Company Updates

Copper Fox

(CUU-TSXV)

Copper Fox updated the status of their feasibility study on the Schaft Creek copper-gold-molybdenum-silver project in northwest British Columbia, noting the mine plan is complete and economic analysis and project sensitivity studies are underway. The company has also engaged a second firm to conduct a peer review. No definitive time-line was given, but it is fair to assume that a number of weeks will be re-quired by the time all the various approvals are given. The eagerly awaited study will trig-ger a 120-day period, during which time major-company partner Teck will elect to back-in on the project or retain a minority interest. If Teck elects to back-in for a 70% interest, they would be obligated to fund the next $350 million on the project.

Importantly, the agreement speci-fies that Teck must place the mine into production within four years to complete the earn-in. When the agreement was crafted, that time-line may have been achievable. In today’s world, it would be near im-possible to permit and construct a mine on this scale in that time frame.

Teck has a large presence in British Columbia, with two world-class operations and its global headquar-ters in Vancouver. They own 50% of the nearby Galore project and are active on a couple of other cop-per projects in the region. It seems unlikely that they would walk away from such a large resource. Further, Teck is profitable and has large cash holdings.

In the meantime, Copper Fox con-tinues its exploration program on other targets along the trend. Some of the target zones are on property outside of the joint venture prop-erty.

If Teck does not back in, then Cop-per Fox will continue to control a very large deposit and a district-scale exploration trend. If the major does back in, Copper Fox will be in a strong position, with its partner funding a great deal of work, with control of important ground outside of the joint venture and the four-year development time limit.