A. Copper Fox is focused on copper in North America. Our strategy is simple, acquire potentially large, low cost porphyry copper projects, explore these projects and if successful advance them to the stage where monetization of the project yields a positive return to shareholders.
A. There is a significant gap between the NAV of Copper Fox and its current market price. Advanced stage projects supported by independent engineering studies can be used to estimate NAV. A number of market factors can contribute to the gap between the market price and NAV especially in junior resource companies such as low commodity prices and market sentiment, these are but a few of the factors.
A. The metal prices and foreign exchange rates (‘FOREX’) used in valuing advanced stage projects are long term industry concensus forecasts. These parameters change over time which in turn can materially impact the conclusions and economic forecasts. For example, the FOREX used in the 2013 Schaft Creek Feasibility Study was $US1.00:$C0.97 whereas the current long term forecast of the FOREX is $US1.00:$C0.77; a significant positive difference in terms of Canadian dollar terms. The base case analysis used a copper price of $US3.25/lb or $C3.35/lb, today the long term forecast for copper is $US3.15/lb or $C4.09/lb. As these examples demonstrate, changes in the FOREX and long term metal prices can have a significant impact.
A. The insiders own approximately 58% of the shares of Copper Fox and they continue to accumulate shares. The Company’s portfolio of advanced and exploration stage projects allows it to advance its corporate strategy which is the long term objective of the insiders and and keeps them interested.
A. The Schaft Creek project is managed and funded by Teck Resources Limited (“Teck”) which allows Copper Fox to focus on its 100% owned projects. The 2020 budget allows for completion of the Eaglehead acquisition and a combination of surface/geophysical exploration on our Sombrero Butte and Mineral Mountain projects. At Van Dyke, the updated resource estimate has significantly expanded the size of the deposit and identified a large target to the southwest with potential to expand the deposit. The Company will look at various options to source funds to continue work on the Van Dyke project.
A. The province of BC and the state of Arizona are geopolitically stable pro-mining jurisdictions with excellent infrastructure. Both jurisdictions have rigorous environmental and permitting processes which are well defined, manageable and achievable. There have been no environmental issues identified on any of the Company’s projects. Copper Fox’s core values include transparency, environmental protection and inclusion for all stakeholders and are incorporated into all activities completed by the Company.
A. In BC, the Schaft Creek deposit is located in Tahltan territory, Copper Fox has worked with the Tahltan Nation since 2005 when it commenced operations on the deposit. Copper Fox has developed a strong relationship with the Tahltan Nation through open and transparent discussion 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 ongoing communication with the people living around our projects is the core of our community relationship policies.
A. Copper Fox has, through a combination of acquisition and exploration, established significant resources of copper, gold, molybdenum and silver in the Schaft Creek (25% ownership) and Van Dyke (100% ownership) deposits.
The Schaft Creek and Van Dyke deposits remain open to extension and a number of large exploration targets have been identified in proximity to these deposits but not yet drilled.
Sombrero Butte and Mineral Mountain are exploration stage copper projects either in proximity to or on structural trends that hosts other large Laramide age copper deposits in the Arizona porphyry copper belt. Several targets with large mineralized footprints, alteration patterns and chargeability anomalies indicative of porphyry copper deposits have been identified on each project. Geophysical exploration of these targets is required prior to drill testing the depth extent of the surface mineralization.
A. Only Teck can answer that question. Since the project was elevated to Teck’s Project Satellite initiative in 2017 the Schaft Creek Joint Venture has been investigating vaious alternatives with the overall objective of surfacing value. The 2018 Sizing and Infrastructure Alternatives study recommended a more in-depth study on a 133ktpd scenario in 2019. Teck like all other copper producing companies, requires a pipeline of projects to evaluate and then develop those projects that meet its corporate requirements to sustain its business. The size of the Schaft Creek deposit and exploration potential provides optionality and expansion potential in a rising commodity cycle.
A. Our strategy is to invest in projects that have potential to create value through exploration and development activities. Copper Fox acquired the Van Dyke project in 2012. At that time the size of the deposit and historical metallurgical testwork indicated the potential to establish a current resource and advance the project to the Preliminary Economic Assessment (‘PEA’) stage. The PEA provided a first time independent conceptual engineering plan and an estimated value for the project. To the end of 2014, the Company spent approximately $US6.5 million in acquisition, exploration and verification studies required to complete the PEA. The 2015 Van Dyke PEA demonstrated a robust post-tax net present value of approximately $US149.0 million and a 28% internal rate of return thus creating a significant increase in value.
The geological modelling completed for the PEA indicated potential to increase the size of the Van Dyke deposit. Projects with a larger resource base typically have a longer mine life which implies increased valuation. The 2019 work tested the potential outlined in the PEA and resulted in adding approximately 400 million lbs of soluable copper in various resource categories over that used in the PEA and demonstrated that the deposit remains open to expansion to the southwest. The increase in the resource base and upgrading a portion of the resource to the Indicated category are positive indications for a higher project valuation.