I know this is old news but something caught my eye. I never seen this before. It`s about half way highlighted and underlined. Not sure but has anyone seen this before?

Teck and Copper Fox partner up on Schaft Creek

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By: The following article is reprinted with permission from CMJ's sister publication The Northern Miner.
2013-07-17

VANCOUVER – Teck Resources (TSX: TCK.B; NYSE:TCK) has a thing for Schaft Creek.

Thirty years ago Teck advanced the project to pre-feasibility, before metal prices and other opportunities forced the copper-molybdenum-gold-silver porphyry to the backburner. Teck was not the first to see potential in the northwest British Columbia property – at least seven other companies worked the project prior to Teck.

In 2002 Copper Fox Metals (TSXV: CUU) inked a deal for Schaft Creek, dusty after some 20 years on Teck's shelf, and started looking at the project with a modern eye for the first time. The large land package soon became Copper Fox's raison d'etre, and over the next 10 years the company spent more than $80 million growing the resource, investigating road and power options, consulting the Tahltan Nation, developing a mine plan, securing concentrate storage and shipping routes, and generally prepping the project to become a mine.

That journey culminated with a feasibility study, released in January, that outlined an open pit mine producing 232 million lb of copper, 200,000 oz of gold, 1.2 million oz of silver, and 10.2 million lb of molybdenum annually for 21 years. The plan gave Schaft Creek an pre-tax net present value of $1.7 billion and predicted the mine would generate a 10% internal rate of return, using a 5% discount rate and based on metal prices of US$3.25 per lb copper, US$1,445 per oz gold, US$27.74 per oz silver, and US$14.64 per lb moly.

Copper Fox delivered the 11,000-page feasibility study to Teck on February, starting the clock on Teck's opportunity to back in for a stake in Schaft Creek. The 2002 agreement between Teck and Copper Fox gave the major 120 days following receipt of a feasibility study to decide to acquire 20% by spending an amount equal to Copper Fox's expenditures to date, 40% by spending three times CUU's investment, or 75% by spending four times Copper Fox's outlay at the project. Or Teck could just walk away.

According to Elmer Stewart, president and CEO of Copper Fox, walking away did not seem to be an option for Teck. The day Stewart walked into Teck's offices with the Schaft Creek feasibility study, Teck wanted to talk.

"A lot of people were probably saying that we would never get it done, but we got it done," Stewart said in an interview the day news broke that Teck and Copper Fox have signed a new Schaft Creek joint venture agreement.

The new deal will see Teck take a 75% stake in Schaft Creek and act as operator, with Copper Fox holding the other 25%. For its stake Teck will pay Copper Fox $60 million in installments: $20 million on signing, $20 million upon a production decision, and $20 million when the mine is built. In addition, Teck will spend up to $60 million preparing the project for a production decision. If preproduction costs climb above $60 million Teck will fund Copper Fox's share of the costs by dipping into the remaining payments and, if necessary, by providing Copper Fox with a loan.

Finally, Teck is responsible for securing the equity and debt financing required to build a mine, if a development decision is made. And Teck has committed to a 10,000-metre drill program at the project this summer to test for an eastward extension of the main deposit and to collect geotechnical information.

Copper Fox has spent more than $80 million at Schaft Creek to date. The old deal would have required Teck to spend four times that much, or $320 million, on the property to earn 75% ownership. As such, the new deal could be seen as a steal for Teck, which now will get 75% of the property for $120 million (or less, if the partners make a production decision before Teck has spent $60 million at the site).

That matters not to Stewart and his Copper Fox management team, because the fact is that the mining world is a changeable place and deals done 10 years ago have to be amended to suit today's investment climate.

"Clearly we're in a market right now that's not great for junior companies," Stewart said. "The thing is: there was an option agreement and we maintained the spirit of the option agreement. We had to make some changes, which we did and which we think are in the best interests of Copper Fox shareholders, and Teck still has an obligation to arrange project financing if and when a production decision is made – so that's pretty good for a junior these days."

It seems investors agreed. On news of the Schaft Creek deal, Copper Fox's share price jumped 21¢, or 36%, to close at 80¢.

The details of the deal were likely less important to investors than Copper Fox managing a deal at all. Schaft Creek is a massive project, with a measured and indicated resource that contains 7 billion lb of copper, 7.4 million oz of gold, 67 million oz of silver, and 455 million lb of molybdenum. But the project is also in rugged northwest British Columbia, 80 km from the nearest road or power line, and building a mine at the site is expected to cost $3.3 billion.

"The reality is simply this: Copper Fox had taken the project as far as we could," Stewart said. "We can drill holes, we can update the feasibility study, but the next thing Schaft Creek needed was a serious operator.

"Since 2010 we have been grooming the project for that transition: we secured the bulk terminal outlet at Stewart for the concentrate, we worked hard with BC Hydro, we stepped out from the deposit to test geophysical features and got some holes with really good mineralization that clearly indicates that there's another large zone of mineralization to the north and some serious district potential. But all along the idea was to groom this thing so that a larger company with operating and financial and development expertise would feel comfortable stepping in.

"Today, we like to think it's a job well done."