Introduction
The Schaft Creek Project is managed through the Schaft Creek Joint Venture (SCJV) between Teck Resources Limited (Teck) (75%) and Copper Fox (25%) with Teck as Operator. The SCJV was formed on July 15, 2013 to manage the exploration and development of the Schaft Creek Project which hosts the Schaft Creek polymetallic copper deposit, one of the largest undeveloped porphyry copper-gold-molybdenum-silver deposits in North America. The project covers 60,268 hectares of mineral concessions located in Tahltan Territory in northwestern British Columbia, approximately 60 kilometers (km) south of Telegraph Creek, near existing seaport, transportation and clean hydroelectric energy infrastructure.
Copper Fox owns 25% of the project with no cash or capital obligations until production as Teck funds all development and recoups costs from 90% of future free cash flow. This structure gives Copper Fox significant leverage to rising copper prices without dilution.
Based on the 2021 Preliminary Economic Assessment (PEA), Schaft Creek has a 21-year mine life producing 5.0Blb Cu, 3.7Moz Au, 226Mlb Mo, and 16.4Moz Ag. The base case delivers an after-tax NPV 8% of $842M at US$3.25/lb Cu price, IRR of 12.9% and C1 cash costs of $1.00/lb Cu. The project is highly sensitive to copper prices with every $0.25/lb increase adding approximately $240M to after-tax NPV. Additionally the 2021 PEA only utilized approximately 60% of the mineral resource leaving opportunity for the remaining to be included in a prefeasibility study (PFS) by way of upgrading the Inferred resource to the Indicated resource category.
Schaft Creek advanced meaningfully in 2024 with a focused program targeting key technical and permitting milestones. A six-hole, 2,472 meter (m) drill campaign supported geotechnical assessments, and informed ongoing infrastructure planning. Environmental baseline studies remain ongoing in collaboration with the Tahltan Nation, reinforcing the project’s alignment with Indigenous and regulatory expectations.
Building on two consecutive years of fieldwork and technical derisking, Teck has approved a C$15.8M budget for 2025 to advance the project toward PFS readiness. Planned work includes additional geotechnical drilling, updated metallurgical testwork, infrastructure planning and continued environmental and Tahltan engagement.
Cumulative expenditures by Teck from July 15, 2013 to December 31, 2024 on the project is approximately C$98M (C$24M cash payment to Copper Fox on execution of the SCJV agreement and C$74M in Pre-Production Costs).
2021 PEA
In November 2021, Copper Fox filed an independent Preliminary Economic Assessment (PEA) prepared in accordance with National Instrument 43-101 on Schaft Creek (click for report). The PEA was prepared under the direction of Tetra Tech Canada Inc. with an effective date of September 10, 2021. The effective date of the mineral resource estimate used in the PEA is January 15, 2021. Metal Price Assumptions: US$3.25/lb Cu, US$1,500/oz Au, US$10/lb Mo, and US$20/oz Ag. The results of the PEA are presented on a 100% project basis and in US$ unless stated otherwise.
The updated PEA outlined a streamlined and technically optimized development scenario compared to the 2012 Feasibility Study. The PEA envisions a 133Ktpd open-pit operation with a 21-year mine life, leveraging a large copper-molybdenum-gold-silver resource and improved mine sequencing to enhance capital efficiency and reduce environmental impact.
Highlights
- Pre-tax Net Present Value (NPV) 8% of US$1.4 billion (B) Internal Rate of Return (IRR) of 15.2% and payback period of 4.4 years
- After-tax NPV 8% of US$842.1 million (M) and IRR of 12.9% and payback period of 4.8 years
- EBITDA of US$10.8B Life of Mine (LOM)
- Free Cash Flow of US$9.96B LOM
- Net Smelter Return (NSR) of US$20.63 per tonne (‘t’)
- 21-year mine life producing approximately 5.0B pounds (lb) or 2.3Mt copper, 3.7M ounces (oz) gold, 226.0Mlbs molybdenum and 16.4Moz silver in concentrate
- 133,000 tonne per day LOM nominal milling rate at 92% capacity processing 1.03Bt of mill feed, representing approximately 60% of identified mineral resources
- Initial Capital Cost of US$2.65B, not including Sustaining Capital Costs of US$848.7M which is inclusive of US$154.0M Closure Costs
- Operating Costs are US$8.66/t processed
- C1 Cash Costs (net of by-product credits) are US$1.00/lb payable copper
- All in Sustaining Costs are US$1.18/lb payable copper
The results of the PEA are preliminary in nature. The PEA includes a combination of indicated and inferred mineral resources which are considered too speculative geologically to have the economic considerations applied that would enable them to be categorized as mineral reserves. There is no certainty that the PEA forecasts will be realized or that any of the resources will ever be upgraded to reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
2021 Mineral Resource Estimate
In May 2021, Copper Fox filed an NI 43-101 Technical Report which included the results of an updated mineral resource for the Schaft Creek copper-molybdenum-gold silver porphyry project (click for report). To date the limits of the Schaft Creek deposit have not been defined and the area surrounding the deposit is considered to have excellent potential to contain porphyry style copper mineralization (i.e., the Discovery zone, DDH 2012CF427 returned 0.24% Cu, 0.14 g/t Au and 0.006% Mo over a core interval of 336.7 metres (m)). The Discovery zone is located approximately 2km to the north of the Schaft Creek deposit and several other exploration targets in the vicinity have not been drill tested.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
2025 Program
The 2025 technical program includes compilation and assessment of the metallurgical, geotechnical, environmental baseline, archeological and climate data collected between 2021 and 2024, a review of current technical models and updating as required, completion of the geometallurgical program including interpretation and modeling of data, updating the geotechnical slope stability and hyrdrogeological models, trade off studies on potential infrastructure sites and a project review to determine if the project is ready to transition to the PFS stage.
