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 large, low-cost porphyry copper projects, explore these projects and, if successful, advance them to the stage where monetization of the project yields a fair value return to shareholders.
A. There is a significant gap between the recently established NAV of Copper Fox and its current market price. For junior companies like Copper Fox the share price would be expected to be in the order of 0.5 to 0.7 X NAV. Currently Copper Fox is trading at 0.12 to 0.15 of its NAV. Copper Fox’s NAV is based on the 2020 and 2021 Preliminary Economic Assessments for the Van Dyke and Schaft Creek projects, both of which were prepared by independent engineering companies. Several market factors can contribute to the gap between the market price and NAV, 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. The metal prices and foreign exchange rates (‘FOREX’) used in financial analysis of an advanced stage project are based on long-term industry consensus forecasts as at the effective date of the Technical Reports. 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 long-term FOREX in the 2021 PEA was $US1.00:$C0.77; a significant positive difference in Canadian dollar terms. In 2013, the base case analysis used a copper price of $US3.25/lb or $C3.35/lb, as at the effective date of the 2021 PEA 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. The Company’s efforts to advance its portfolio of advanced and exploration stage projects has resulted in establishing significant value in both the Schaft Creek and Van Dyke projects and project enhancements, if successful, could add value to both projects. The Company continues to advance its exploration stage projects leading to drilling programs which could result in a mineral discovery. The corporate strategy is to advance the Schaft Creek and Van Dyke projects to a stage that demonstrates fair value for the shareholders at which time a monetization decision could be taken.
A. Yes, with the cash on hand and exercise of “in the money” warrants the work programs on Copper Fox’s operated projects would be fully funded. The Schaft Creek Joint Venture calls for Teck Resources Limited (“Teck”) to provide all the funding required to explore and advance the Schaft Creek project.
A. Both areas are recognized as “copper provinces” in North America with significant potential to discover large “world class” polymetallic porphyry copper deposits. Both areas are geopolitically stable pro-mining jurisdictions with excellent infrastructure and have 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 operations on the Schaft Creek project. 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’s strategy is to aquire large, potentially low cost copper deposits in North America. That said, the Schaft Creek and Van Dyke projects have established resources exceeding billions of pounds of copper, more if looked at on a copper equivalent basis. The Schaft Creek and Van Dyke deposits remain open to extension and several large drill ready exploration targets have been identified in proximity to these deposits.
Our three exploration stage projects cover intrusive rock of the right age, have multiple, large exploration targets all displaying the mineral alterations and geophysical signatures associated with porphyry copper systems. The regional setting and size of the porphyry footprints indicate potential to host large copper deposits.
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 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 $US780 million increase (100% basis) in the 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, Schaft Creek is one of the largest development stage projects under consideration and would be of interest to all large copper producers, including Teck.
A. Resource estimation and PEA level studies are completed by independent engineering firms and provide shareholders and the investing public confidence in the stage and valuations related to the projects.
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 $US64 million. While this was considered a positive, the project valuation was substantially below that required for a sanction decision but sufficient to warrant further investment to investigate project optimization. The 2021 PEA was based on the results of the work programs completed by Teck, as Operator of the Schaft Creek Joint Venture, and yielded a $US842 million after tax discounted value of the project. The PEA also provided Copper Fox an opportunity to provide its shareholders and investing public updated technical and financial information for 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, Schaft Creek is one of the largest development stage projects that would be of considerable interest to all large copper producers, including Teck.
Since the acquisition of the Van Dyke project our work programs have continually advanced the geological understanding of the deposit and increased the total contained copper, resulting in a higher confidence in the resource model. Increases in soluble copper content within the deposit, higher metallurgical recoveries, and the updated geological model strongly indicates the potential to increase the project valuation, providing the Company the confidence in the business opportunity. For example, the 2015 PEA at $US3.00/lb copper, yielded an after tax discounted valuation of $US149 million whereas the 2020 PEA at $US3.15/lb copper yeilded an after tax value of $US645 million.