Investors

A. Copper Fox is focused on the exploration and development of large, potentially long-life copper projects in North America.  Our strategy is simple, acquire underexplored and or misunderstood porphyry copper projects, advance these projects through the various exploration/development stages and, if successful, monetize the projects when they yield a fair value return to shareholders.  Copper is an important critical metal to achieve the goal of a low carbon economy as well as multiple other social and industrial uses including infrastructure replacement and electrical transmission.  The near to medium-term supply/demand fundamentals are positive with demand forcasted to exceed supply in late 2024, early 2025.   Our project portfolio combined with the supply/demand forcast are important aspects of executing on our corporate strategy.

A. There is a significant gap between the recently established net assest value (NAV) of Copper Fox and its current market price.  In todays market, for junior companies like Copper Fox, the share price would be expected to trade in the order of 0.3 times NAV, currently Copper Fox is trading at 0.1 times NAV.  Copper Fox’s NAV is based on the 2020 and 2021 Preliminary Economic Assessments for the Van Dyke and Schaft Creek projects and does not include the recently added Eaglehead resource update announced in August 2023.  Several market factors can contribute to the gap between the market price and valuations, especially in junior resource companies, such as micro and macro economic events, market awareness, commodity prices, market sentiment and investor perception to name a few.

A. For its two advanced stage projects, Copper Fox focusses on the discounted after-tax project valuations stated in US$. The metal prices and foreign exchange rates (‘FOREX’) used in the financial analysis of advanced stage projects are based on long-term industry consensus forecasts as at the Effective Date of the Technical Reports.  These parameters, as well as capital, and operating and sustaining costs, change over time which in turn can materially impact either positively or negatively the conclusions and project valuations.  For example, the FOREX used in the 2013 Schaft Creek Feasibility Study was US$1.00:C$0.97 whereas the long-term FOREX in the 2021 PEA’s for the Schaft Creek and Van Dyke projects was US$1.00:C$0.77; a significant positive difference in Canadian dollar terms. The metal pricing used in the 2021 PEA for Schaft Creek was US$3.25/lb Cu, US$10/lb Mo, US$1,500/oz Au and US$20/lb Ag.  A copper pricing of US$3.15/lb was used in the 2021 PEA for the Van Dyke project.  Since the Effective Dates of the Schaft Creek and Van Dyke PEA’s, long-term consensus pricing for metal has changed significantly. The current long-term concensus metal pricing used by Copper Fox in US$ is $3.75/lb Cu, $20/lb Mo, $1,750/oz Au, $20/oz Ag.  To illustrate the net change in the discounted after-tax Net Present Value (NPV) for the Schaft Creek project, a US$0.25/lb increase in copper increases the NPV by approximately US$250 million, for every US$1.00/lb increase in molybdenum the NPV increases by US$58 million, and every US$100 increase in gold the NPV increases by US$89 million.  As these examples demonstrate, changes in the FOREX and long-term metal price can have a significant impact on project valuation.

A. The insiders own approximately 58% of the shares of Copper Fox.  The Company’s efforts have resulted in successive increases in discounted after-tax valuations for both the Schaft Creek and Van Dyke projects and a significant increase in Copper Fox’s ownership of copper-gold-molybdenum-silver in all resource categories.  Our recent success at Eaglehead is a strong indication that our project acquisition strategy works, and that management has the experience and ability to identify potential opportunities to increase value. Copper Fox employs the same strategy at Mineral Mountain and Sombrero Butte completing the exploration activities required to advance these projects to the drill testing stage.  Encouraged by the fact that copper is designated as a critical metal and bullish supply/demand fundamentals in conjunction with identified project enhancements, the corporate strategy is to continue to add value in the near term by advancing the Schaft Creek and Van Dyke projects to a stage that demonstrates fair value at which time a monetization decision could be taken. 

A. Yes, with the cash on hand the work programs on Copper Fox’s operated projects would be fully funded to the end of fiscal 2023 and into 2024.  The process to prepare a budget and program for 2024 could only start when all data from the 2023 activities have been received and interpreted.  At that time, a determination would be made on what activities are required to advance each project to the next level.  When the budget and programs are established they are presented to the Board of Directors for review and approval.  The Schaft Creek Joint Venture agreement requires Teck Resources Limited to provide all the funding for approved programs on the Schaft Creek project.

A. Both areas are recognized as “proven copper provinces” in North America with significant potential to discover large “world class” polymetallic porphyry copper deposits.  Both areas are Tier 1 geopolitically stable pro-mining jurisdictions with excellent infrastructure and rigorous environmental and permitting processes which are well defined, manageable and achievable.  

