Copper Fox Reports 2012 Annual Financial Results
VANCOUVER, Feb. 14, 2013 /CNW/ - Copper Fox Metals Inc. ("Copper Fox" or the "Company") (TSX-V: CUU) is pleased to announce its operating results for the 2012 year-end. During the year, the Company completed an updated resource estimate, an exploration program and continued the environmental assessment application process on the Schaft Creek deposit. Discussions were undertaken with BC Hydro in an effort to secure a source of electrical power for the Schaft Creek project and the Company made several property acquisitions in British Columbia and Arizona. Subsequent to year end, the Company announced the results of a positive feasibility study and the filing thereof on www.sedar.com.
Copies of the financial statements and notes and related management discussion and analysis may be obtained on SEDAR at www.sedar.com, the Company web site at www.copperfoxmetals.com or by contacting the Company directly. All amounts are in Canadian dollars unless otherwise stated.
In May 2012, Tetra Tech Wardrop ('Tetra Tech') completed the Updated Resource Estimate for the Schaft Creek deposit including the Paramount and Liard zones. For a more detailed review of the Updated Resource Estimate, please see Copper Fox's news release dated May 31, 2012.
Subsequent to the year ended October 31, 2012, the Company announced the results of a positive Feasibility Study on the Schaft Creek project in December 2012, and subsequently filed on www.sedar.com in February 2013.
The first step in determining mineral reserves is to use only the Measured and Indicated resources in combination with certain input parameters and the Whittle Mine Optimization software program to generate a considerable number (in the order of 40-50 runs) of proposed pit shells. From the 40-50 runs, mining engineers select the pit shell with the most attractive economics and then commence to develop the actual proposed mine plan to be used in the Feasibility Study. Invariably, the process of establishing reserves normally leaves a considerable portion of the Measured and Indicated mineral resources outside the pit shell. This process in general explains the significant difference between the mineral resources and the mineral reserves estimated for the Schaft Creek project. If at a later date, the remaining resources in the Schaft Creek deposit not initially classified as reserves at the time of the feasibility study, can be deemed economically viable they would be included into the reserve category, thus extending mine life.
The feasibility study was based on an open pit mine with a nominal 130,000 tonne per day ('tpd') milling capacity over a 21 year mine life representing a 30% increase from that proposed in the Preliminary Feasibility Study prepared in September 2008, with only a 20% increase in the estimated Capex.
Highlights of the Feasibility Study (all amounts are stated in Canadian dollars):
- Nominal 130,000 tpd open pit mine feeding a concentrator with two Semi Autogenous Grinding ('SAG') mills;
- Initial Capital Cost ('Capex') totals $3.256 billion, which includes contingencies of $374 million;
- Sustaining Capex totals $1.240 billion over the proposed mine life, including $200 million for BC Hydro tariff;
- Life-of-Mine ('LOM') metal production contained in concentrates totals 4.88 billion pounds ('lbs') of copper, 4.21 million ounces ('oz.') of gold, 214.92 million lbs of molybdenum and 25.10 million oz. of silver;
- 5 years pre-production period followed with a productive mine life of 21 years;
- Proven and Probable Mineral Reserves total 940.8 million tonnes containing 5.6 billion lbs of copper; 5.7 million oz. of gold 363.5 million lbs of molybdenum and 51.7 million oz. of silver on the basis of drill data up to May 23, 2012;
- Within the pit shell there is a total of 171.16 million tonnes of inferred resource grading 0.25% copper, 0.018% molybdenum, 0.164 grams per tonne ('gpt') gold and 1.58 gpt silver which for purposes of this study must be treated as waste rock;
LOM average mill feed grades 0.271% copper, 0.191 gpt gold, 1.716 gpt
silver, 0.018% molybdenum and a copper equivalent ('CuEq') of 0.441%.
The CuEq is back calculated based on how much in situ copper is
required to provide the same after recovery value to equal the combined
metals value after recovery. The formula is: CuEq = NSR /
(CURec*NSPcu*22.046) NSR=RecCU*Cu grade*NSPcu*22.046+RecMO*Mo
grade*NSPmo*22.046+RecAU* Au grade*NSPau+RecAG*AG grade*NSPag , where
"Rec" is the recovery based on the recovery formula and grade is in
situ with no loss or dilution applied.
