A. Resource estimation and PEA level studies are completed by independent engineering firms. The PEA’s provided Copper Fox an opportunity to update its shareholders and the investing public on the technical and financial information for the projects based on certain input parameters related to each project and identified potential project enhancements for further investigation to surface additional value in each project.
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 a positive, the project valuation was substantially below that required for a sanction decision but sufficient to warrant further investment to 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, as Operator of the Schaft Creek Joint Venture, and yielded a US$842 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.
Since the acquisition of the Van Dyke project our work programs advanced the geological understanding of the deposit and increased the total soluble copper content of the deposit, 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 indicated the potential to increase the project valuation, providing the Company the confidence in the business opportunity. For example, the 2015 PEA (@ $US3.00/lb copper), yielded an after tax discounted valuation of $US149 million whereas the 2020 PEA (@ $US3.15/lb copper) yielded an after tax value of $US645 million. The conservative copper pricing and potential to expand the soluble copper resource indicates potential to increase mine life and potential NPV of the project.