Copper Fox reports 2011 annual financial results and a corporate update
Feb 28, 2012, 14:54 ET
VANCOUVER, Feb. 28, 2012 /CNW/ - Copper Fox Metals Inc. ("Copper Fox" or the "Company") (TSX-V: CUU) is pleased to announce its operating results for the 2011 fourth quarter and year-end results. During the year, Copper Fox acquired additional mineral tenures around the Schaft Creek project, completed a large Titan-24 DCIP& MT survey, purchased shares in Liard Copper Mines, completed metallurgical test work on the mineralization from the Paramount zone and completed a 22 hole diamond drilling program of various purposes totaling 9,662.3m at Schaft Creek.
During the quarter, Copper Fox also made considerable progress toward completing the feasibility study. Copper Fox incurred a net loss for the fourth quarter of $692,576 ($0.00 loss per share) and a loss of $3,882,381 ($0.01 loss per share) for the year ended October 31, 2011. 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.
Schaft Creek - An Emerging Porphyry Copper District
The 2011 program demonstrated that the Schaft Creek property has the potential to host a number of porphyry style copper +/- gold-silver-molybdenum deposits. The intersection of significant copper-gold-silver-molybdenum mineralization located 1,200m north of the Paramount zone associated with a large Titan-24 chargeability anomaly and the intersection of copper-gold-silver-molybdenum mineralization in a geotechnical hole located 300m east of the Paramount in an interpreted "leakage" zone supports the mineral potential of the Schaft Creek property. These mineralized intervals in conjunction with the technical aspects of the Schaft Creek Mineral Trend strongly indicate considerable potential to host additional deposits at Schaft Creek.
Tetra Tech WEI Inc. (formerly Wardrop) the main contractor on the Schaft Creek feasibility study, is working to complete this study by the end of March of 2012. Feasibility studies are complex and require a substantial amount of detailed engineering work with very narrow estimation limits. Copper Fox holds a 100% working interest in the Schaft Creek property subject to a 30% Net Proceeds Interest held by Liard Copper Mines Limited. The Option Agreement between Copper Fox and Teck requires Copper Fox to deliver Teck Resources Limited ("Teck") a feasibility study to earn the 78% interest in Liard Copper Mines held by Teck and start the 120 day period for Teck to make its election regarding participation in the Schaft Creek project. Tetra Tech WEI Inc. is currently working on a detailed mine plan including the first five years of mining operations. The mine plan includes, for example, detailed estimates of material movement, haulage distances and waste dumping locations. Mine planning is a fundamental part of the feasibility study and has a significant impact on the economics of the Schaft Creek deposit. Until this work is completed, completion of the feasibility study is not possible. Work related to all other aspects of the feasibility study, except the economic sensitivity analysis, have essentially been completed.
Quantec Titan-24 DCIP and MT Survey:
During the quarter, a total of 38.8 kilometres of a Titan-24 DCIP& MT survey was completed over an area extending from the north end of the Paramount zone to the ES zone (a distance of 3.0 kilometres) and an 800m long portion of the GK zone. This survey located large chargeability anomalies on the Mike, ES and GK zones and has extended the chargeability signature of the Paramount zone to the north along the mineralized corridor referred to as the Schaft Creek Mineral Trend.
2011 Diamond Drilling Program:
During the fourth fiscal quarter, four diamond drills worked on the Schaft Creek property collecting geotechnical data for the feasibility study and delineating the zone of higher grade mineralization in the Paramount zone. At the end of the 2011 drilling program, two significant aspects of the Schaft Creek project are notable, i) the size of the zone of high grade mineralization in the Paramount zone has not yet been defined and, ii) a new zone of copper mineralization that correlates with a chargeability anomaly approximately 1,200m north of the Paramount zone has been located. To provide an example of the potential size of the Paramount zone, DDH CF415-2011, located 280m north of the previous drilling on the Paramount zone, intersected a 582m interval of mineralization including a 67m interval that averaged 1.10% copper equivalent.
Selected Financial Information
|Net Loss|| 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 mineral properties as well as its corporate overheads generally occur far in advance of projects being put in production and generating cash flow.
The Company's working capital deficit, defined as current assets less current liabilities, was $1,811,392 at October 31, 2011.
During the year, the Company raised a total of $18,685,671 from the completion of private placements totaling $15,038,046, 2,235,000 options exercised for total proceeds of $1,053,750 and 1,828,500 warrants exercised for total proceeds of $2,593,875. In addition, a Director loaned $3,900,000 to the Company. The loan is unsecured, bears no interest and there are no fixed terms of repayment. In October 2011 the Company issued 1,851,852 shares for repayment of $2,500,000 of this debt. Subsequent to year end, in January 2012, the Company issued 1,272,727 for repayment of the balance of this loan of $1,400,000.
