CALGARY, June 1 /CNW/ - Copper Fox Metals Inc. (TSX-Venture: CUU) is very pleased to provide an update on the progress of the Feasibility Study and the Geophysical Survey that is currently underway on the Schaft Creek deposit, one of Canada's largest undeveloped copper-gold-molybdenum-silver deposits located in northwest British Columbia, Canada. Copper Fox is working toward completion of the Feasibility Study on the Schaft Creek deposit by the end of 2010. Highlights of the work completed to date are outlined below.
- an estimate that 3.6% to 5.1% of the total waste rock mined could
potentially be net acid generating, a very low percentage compared to
other porphyry copper deposits,
- a higher-grade zone of copper-gold-molybdenum-silver mineralization
previously referred to as the West Breccia has been extended over a
distance of 2,500 metres ("m") and is open to the north, south and at
- a Section 11 Order has been received regarding the public
consultation process for the Environmental Assessment process,
- results of the TITAN-24 DCIP and MT geophysical Survey of the Schaft
Creek project are expected to be received and disseminated in early
Mr. Elmer B. Stewart, MSc. P. Geol, President and Chief Executive Officer stated "We are extremely pleased with the results received from the preparation of the Feasibility Study. The confirmation that a very low net acid generating potential exists from the waste rock mined is extremely good news from an environmental point of view. The potential for a higher-grade "starter pit" in the West Breccia zone is promising and should have a significant impact on the project economics. The Section 11 Order is a significant milestone and allows the project to move forward to the Environmental Assessment process".
Financing: Copper Fox has been funding the completion of the Feasibility Study through the exercise of warrants issued to insiders and shareholders totaling to date net proceeds of $3.0 million. There remains outstanding, a total of $6.5 million in warrants, of which $5.9 million are held by insiders of Copper Fox. Of these, a total of $5.1 million warrants expire on July 13, 2010 and the balance, $0.82 million, on October 21, 2010. The insiders plan to continue the exercise of their warrants to fund the completion of the Feasibility Study scheduled for the end of 2010. All of the above warrants are "in the money".
Capital Costs: As a part of the Feasibility Study, Copper Fox plans to complete a series of trade off studies with the view to reducing the initial capital cost related to the development of the Schaft Creek deposit. Copper Fox believes that it may be able to reduce the initial capital cost, projected in the September 2008 Preliminary Feasibility Study, through a number of initiatives including, but not limited to, reviewing the contingency and the use of contract mining services versus purchasing mining equipment.
Payback Period: In addition, Copper Fox is currently reviewing ways in which to shorten the "payback" period for the Schaft Creek deposit. The delineation of a higher-grade "starter pit" and the possibility of increasing the daily milling rate are two aspects of the Feasibility Study currently being reviewed.
Geological Model Update:
Cambria Geoscience Inc. has made significant progress on an updated Geological Model for the Schaft Creek deposit. The model is based on a compilation and verification of all diamond drill information, re-logging of some of the diamond drill core, construction of geological cross sections at 50 m intervals and incorporates the mineralization, alteration, fault structures, intrusions and hydrothermal breccias into a unified geological model.
This updated Geological Model for the Schaft Creek deposit shows that:
- the copper-molybdenum-gold-silver mineralization is constrained
within a 1,200 m wide fault bounded north-northwest trending
- the two major mineralized zones are the Main Zone (Liard Zone) a
broad, gently north-northwest dipping zone which abuts the
Paramount - West Breccia Zone previously referred to as the West
Breccia Zone (in the south) and the Paramount Zone (in the north),
- the Paramount - West Breccia Zone is a north-south striking zone of
higher-grade disseminated, fracture and breccia-hosted copper-
molybdenum-gold-silver mineralization that dips vertical to steeply
eastward and average about 100 to 150 m in width (widening at depth
to 200 m locally),
- the intrusive and volcanic host rocks on the flanks of the breccias
exhibit significantly higher copper grades than the deposit average,
- the higher-grade core to the Paramount - West Breccia Zone has a
horizontal strike length of 2500 m and is open to depth.
The model has identified drill targets to the north and to the south of the Schaft Creek deposit that could extend the limits of the mineralization and identified areas with excellent potential for infill diamond drilling that might better define a higher-grade zone copper-molybdenum-gold-silver mineralization within the Schaft Creek deposit.
Environmental Studies Update:
Copper Fox has been collecting environmental baseline information on the Schaft Creek area since mid 2005. As part of the ongoing environmental baseline studies, Copper Fox has completed 634 Acid/Base Accounting Samples and numerous Humidity Cell Tests whereby Copper Fox's consultant, Dr Kevin Morin, has concluded that approximately 3.6 to 5.1% of the total rock mined from the Schaft Creek deposit could potentially be net acid generating which is low compared to other porphyry copper deposits.
