http://www.biv.com/article/20130730/BIV0108/130729931/0/BIV/big-mining-deals-but-no-industry-turnaround-yet-amebc-boss

By Sean Kolenko Tue Jul 30, 2013 12:01am PST

This month's announcements of two sizable exploration deals aren’t signs that investment in the junior mining sector is turning around but rather examples of savvy investors backing quality projects, according to an industry representative.

On July 16, Alberta-based junior company Copper Fox

Metals (TSX-V:CUU) inked a
$60 million joint-venture agreement with Teck Resources (TSX:TCK) to further explore Copper Fox’s sizable copper-gold-molybdenum-silver Schaft Creek deposit in northwest British Columbia.

Two days later, Liberty Metals and Mining Holdings, a subsidiary of Boston-based Liberty Mutual Insurance, invested nearly $23.5 million in B.C.-based True Gold Mining (TSX-V:TGM) to support more work on its Karma Gold property in Burkina Faso.

Michael McPhie, chairman of the Association for Mineral Exploration British Columbia, told Business in Vancouver that funding for grassroots exploration remains “extremely difficult.”

“It’s as bad as it has ever been in the 20 years I’ve been in the business,” said McPhie.

“Companies are under very tight fiscal constraints and some projects are being put on hold.”

But neither Schaft Creek nor Karma Gold constitutes grassroots exploration, McPhie added. Copper Fox, for instance, spent $88 million at Schaft Creek prior to its recent deal with Teck. The property has been studied and drilled and, as a result, is now being backed by a “very knowledgeable group.”

“Investor appetite in general is still very low. But good projects will continue to attract money from smart investors,” McPhie said. “What we’re seeing is a flight to quality.”

The Teck-Copper Fox deal gives Teck a 75% stake in Schaft Creek, while Copper Fox retains the other 25%.

This year, Teck is planning a 10,000-metre drill program on the property. •