At December 31, 2011, the Company had spent $74.2 million of qualifying expenditures towards the feasibility study. The Company will require additional capital to complete this study and to provide for the administration of its Vancouver and Calgary offices. The Company believes that it will be able to raise the capital required through the continued exercise of its outstanding options and warrants or through the public market. Although management has been successful in raising capital in the past, there is no assurance that these initiatives will be successful in the future. Circumstances that could affect liquidity include early positive or negative results from the feasibility study, the general state of the equity markets for junior exploration companies and the overall state of the economy.
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 (CUU-TSX-V) with a corporate office in Calgary and operations office in Vancouver.
The Company is working on completing a feasibility study on the Schaft Creek Mineral Deposit, one of the largest undeveloped copper, gold, molybdenum and silver deposits in North America. The feasibility study is being led by Tetra Tech WEI Inc. on a minimum 120,000 tpd open pit mine and is expected to be completed during the first quarter of 2012.
Copper Fox holds title and a 100% working interest in a contiguous 21,024.96 hectare (51,954 acre) property which includes the Schaft Creek deposit subject to a 3.5% Net Profits Interest held by Royal Gold, Inc., a 30% carried Net Proceed Interest held by Liard and an earn back option held by Teck Resources Limited ("Teck"). On delivery of a positive feasibility study on the Schaft Creek property, Copper Fox will earn a 78% interest in Liard from Teck. On receipt of a positive feasibility study Teck, has 120 days in which to elect to exercise its earn back option to acquire 20%, 40% or 75% of the Copper Fox interest in the Schaft Creek project. Should Teck elect to exercise its option for 75% they are required to fund subsequent property expenditures up to a total of 400% of those incurred by Copper Fox ($74.2 as of December 1, 2011) and arrange for project financing, including the Copper Fox portion. For full details of the option please refer to the Company's website www.copperfoxmetals.com.
In March 2011, the Company acquired mineral claims located adjacent to the Schaft Creek property totaling 2,978.32 hectares (7,360 acres) (the "March 2011 Mineral Claims") which are subject to a 2% Net Smelter Return ("NSR"). Copper Fox has the option to repurchase, at any time, one-half of the NSR on the March 2011 Mineral Claims for a total purchase price of $3 million. In September 2011, the Company acquired mineral claims located adjacent to the Schaft Creek property totaling 6,115.11 hectares (15,111 acres) (the "September 2011 Mineral Claims") which are subject to a 2% NSR. Copper Fox has the option to repurchase, at any time, one-half of the NSR on the September 2011 Mineral Claims for a purchase price of $1 million. The March 2011 Mineral Claims and the September 2011 Mineral Claims are subject to inclusion with the Schaft Creek project under the terms of the Area of Interest provisions of the Teck Option Agreement.
Additionally Copper Fox holds mineral claims totaling 3,947.06 hectares (9,753 acres) in the Liard Mining District of BC not subject to the Teck earn-back.
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 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 include statements about the quantum and quality of porphyry style copper=/- gold-silver-molybdenum deposits at the Schaft Creek property; results of recently competed metallurgical testwork on the Paramount zone of the Schaft Creek deposit; the size of the zone of high grade mineralization in the Paramount zone; a new zone of copper mineralization north of the Paramount zone; the completion of a detailed mine plan by Tetra Tech; a Resource Estimate update by Tetra Tech; the commencement of activities such as power and road access on the Schaft Creek property; the timing and completion of a feasibility study; the chargeability anomalies at the Schaft Creek project; the scope and timing of work on the outstanding sections of the feasibility study; completion of an Environmental Assessment Application / Environmental Impact Statement; the potential to find additional porphyry style copper deposits within the Schaft Creek property; expected capital requirements to continue planned activities; expected sources and the adequacy of required capital resources; the results and interpretation of the high resolution airborne magnetic survey over the Schaft Creek project; the timing and scope of expected diamond drilling; the timing and completion of the Feasibility Study and Environmental Assessment application for the development of the Schaft Creek project; 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 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.
In connection with the forward-looking information contained in this news release, Copper Fox has made numerous assumptions, regarding, among other things: 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; the continued financing of the Feasibility Study and Copper Fox' operations; the anticipated analytical results of the current drilling and metallurgical testing programs. 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 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; a detailed mine plan may not be completed in a timely manner, or at all; the Feasibility Study may not be completed within the contemplated time frame, or at all; the Environmental Assessment Application / Environmental Impact Statement may not be obtained in a timely manner, or at all; an updated Resource Estimate may not be obtained in a timely manner, or at all; commencement of activities such as power and road access on the Schaft Creek property may not occur on a timely basis, or at all; the possibility that the metallurgical test work on the core samples does not recover significant percentages of copper mineralization; the possibility that future drilling on the Schaft Creek project may not occur on a timely basis, or at all; fluctuations in copper, the completed drill holes for which analytical results are not available may not return significant concentrations of either copper, gold, molybdenum or silver; commodity prices and currency exchange rates; 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.
For further information:
Investor line 1-866-913-1910 or J. Michael Smith, EVP, at 1-604-689-5080
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