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.