Teck 75% / Copper Fox 25% of Schaft Creek Joint Venture
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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 project."
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 property.
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