VANCOUVER, April 12, 2013 /CNW/ - Mr. Elmer Stewart, President and CEO of Copper Fox Metals Inc. ("Copper Fox" or the "Company") (TSX-V: CUU) is pleased to announce the acquisition of 100% of the interests of Bell Resources (Nevada) Corporation, a related entity of Bell Copper Corporation ("Bell Copper") in the Van Dyke copper deposit (the "Van Dyke Deposit") located in Miami, Arizona (see News Release dated July 9, 2012). Under the terms of the acquisition, Copper Fox acquired the Van Dyke Deposit by paying to Bell Copper CDN$500,000 in cash, paying to the vendors of the Van Dyke Deposit US$1.5 million and assuming the continuing obligations in respect of the Van Dyke Deposit, subject to certain amended terms and conditions.
|a)||A number of historical studies have been completed on the Van Dyke Deposit between 1973 and 1981 by Occidental Minerals Corporation ("Occidental"), AMAX and Utah, all large copper producing companies at that time,|
|b)||A historical estimate* of 119.2 million tons of oxide copper mineralization with an average grade of 0.52% copper (estimated to contain 1.2 billion pounds of copper) prepared by Occidental in 1976 is reported for the Van Dyke Deposit,|
|c)||Diamond drilling on the Van Dyke deposit indicates several extensions including the reported existence of primary sulphide copper mineralization below and to the east of the oxide mineralization, and|
|d)||Preliminary in-situ leaching metallurgical testwork indicated copper recoveries up to 80% using hydrofracturing to improve fluid circulation.|
*The historical estimate reported for the Van Dyke Deposit is historical in nature, Copper Fox wishes to clarify that an independent Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, and accordingly, Copper Fox is not treating the above historical estimate as current mineral resources or mineral reserves. In order to verify the historical reserves a current Feasibility Study would be required which would include additional diamond drilling, metallurgical testwork, updated cost assumption and metal pricing.
Mr. Stewart, President and CEO of Copper Fox stated, "The acquisition of the Van Dyke Deposit adds another significant under explored copper asset to the Company. The historical work completed on this deposit including resource estimation, preliminary in-situ leaching testwork and an economic evaluation, all completed on or before 1981 yielded positive results. The historical information also suggests possible extensions of the copper mineralization at depth and along strike. This acquisition complements our large Schaft Creek copper-gold-molybdenum-silver deposit and provides the Company an under explored advanced project with excellent logistics located in a major copper producing district in Arizona."
Van Dyke Deposit:
The Van Dyke oxide copper deposit is located in the Globe-Miami Mining district of Arizona; 90 miles east of Phoenix, Arizona which host several large producing copper mines. The Van Dyke property was developed in the early 1900's and is reported to have produced 11.8 million pounds of copper between 1929 and 1945 from copper oxide mineralization with a reported grade of 5.0 % copper. Between 1968 and 1980, Occidental held the property. During that time a total of 70 exploration holes (sixty-two of which encountered measureable copper mineralization) were completed on the Van Dyke property from which 46 were used to estimate a historical resource. Between 1973 and 1976, four historical estimates were completed on the Van Dyke oxide copper deposit by major copper producing companies such as Occidental, Amax, and Utah International. The historical estimates range from 103,000,000 tons grading 0.53% copper (Occidental) to 140,858,000 tons grading 0.40% copper using a 0.20% copper cutoff. A polygonal method was used to complete two of the historical resource estimates and cross-sections were used for the balance of the historical estimates.
In 1976, Clyde R. Caviness authored a report dated March 1, 1976 and entitled "Van Dyke Ore Reserve Report (the "Caviness Report") on behalf of Occidental, prior to the implementation of NI 43-101. The Caviness Report was completed using 34 diamond drill holes and cutoff grades that ranged from 0.10% to 0.40% copper, and was based on diamond drilling and information compiled by other companies who reviewed the data for the Van Dyke Deposit. Caviness estimated the volume of the mineralization on each cross-section within the deposit and estimated the volume of the mineralization between the cross-sections. The maximum distance of extrapolation used for the estimation was 400 feet between drill holes. Caviness used the extension of the mineralized trend, geology and grade of adjacent drill holes to extrapolate between the drill holes. The tonnage factor for the estimate was 12.5 cubic feet per ton. Copper assays over 2.5% were not used in the estimate. Caviness considered the estimate to be a geological ore reserve as no mining method was selected for the deposit. At a 0.20% copper cutoff, Caviness estimated that the oxide portion of the Van Dyke Deposit contained 119,202,000 tons grading 0.52% total copper. Caviness also identified several possible extensions to the deposit based on drill results. Copper Fox has not completed the work necessary to verify the historical estimate contained in the Caviness Report. Accordingly, Copper Fox is not treating the historical estimates contained in the Caviness Report as NI 43-101 compliant categories of mineral resources or mineral reserves based on information prepared by or under the supervision of a QP.