Based on recommendations in the Feasibility Study the Company is currently considering programs to enhance the economics of Schaft Creek including:
i) a diamond drilling program at Schaft Creek to upgrade the 171.16
million tonnes of Inferred resource, that lie within the pit shell, to
a Measured or Indicated Resource; and
ii) additional metallurgical testwork to increase metal recoveries and reduce processing costs.
2012 Exploration Program
The 2012 exploration program was designed specifically to avoid any work (diamond drilling, metallurgical test work, etc.) on the Schaft Creek deposit which if successful would have dictated a suspension to update that portion of the Feasibility Study. The objective of the 2012 exploration program was to test the mineral potential of the Schaft Creek Mineral Trend to host additional copper deposits. This trend is located on the west side of Mount LaCasse and extends for a distance of approximately 7 kilometres north of the Schaft Creek deposit. The drilling on the Discovery zone intersected broad intervals of significant copper-gold-silver mineralization that shows a strong correlation to the chargeability signature, a similar relationship to that seen at the Schaft Creek deposit. A considerable amount of diamond drilling would be required on the Discovery zone to establish the significance of this discovery in terms or dimensions and average grade. Mapping and sampling over a 6 kilometer long area from the south end of the ES zone to the north end of the GK zone located a significant number of outcrops and boulders that contain copper oxide and copper sulphide minerals.
During the year, the Company announced that it had entered into a binding offer to purchase from Bell Copper Corporation ('Bell') 100% of Bell's interests in the Van Dyke copper deposit and the adjacent Van Dyke BLM lode claims located in Miami, Arizona and the Sombrero Butte property located near Mammoth, Arizona by paying to Bell CDN $2,000,000 in cash and assumption of Bell's continuing obligations in respect of the properties.
The Company completed the acquisition of the Sombrero Butte property and the Van Dyke BLM Claims for the purchase price of CDN $1.0 million.
The acquisition of Bell's additional interests in the Van Dyke copper deposit is pending subject to Bell completing the acquisition pursuant to the terms of the purchase and sale and royalty agreement. For more details please refer to Copper Fox's news release of July 9, 2012.
During and subsequent to the year ended October 31, 2012; the Company acquired 89 mineral tenures (21,504.47 hectares) located around and contiguous to the Schaft Creek project.
Subsequent to year end, Copper Fox located (staked) an additional 22 mineral lode claims contiguous to the Sombrero Butte project to protect the extension of the mineralized breccia pipes previously explored by Bell. The Sombrero Butte project now consists of 60 lode claims and covers 3,342 acres.
Selected Financial Information
Net (loss)/income per share -
basic and diluted
Liquidity and Capital Resources
Copper Fox operates in a capital intensive industry in which the demands for capital to finance exploration and development of its Schaft Creek property as well as corporate overheads generally occur far in advance of the project being put into production and generating cash flow. The financial requirements of Copper Fox related to the potential development of the Schaft Creek project are mitigated to some extent by the obligations of Teck should they exercise their earn back right on the Schaft Creek property.
The Company's working capital was $5,139,258 at October 31, 2012 inclusive of an increase to prepaid expenses and deposits relating to an agreement on the Schaft Creek property and an increase in accounts receivable with respect to a tax credit claimed.
During the year ended October 31, 2012, the Company raised a total of $17,548,125 from the completion of private placements totaling $17,205,000, 725,000 options exercised for total proceeds of $248,000 and 126,833 warrants for total proceeds of $95,125. In addition, the Company issued 1,272,727 common shares for repayment of a loan of $1,400,000. Additional funds will be required to complete the current planned activities and the Company may need to issue additional equity in connection with any development of the project (Refer to Teck Earn Back Option).
Copies of the financial statements and notes and related management discussion and analysis may be obtained on SEDAR at www.sedar.com, our Company web site at www.copperfoxmetals.com or by contacting the Company directly. All amounts are in Canadian dollars unless otherwise stated.
About Copper Fox
Copper Fox is a Canadian-based resource development company listed on the TSX Venture Exchange (TSX-V: CUU) with a corporate office in Calgary, Alberta and an operations office in Vancouver, British Columbia. Its major asset is the Schaft Creek copper, gold, molybdenum and silver deposit located in northwestern British Columbia, Canada for which a positive Feasibility Study was recently completed and filed on www.sedar.com.
