Something useful from SH?
posted on
Jan 22, 2013 11:51PM
CUU own 25% Schaft Creek: proven/probable min. reserves/940.8m tonnes = 0.27% copper, 0.19 g/t gold, 0.018% moly and 1.72 g/t silver containing: 5.6b lbs copper, 5.8m ounces gold, 363.5m lbs moly and 51.7m ounces silver; (Recoverable CuEq 0.46%)
They have this analysis posted on SH as of yesterday. From a poster who calls himself "Becaro." It's not comprehensive but for a newcomer who is starting to scratch the surface on a possible CUU investment, this is decent info (granted it's not Vette's blog, but it's okay)...
Copper Fox Metals - Feasibility Study
Just before christmas, Copper Fox Metals released their long awaited Feasibility Study for the Schaft Creek deposit. This “ground breaking” deposit puts the company on the forefront of defining viability in the so called “Golden Triangle” in northern Canada. No doubt many eyes are watching the next steps.
The golden triangle is in the northwest corner of British Columbia. It has two big hindrances: Low grade deposits and very rugged, mountainous terrain. In fact, nobody would want to explore there if it wasn’t for one big advantage: The deposits are massive. Just to give you an idea, Seabridge Gold’s (SEA-X) KSM deposit contains 42 million ounces and counting, and there’s just as much copper as gold too.
There are two juniors in the golden triangle who are well advanced, Seabridge Gold and Pretium Resource (PVG-T). Both are located south of Schaft Creek. Also, Novagold and Teck have a 50/50 joint venture for the Galore Creek deposit to the west of Schaft Creek. They attempted to begin mine construction in 2007 as prices were heating up and decided to pull out mid-way, due to escalating costs. Schaft Creek is planning to use their partially built access road.
So let’s get down to business. The feasibility study looks like this:
Metal price assumptions:
The resource:
Annual Production:
Copper Fox has an agreement with Teck Resources whereby Teck can “back-in” to the project with a 75% stake, leaving Copper Fox with 25%. Clearly Teck has a right of first refusal.
If they back in, they will begin the process of constructing the mine and Copper Fox is left as a semi-passive partner. In this scenario, starting in 2020 Copper Fox will be a mining company with 69 million pounds of copper production and 59,000 ounces of gold production, or 205,000 gold-equivalent ounces. With 420 million shares outstanding, this positions the company very favourably. It would produce 1/2,000 ounce per share, a level similar to Eldorado Gold which trades at about $13.
If Teck does not back in, Copper Fox would be free to search for other partners. Everything is, of course, wide open in this scenario.
So what do I think? Here are a few thoughts for a Copper Fox investor, or potential investor, to consider.
My final analysis is this: Schaft Creek will be a mine. There could be some jostling because Teck might not actually back in. They could take an equity stake, or the agreement could be renegotiated. Maybe they will indeed walk away, but with long term worldwide trends the way they are (depletion of resources, increase of metal prices) big deposits like this are almost a necessity for a junior gold investor. One would, of course, hope they back in and this is a very decent possibility.
Good luck,
The Junior Gold blog