Environmental Assessment Certificate:
Copper Fox has received a Section 11 Order from the Government of British Columbia setting out the parameters of the public consultation process related to the application by Copper Fox for an Environmental Assessment Certificate. This is an important, major step forward and allows Copper Fox to commence the public consultation process as part of its ongoing environmental and the socio-economic impact studies related to development of the Schaft Creek deposit.
Elmer B. Stewart, MSc. P. Geol., President of Copper Fox, is the Corporation'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 company listed on the TSX-Venture Exchange (CUU). Copper Fox is focused exclusively on completing the Feasibility Study on Schaft Creek, one of the largest undeveloped copper, gold, molybdenum and silver deposits in Canada. Copper Fox has earned a 100% working interest in the Schaft Creek project subject to a 30% net proceeds interest held by Liard Copper Mines Limited ("Liard") a private company 78% owned by Teck Resources Limited ("Teck") and a 3.5% net profits interest held by International Royalty Corporation. Teck's 78% equity interest in Liard represents 23.4% of Liard's 30% net proceeds interest in the Schaft Creek project referred to as the "indirect interest". Copper Fox can earn the "indirect interest" by completing a "positive" Feasibility Study, under the terms of the 2002 Option Agreement with Teck.
Teck may at any time elect to exercise one of its "earn-back options" pursuant to the terms and conditions of 2002 Option Agreement. On receipt of a Positive Bankable Feasibility Study, as defined, Teck has 120 days in which to elect to either: i) exercise one of its earn-back options, or ii) retain a 1% net smelter return royalty, or iii) receive shares of Copper Fox to a value of $1,000,000.
If Teck exercises its earn-back option, then Teck can elect to acquire either 20%, 40% or 75% of Copper Fox's interest in the Schaft Creek Project from Copper Fox by solely funding subsequent expenditures equal to either 100%, 300% or 400% of Copper Fox's prior expenditures of which approximately $43 million have been incurred to date. If Teck elects to earn-back a 75% working interest, Teck will be responsible for arranging Copper Fox's share of project financing and will recover such project financing funds from Copper Fox's share of metal sales until payout is reached.
The Schaft Creek Project is a contiguous land package of claims that comprises 21,025 hectares and a further contiguous group of 3,947 hectares that is not subject to Teck's earn-back, situated in northwest British Columbia, Canada. On September 15, 2008, Copper Fox announced the results of a Preliminary Feasibility Study ("PFS") on the Schaft Creek deposit that contemplated processing 100,000 tonne per day from an open pit mine using a standard flotation recovery process. The PFS estimated the current Mineral Resources* (using a 0.2% copper equivalent cutoff) at Schaft Creek includes; Measured Resources of 436.5 million tonnes grading 0.30% copper, 0.23 g/t gold, 0.02% molybdenum and 1.55 g/t silver, Indicated Resources of 929.8 million tonnes grading 0.23% copper, 0.15 g/t gold, 0.02% molybdenum and 1.56 g/t silver.
*United States investors are advised that current Mineral Resources are not current Mineral Reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate and in keeping with "best practice principals".
On behalf of the Board of Directors
Elmer B. Stewart
President & 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 includes "forward-looking information" within the meaning of the Canadian securities laws. All statements, other than statements of historical fact, included herein and including, without limitation; anticipated results of geophysical surveys or drilling programs, anticipated availability and terms of future financings; estimated timing and amounts of future expenditures; Copper Fox's future production, operating and capital costs; operating or financial performance; geological interpretations and potential mineral recovery processes, are forward-looking statements. Information concerning mineral reserve and resource estimates 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. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies. For any forward looking information given, management has assumed that the geological, metallurgical, engineering, financial and economic advice it has received is reliable, and is based upon practices and methodologies which are consistent with industry standards. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. Important factors that could cause actual results to differ materially from Copper Fox's expectations include: fluctuations in copper and other commodity prices and currency exchange rates; uncertainties relating to interpretation of drill results and the geology, continuity and grade of mineral deposits; uncertainty of estimates of capital and operating costs, recovery rates, production estimates and estimated economic return; the need for co-operation of government agencies and native groups in the exploration and development of properties and the issuance of required permits; 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; and other risks and uncertainties disclosed in Copper Fox's continuous disclosure filings with Canadian securities regulatory authorities at www.sedar.com. The forward-looking information in this news release is based on Copper Fox's current expectations and Copper Fox assumes no obligations to update such information to reflect later events or developments, except as required by law.
SOURCE Copper Fox Metals Inc.
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