Copper Fox holds title and a 100% working interest in the Schaft Creek project consisting of 56,267.54 hectares (139,040 acres). Included in this total are the "Schedule A" mineral tenures originally conveyed to Copper Fox pursuant to the Teck Option Agreement, which consist of 8,334.34 hectares (20,594 acres). The "Schedule A" mineral tenures are subject to a 3.5% Net Profits Interest held by Royal Gold, Inc., a 30% carried Net Proceeds Interest held by Liard and, together with the additional mineral tenures obtained by Copper Fox within the "Area of Interest" provided for in the Teck Option Agreement, an earn back option held by Teck. On completion of the Feasibility Study, Copper Fox earns Teck's 78% interest in Liard. Teck's earn back option to acquire either, 20%, 40% or 75%, of Copper Fox's interest in the Schaft Creek Project is triggered upon delivery of a "Positive Bankable Feasibility Study" (as defined) to Teck after which they have 120 days to make a decision. Should Teck elect to exercise its option for 75%, Teck is required to fund subsequent property expenditures up to a total of 400% of those incurred by Copper Fox ($85.34 million to December 31, 2012) and use its best efforts to arrange for project financing, including the Copper Fox portion. For full details of the Teck earn back option please refer to the Company's website www.copperfoxmetals.com.
The remainder of Copper Fox's registered interests in mineral tenures in British Columbia total 47,933.19 hectares (118,445 acres). These interests have been acquired by Copper Fox through mineral tenure acquisitions and mineral tenure purchase agreements subsequent to Copper Fox entering into the Teck Option Agreement. Certain portions of these registered mineral tenures are subject to inclusion within the Schaft Creek Project pursuant to the terms of the "Area of Interest" provision of the Teck Option Agreement.
Additionally the Company holds, through wholly-owned subsidiaries, mineral tenures located in Pinal County, Arizona (the 'Sombrero Butte Copper Project') and in Miami, Arizona (the 'Van Dyke BLM Claims'). For further information on these mining projects please refer to the Company's web site at www.copperfoxmetals.com.
On behalf of the Board of Directors
Elmer B. Stewart
President and Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of the Canadian securities laws. Forward-looking information is generally identifiable by use of the words "believes," "may," "plans," "will," "anticipates," "intends," "budgets", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions. Forward-looking information in this news release includes statements about the results of a positive Feasibility Study for the Schaft Creek project; the technical and financial viability of a 130,000 tonne-per-day copper mining and processing operation at Schaft Creek; economic potential of the Schaft Creek mineral deposit; the existence and size of the mineral deposit at Schaft Creek; recommended future diamond drilling programs; potential upgrade of inferred resource currently treated as waste to either measured or indicated mineral resources; the productive mine life of the Schaft Creek project; average annual copper production in concentrates; initial and sustaining capital costs; LOM site operating cash costs and copper production costs; potential expansion and development of the project; opportunities to lower operating and capital costs and increase capital revenue; the length and scope of work for the pre-production period; additional metallurgical testwork to pursue opportunities to increase metal recoveries and reduce processing costs; use of new floatation technology which could ultimately reduce construction and capital costs while at the same time reducing operating costs; timing and amount of estimated future production; a Province of British Columbia Environmental Assessment Application and a Federal Environmental Impact Statement; a British Columbia Environmental Assessment Certificate and Federal environmental approvals; the construction of the NTL and timing thereof; discussions with BC Hydro on the terms and conditions surrounding participation and purchasing of electrical power from the NTL; the development schedule for the project; additional exploration to the east and north of the Paramount zone and north of the Liard zone; the process and expectations for metal recovery; estimated metal production over the life of the mine; estimated LOM average metal content, impurity element levels and, as applicable, moisture content; design, construction and capacity of a tailings storage facility; estimated capital costs; life of mine copper production total and cash costs per produced pound; projected future metal prices; the delivery of the Positive Bankable Feasibility Study and Feasibility Notice to Teck; the commencement of the 120 day period for which Teck may exercise its Back-in Right under the Teck Option Agreement; the aggregate incurred Expenditures; the Option to acquire the Indirect Holdings in Liard Copper Mines; the activity related to the Schaft Creek project during the 120 day period; establishment of work programs; the quantum and quality of porphyry style copper-gold-silver-molybdenum deposits at the Schaft Creek property; the potential to find additional porphyry style copper deposits within the Schaft Creek property; the acquisition of Bell Copper's Sombrero Butte property in Arizona and the pending acquisition of Bell Copper's Van Dyke property in Arizona; ongoing obligations of Copper Fox in connection with the Van Dyke and Sombrero Butte acquisitions; expected capital requirements to continue planned activities; expected sources and the adequacy of required capital resources; the timing and scope of expected diamond drilling; potential existence and size of mineralization within the Schaft Creek project; estimated timing and amounts of future expenditures and "earn-back" options; geological interpretations and potential mineral recovery processes. Information concerning measured mineral resources, indicated mineral resources and inferred mineral resources also may be deemed to be forward-looking information in that it reflects a prediction of the mineralization that would be encountered if a mineral deposit were developed and mined.