A. In BC, the Schaft Creek and Eaglehead projects are located in Tahltan territory, Copper Fox has worked with the Tahltan Nation since 2005 when it commenced exploration work on the Schaft Creek project.  Copper Fox has developed a strong relationship with the Tahltan Nation through open and transparent discussions on issues that are important to the Nation, such as respect for cultural and traditional values, wildlife management, environmental assessments, employment opportunities and participation in community and social affairs.  In Arizona, compliance with state and federal laws along with engaging with people and communities within the vicinity of our projects is a core principle of the Corporations ESG policy and the basis of our community relationship and outreach policies.

A. The Schaft Creek, Van Dyke and Eaglehead projects each have established resources exceeding billions of pounds of copper, more if looked at on a copper equivalent basis.  The deposits on these projects are open in several directions indicating significant potential to expand the resource base.  

The Mineral Mountain and Sombrero Butte exploration stage projects are considered to have significant potential to result in a new copper discovery.  These projects exhibit large porphyry ‘footprints’, intrusive rocks of the right age, and multiple exploration targets all displaying the mineralization alterations and geophysical signatures associated with porphyry copper systems.

A. Only Teck can answer that question. Schaft Creek is one of the largest undeveloped porphyry copper deposits in North America with substantial by-product metal credits.  Since the project was elevated to Teck’s Project Satellite initiative in 2017 the Schaft Creek Joint Venture has been investigating various optimization alternatives with the overall objective of surfacing value.  The 2023 budget for Schaft Creek is estimated to be in the order of C$17.2 million, funded by Teck and is the largest program undertaken by Teck since formation of the Schaft Creek Joint Venture. Since the project was elevated to Teck’s Project Satellite initiative in 2017 the Schaft Creek Joint Venture has been investigating various optimization alternatives with the overall objective of surfacing value.  The 2021 Preliminary Economic Assessment was based on the results of the work programs completed since 2013 by Teck, as Operator of the Schaft Creek Joint Venture, which yielded a US$842 million (100% basis) after-tax, discounted value of the project.  Going forward, the Schaft Creek Joint Venture is focussing on improving metallurgical recoveries, reducing the Life of Mine strip ratio, reducing the pre-production timeline and pursuing additional project enhancements to increase project valuation.  With a 133ktpd throughput scenario, (@ 92% nominal capacity) and forecast to produce approximately 400,000t of copper concentrate annually, Schaft Creek is one of the large development stage projects under consideration and would be of considerable interest to metal trading and smelting companies and all large copper producers, including Teck.

A. Simply put, Copper Fox wanted to assess the potential increase in project valuations based on the results of work completed since the Effective Date of the previous Technical Reports.  Updated resource estimates are typically completed when additional analytical results can be included with the updated resource estimate providing the basis on which a PEA can be completed.  The PEA’s are Technical Reports prepared in accordance with National Instrument 43-101 by qualified independent engineering firms and provides Copper Fox with an assessment of the technical and financial aspects of the project along with recommendations going forward.  In addition, these reports provide Copper Fox an opportunity to update its shareholders, the mineral industry and the investing public on the technical and financial status for the projects based on accepted industry methodology, project specific input parameters and the use of current long-term consensus metal prices.  The recommendations these studies provide could identify potential project enhancements for further investigation to surface additional value in each project.

For example, in 2013 Copper Fox completed a feasibility study on the Schaft Creek project that yielded (on a 100% basis) an after-tax discounted value of US$64 million.  While this was considered positive, the project valuation was substantially below that required for a sanctioning decision but sufficient enough to warrant further investment to continue exploration and investigate project optimization/potential enhancements.  The 2013 feasibility study resulted in Teck exercising its ‘back in right’, clarified the ownership interest of the Schaft Creek project and led to the creation of the Schaft Creek Joint Venture.  The 2021 PEA was based on the results of the work programs completed by Teck since 2013, as Operator of the Schaft Creek Joint Venture, and yielded (on a 100% basis) an after-tax discounted value of US$842 million, an increase of US$778 million.  Since completion of the 2021 Schaft Creek PEA, the Schaft Creek Joint Venture set out a $6.6 million budget for 2022 and a $17.2 million budget for 2023 to investigate the project enhancements identified by the 2021 PEA.  Going forward, the Schaft Creek Joint Venture is focussing on improving metallurgical recoveries, reducing the Life of Mine strip ratio, reducing the pre-production timeline and pursuing additional project enhancements to increase project valuation.  

Since completion of the 2015 Van Dyke PEA, our work programs investigated the identified project enhancements that increased our after-tax discounted NPV from US$145 million to US$645 million in 2021.  This significant increase was achieved due to a better understanding of the controls on mineralization, a significant increase in total soluble copper content, higher projected copper recoveries, and a significantly longer mine life.  In addition to these positive increases the 2021 PEA included updated capital, operating and sustaining costs, a copper price of US$3.15/lb and provided Copper Fox with the confidence in the business opportunity along with identified enhancements which with positive results could potentially increase project valuation along with the updated geological model strongly indicating the potential to significantly expand the deposit to the southwest.