Teck 75% / Copper Fox 25% of Schaft Creek Joint Venture
Copper Fox will host an investor and analyst conference call at
10:00 am (PDT), Wednesday, July 17, 2013
Dial-in at 1-888-231-8191
VANCOUVER, July 16, 2013 /CNW/ - Copper Fox Metals Inc. ("Copper Fox") (TSX-V: CUU) today announced the
formation of a joint venture (the "Schaft Creek Joint Venture") with
Teck Resources Limited ("Teck") to further explore and develop the
Schaft Creek project located in northwestern British Columbia, Canada.
"This partnership is a key milestone for Copper Fox Metals and reflects
the spirit of the 2002 Option Agreement with Teck," says Elmer Stewart,
President and CEO of Copper Fox. "We are pleased to have Teck as our
partner and look forward to the next phase of our relationship. The
terms of the Schaft Creek Joint Venture Agreement reflect the advanced
stage of the project, and with Teck's expertise in the development and
operation of large mining projects and strong commitment to responsible
mining we are confident the Schaft Creek project will continue to
benefit the Tahltan people, local communities and shareholders.
This agreement gives Copper Fox immediate access to funds and a viable
partner to continue the work we have done on the Schaft Creek property
without diluting Copper Fox's 25% interest in the Schaft Creek Joint
Venture. With Teck's agreement to fund future costs, we have reduced
the uncertainty around Copper Fox's future expenditures for the
Dale Andres, Senior Vice President, Copper for Teck, commented "This
agreement represents an important milestone for our relationship with
Copper Fox. We are pleased with the progress they have made and
believe they will continue to be a valuable partner going forward."
Terms of the Agreement
The agreement replaces and supersedes the 2002 option and joint venture
agreement between Teck and Copper Fox in connection with Schaft Creek.
Teck will hold a 75% interest and Copper Fox will hold 25% in the Schaft
Creek Joint Venture.
Teck will be the operator of the Schaft Creek Joint Venture.
Teck will pay a total of $60 million in three direct cash payments to
Copper Fox: $20 million upon signing the Schaft Creek Joint Venture
Agreement, $20 million upon a Production Decision, and $20 million upon
the completion of the mine facility.
In addition, Teck will fund 100% of costs incurred prior to a production
decision up to $60 million; Copper Fox's pro rata share of any
pre-production costs in excess of $60 million will be funded by Teck
and the direct cash payments payable to Copper Fox will be reduced by
an equivalent amount, and Teck will fund any additional costs incurred
prior to a production decision, if required, by way of loan to Copper
Fox to the extent of its pro rata share, without dilution to Copper
Fox's 25% joint venture interest.
On signing Teck will reimburse $3.93 million for Schaft Creek mineral
tenure acquisition costs and costs related to Stewart Bulk Terminal
land reservation agreement incurred by Copper Fox.
Management of the Joint Venture will be made up of two representatives
from Teck and Copper Fox with voting proportional to equity interests.
Teck has agreed to use all reasonable commercial efforts to arrange
project equity and debt financing for project capital costs of
constructing a mining operation upon a production decision being made;
Teck has agreed to fund Copper Fox's pro rata share of project capital
costs by way of loan, if requested by Copper Fox, without dilution to
Copper Fox's 25% joint venture interest.
Teck and Copper Fox's Interest in the Liard Shares
The shares representing the 78% interest in Liard Copper Mines Limited
("Liard") that are included in the Schaft Creek Joint Venture will be
held in the name of Teck for the benefit of Copper Fox (25%) and Teck
(75%). Liard holds a 30% net profits interest in the Schaft Creek
Summer 2013 Exploration Program
The Schaft Creek Joint Venture intends to approve a Phase I, 2013 summer
program aimed at increasing the value of the Schaft Creek project. The
program will consist of approximately 10,000 metres of diamond drilling
and geotechnical studies. The objective of the drill program is to test
the extension to the east of the mineralization in the Paramount Zone
and to collect additional geotechnical information for ongoing pit
slope stability studies. Drilling is expected to begin before the end
of July 2013.
BC Hydro Agreement
In March 2013, Copper Fox entered into a Facilities Study Agreement with
the British Columbia Hydro and Power Authority ("BC Hydro") to assess
the electrical and equipment requirements to connect the Schaft Creek
project to the forthcoming BC Hydro Bob Quinn electrical substation.
Joint Venture Agreement on SEDAR
The full terms of the Schaft Creek Joint Venture are set out in the
definitive Joint Venture Agreement between Copper Fox and Teck dated
July 15, 2013. A copy of the Agreement will be made available under
Copper Fox's profile on Sedar at www.sedar.com.
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. In addition to Copper Fox's interest in the Schaft Creek
Joint Venture, Copper Fox holds, through its wholly-owned subsidiaries,
mineral tenures located in Pinal County, Arizona (the 'Sombrero Butte
Copper Project') and in Miami, Arizona (the 'Van Dyke BLM Claims').
The Sombrero Butte copper project consists of 2,887 acres located in
the Bunker Hill Mining District, 44 miles northeast of Tucson and the
35 Van Dyke BLM Claims are located to the west of the Van Dyke copper
deposit in Miami, Arizona. For further information on these mining
projects, please refer to the July 9, 2012 and April 12, 2013 news
releases found at the Company's website 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
formation, terms and future activities of the Schaft Creek Joint
Venture; further exploration and development of the Schaft Creek
project; direct cash payments to Copper Fox upon a Production Decision
and upon the completion date of a mine; the timing, scope and
objectives for the 2013 summer drilling program; financing to advance
the Schaft Creek project, including project equity and debt financing
for projected capital costs of construction of a mining operation; the
timing and scope of drilling for the 2013 summer program at Schaft
Creek; and the Facilities Study Agreement with BC Hydro.
In connection with the forward-looking information contained in this
news release, Copper Fox has made numerous assumptions. 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: the Schaft Creek Joint
Venture may not result in a Production Decision being made, or the
construction of a mine; further exploration and development of the
Schaft Creek property may not occur as expected; cash payments to
Copper Fox may not be paid by Teck in the quantum or timing expected,
or at all; financing commitments may not be sufficient to advance the
Schaft Creek project as expected, or at all; the timing and scope of
the 2013 summer drilling program may not be initiated or completed as
expected; and the Facilities Study Agreement with BC Hydro may not
result in the connection of the Schaft Creek project to the forthcoming
BC Hydro Bob Quinn electrical substation as currently anticipated.
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:
For additional information:
Mr. J. Michael Smith, Executive Vice President
Tel: (604) 689-5080