In connection with the forward-looking information contained in this news release, Copper Fox has made numerous assumptions, regarding, among other things: the economic models for the Schaft Creek project, including the NPV and ROV models; the calculation of estimate capital costs of the project; costs of production; success of mining operations; projected future metal prices; engineering, procurement and construction timing and costs; the timing and obtaining of permitting and approvals; the due delivery of the positive Feasibility Study to Teck pursuant to the Teck Option Agreement; the acceptance by Teck of the positive Feasibility Study as a "Positive Bankable Feasibility Study" as defined in the Teck Option Agreement; the commencement of the 120 day period for Teck to exercise its earn back rights; that Expenditures have been incurred in accordance with the Teck Option Agreement and in Company's expected quantumthe potential mineralization in the Schaft Creek deposit; the geological, metallurgical, engineering, financial and economic advice that Copper Fox has received is reliable, and is based upon practices and methodologies which are consistent with industry standards; and the continued financing of Copper Fox's operations. While Copper Fox considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause Copper Fox's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. Known risk factors include, among others: the results of the positive Feasibility Study may not lead to the development of a mine at Schaft Creek or commercial mining operations; the project development plans and timing for Schaft Creek as outlined in the Feasibility Study may not occur as currently anticipated, or at all; Teck may not accept that the delivery of the positive Feasibility Study constitutes delivery of a "Positive Bankable Feasibility Study" as defined pursuant to the terms of the Teck Option Agreement; the 120 day period that Teck has to exercise its earn back rights may not have commenced; the "Expenditures" may not constitute Expenditures as defined in the Teck Option Agreement in the quantum anticipated by Copper Fox, or at all; inferred resources, currently treated as waste, may never be upgraded to a high category of resource; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; uncertainties related to the estimated mine life and potential extension thereof; the possibility of delays and cost overruns in engineering, procurement and construction of the project and uncertainty of meeting anticipated project milestones; the Environmental Assessment Application and Federal Environmental Impact Statement may not be completed timely manner, or at all, or provincial or federal environmental approvals may not be obtained in a timely manner, or at all; the possibility that future obligations with respect to the Van Dyke and Sombrero Butte properties may not be met on a timely basis, or at all; Copper Fox may not proceed or continue with activity on the Schaft Creek project as currently planned; additional metallurgical testwork may not be completed, nor result in increased metal recoveries; further exploration at Schaft Creek may not occur as currently anticipated, or at all; the actual mineralization in the Schaft Creek deposit may not be as favourable as suggested; another deposit may never be discovered on Copper Fox's property, or contain anticipated mineralization, or mineralization of any significance at all; the possibility that future drilling on the Schaft Creek project may not occur on a timely basis, or at all; fluctuations in metal prices and currency exchange rates; conditions in the financial markets and overall economy may continue to deteriorate; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of the metallurgical testwork; the uncertainty of the estimates of capital and operating costs, recovery rates, and estimated economic return; the need to obtain additional financing and uncertainty as to the availability and terms of future financing; the possibility of delay in exploration or development programs or in construction projects and uncertainty of meeting anticipated program milestones; uncertainty as to timely availability of permits and other governmental approvals.
A more complete discussion of the risks and uncertainties facing Copper Fox is disclosed in Copper Fox's continuous disclosure filings with Canadian securities regulatory authorities at www.sedar.com. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Copper Fox disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.
SOURCE: Copper Fox Metals Inc.For further information:
Investor line 1-866-913-1910 or J. Michael Smith, EVP, at 1-604-689-5080.