The geometallurgical program is nearing completion with the results expected in the second quarter of 2025. The testwork is expected to characterize the metallurgical response of the mineralization within the Schaft Creek deposit to inform potential changes to the proposed milling circuit that could impact capital expenditures and throughput set out in the 2021 Schaft Creek PEA.
The 2025 field program is scheduled to start in mid June and includes continuing environmental baseline data collection, archaeological investigations in key site infrastructure locations and a drilling program to assess suitability of the planned waste storage and tailings storage facilities. Collaboration with the Tahltan Nation on cultural and social traditions initiatives as well as community support programs, continued community and active engagement with the Tahltan Lands Department and Archaeology Team are a significant portion of the 2025 program.
2024 Program
The 2024 program incurred expenditures of C$24.6M and focussed on geotechnical, metallurgical, environmental and archeological studies. Six geotechnical drillholes were completed at various locations across the proposed pit, filling in gaps identified in the 2023 Geotechnical Study. Three of the six drillholes intersected significant intervals of porphyry style mineralization that resulted in extending the mineralized envelope in the Paramount zone approximately 250m to the north. Analytical results are summarized below:
- DDH SCK-24-471 intersected a core interval of 134.6m (21.6 to 156.2m) that averaged 0.338% Cu, 0.037% Mo, 0.058g/t Au and 0.78g/t Ag that included a 63.8m core interval (59.2 to 123.0) that averaged 0.437% Cu, 0.066% Mo, 0.050g/t Au and 1.11g/t Ag.
- DDH SCK-24-472 intersected a core interval of 208.6m (406.1 to 614.7m) that averaged 0.253% Cu, 0.014% Mo, 0.115g/t Au and 0.88g/t Ag.
- DDH SCK-24-476 intersected a core interval of 202.6m (189.7 to 392.3m) that averaged 0.324% Cu, 0.023% Mo, 0.044g/t Au and 1.68g/t Ag that included a 14.4m core interval (196.8 to 211.2m) that averaged 0.634% Cu, 0.104% Mo, 0.092g/t Au and 3.48g/t Ag.
Schaft Creek Joint Venture
In July 2013, Copper Fox and Teck created the SCJV to further explore and develop the Schaft Creek project. The SCJV holds two main assets: i) the Schaft Creek copper-molybdenum-gold-silver project and ii) an 85.41% equity interest in Liard Copper Mines (Liard). Liard holds a 30% Net Proceeds Interest in the Schaft Creek project subject to certain terms and conditions.
Under the SCJV agreement, Teck is required to make three cash milestone payments to Copper Fox: i) C$20M upon entering into the agreement (received), ii) C$20M upon a production decision approving mine construction, and iii) C$20M upon completion of construction of mine facilities.
The SCJV agreement provides that Teck and Copper Fox are each responsible for their pro-rata share of project costs except that Teck is solely responsible for the first $60M in Pre-Production Costs. In July 2024 the first $60M in Pre-Production Costs threshold was met. Going forward the Pre-Production Costs will be shared pro rata with Teck and Copper Fox with Copper Fox’s share of such costs being set off against the two remaining cash milestone payments. If Pre-Production Costs exhaust the two cash milestone payments, Teck will further assist Copper Fox by providing loans, as necessary, without dilution to Copper Fox’s 25% joint venture interest.
By way of example, Pre-Production Costs on the Schaft Creek project would have to exceed a cumulative total of $220M in order to exhaust the two cash milestone payments after which Teck would be obligated to fund Copper Fox’s pro-rata share of Pre-Productions Costs by way of a loan to Copper Fox (at Prime plus 2%).
The definitive Joint Venture Agreement between Copper Fox and Teck dated July 15, 2013, is posted on our website here.