decided to maintain access to public capital markets by staying listed. As we all know too well the company seems to care little for the day-to-day stock price...So why did Elmer skip thePit NR? I strongly suspect it might be because the information is extremely positive. We can only speculate on the specific reasons/drivers though but it might be driven by negotiations or Teck's desire to maintain secrecy.

Along those lines, forthose at home armed with DCF spreadsheets and other value estimating tools, Ithink the interpreted cross sections posted on the CUU site over the last fewweeks (maybe earlier? Ive been busy) bodes very well for the starter pit. I've summarized and highlighted some thoughts in the graphic at the bottom of this post.

The key drills seem to demonstrate the higher grade material we want/need in the first 100-200m that we can fast track to the processing plant. If you pick out the drills with theshallow quality material, you also get an idea of where and how large the Paramount starter might be. If Elmer is able to get an average feed to the millup to the neighborhood of .4Cu/.7CuEq or higher, at 120ktpd we should have a decent chance of knocking off a 3B capex in 3 or 4 years.

That kind of payback speed implies cash of neighborhood 1B per year early on. 23% of 1B cash in year1 makes those who challenge a CUU buyout of 2.50 or 3 look silly.

Good luck everyone. I have a feeling Elmer may provide some Holiday Cheer.


PS: I have some fantastic NPV starter pit scenario number I will try to post this coming week that demonstrate how impactful a good starter pit can be to the NPV and cashflow in the first few years. Longs who haven't run these numbers will be blown away.

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