In 1981, the Van Dyke Copper Company retained Thomas Clary (geologist), James Fletcher (mining engineer) and Floyd Ingram (geologist) to complete a report entitled "Economic Evaluation of the Van Dyke Oxide Copper Deposit, Miami, Arizona" dated October 15, 1981 (the "Van Dyke Report"). The Van Dyke Report is historical in nature and yielded the following results:
|Oxide Copper Grade||percent||0.53|
|Recovery Method||na||In Situ Leaching (SX-EX)|
|Estimated Copper recovery||percent||70.0|
|Total Recoverable Copper||pounds||742,000,000|
|Annual Copper Production||pounds||51,840,000|
|Operating Cost/pound copper produced||dollars||$0.44|
|Annual Cash Flow||dollars||$21,900,000|
*The Van Dyke Report is historical in nature. Copper Fox wishes to clarify that an independent Qualified Person has not done sufficient work to classify the historical estimate Van Dyke Report as current mineral resources or mineral reserves, and accordingly, Copper Fox is not treating the Van Dyke Report as current mineral resources or mineral reserves. The reported historical information, metallurgical recoveries and cost assumptions used in the Van Dyke Report have not been verified and this historical data has not been adequately reviewed by independent Qualified Persons. To upgrade the information contained in the Van Dyke Report, additional diamond drilling, metallurgical testwork, updated cost assumption and metal pricing would be required to complete a current Feasibility Study.
The Van Dyke Report also stated "The mine life is expected to continue due to possible ore reserves and potential ore reserves" (see above cautionary note regarding resources and reserves).
The Van Dyke Report was prepared for the Van Dyke Copper Company (property owners) on October 15, 1981 prior to the implementation of NI 43-101. The Van Dyke Report was prepared using a copper price of $0.85 per pound (the relevant price at the time of the estimate), estimated metal recovery based on preliminary testwork, the application of a proposed mining method and labor rates applicable at that time. However, the Company has not completed the work necessary to verify the historical estimate contained in the Van Dyke Report. Accordingly, the Company is not treating the historical estimate contained in the Van Dyke Report as NI 43-101 compliant categories of mineral resources or mineral reserves based on information prepared by or under the supervision of a QP.
In 1979, the New Mexico Tech Research Foundation located at Socorro, New Mexico completed preliminary metallurgical testwork to determine if the oxide copper mineralization in the Van Dyke Deposit was amendable to in-situ leaching on behalf of Occidental. This work was completed under the direction of Dr. Roshan B. Bhappu. Occidental subsequently completed a pilot program of two 1,000 foot deep holes, 75 feet apart, the results of which indicated copper recoveries up to 80% should be realized using in-situ leaching and hydrofracturing to improve fluid circulation.
Elmer Stewart, P.Geol, has reviewed the available data, including drill sections, surface maps, and additional supporting information sources, and believes that the historic estimate was conducted in a professional and competent manner and is relevant for the purposes of the Company's decision to acquire Bell Copper's interest in this property. In the study, the historic estimate was sub-categorized as a geological ore reserve as no mining method had been applied during the preparation of this historical estimate.
Copper Fox has not completed the work necessary to verify the above mentioned historical estimates. Accordingly, Copper Fox is not treating the above mentioned historical estimates as NI 43-101 compliant categories of mineral resources or mineral reserves based on information prepared by or under the supervision of a QP. The Company believes that the historical estimate categories outlined above for the Van Dyke Deposit cannot be compared to the CIM definitions for resource categories.
The vendors of the Van Dyke Deposit retain a 2.5% Net Smelter Return ("NSR") production royalty from the Van Dyke Deposit. Copper Fox, in its' sole and absolute discretion, has the right to purchase up to 2% of the 2.5% NSR for a period of two years by the payment of US$1.5 million for each 1% NSR purchased.
Elmer B. Stewart, MSc. P. Geol., President of Copper Fox, is the Company's nominated Qualified Person pursuant to National Instrument 43-101, Standards for Disclosure for Mineral Projects, has reviewed the technical information disclosed in this news release.
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, AB and an operations office in Vancouver, BC. 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 56,197.75 hectares (138,868 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 47,863.41 hectares (118,273 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 historical resource estimates of the Van Dyke Deposit; work required to upgrade the historical resource estimates of the Van Dyke Deposit; continuing obligations in respect of the Van Dyke Deposit; the delivery of the Positive Bankable Feasibility Study to Teck; the commencement of the 120 day period for which Teck may exercise its Back-in Right under the Teck Option Agreement; and the aggregate incurred Expenditures.
In connection with the forward-looking information contained in this news release, Copper Fox has made numerous assumptions, regarding, among other things: the reported historical resource estimates of the Van Dyke Deposit, the advanced stage of the Van Dyke Deposit, the logistical location of the Van Dyke Deposit and the expected mine life of the Van Dyke Deposit. 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 actual mineralization in the Van Dyke Deposit may not be as favourable as suggested by the historical estimates; the historical estimates may not be reliable or indicative of any commercial benefit to Copper Fox; Copper Fox may not be able to comply with its ongoing obligations regarding the Van Dyke Deposit; 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; fluctuations in copper prices and demand; commodity 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 to develop properties 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.