Introduction
In 2013, Desert Fox Van Dyke Co., a wholly owned subsidiary of Copper Fox Metals Inc., purchased a 100% working interest in the Van Dyke copper project located in the prolific Globe-Miami porphyry copper mining district. The Project covers 531.5 hectares (1,312.8 acres) of mineral rights. Historical copper production from underground mining between 1929 and 1945 produced 11.8 million (M) pounds (lb) at a reported average grade of 5.0% copper. Between 1988-1989, 4Mlb of copper was recovered utilizing in-situ copper recovery (ISCR) methods. Arizona is a Tier 1 mining jurisdiction.
Van Dyke’s geology is well suited for ISCR, with fractured, permeable host rock at moderate depth and copper mineralization amenable to leaching. The project offers scalable, ESG-aligned copper exposure and significant upside at spot copper prices.
ISCR Method
ISCR is the preferred extraction method for the Van Dyke project, offering a low environmental impact alternative to open-pit or underground mining. The ISCR process involves injection of a low pH solution into an oxidized copper deposit via a series of injection wells. The injected fluid dissolves the soluble copper minerals and the copper laden solution referred to as the PLS is returned to surface using a series of recovery wells placed around the injection well. At surface the PLS is processed through an SX/EW plant to produce Grade A copper metal at site.
The ISCR method involves leaching, not mining and eliminates the need for blasting, haulage, crushing, grinding, waste piles and tailings storage facilities typically associated with open-pit mining operations. Copper produced using the ISCR method results in significanlty lower water and energy consumption and lower GHGs when compared to conventional open-pit mining operations.
Historical trials in the 1970s confirmed hydraulic connectivity and recent 2023 solubility tests returned up to 81% (over a 72-hour time period, reflecting rapid dissolution) copper recovery in oxide zones, supporting the technical case for ISCR at Van Dyke.
2020 PEA
In January 2021, Copper Fox filed an independent Preliminary Economic Assessment (PEA) prepared in accordance with National Instrument 43-101 on the Van Dyke ISCR project (click for report). The PEA was prepared under the direction of Moose Mountain Technical Services with an effective date of December 30, 2020. The effective date of the mineral resource used in the PEA is January 9, 2020. Metal Price Assumptions: Cu US$3.15/lb.
Highlights
- Pre-tax Net Present Value (NPV) 7.5% of US$798.6 M, Internal Rate of Return (IRR) of 48.4% and payback period of 2.0 years
- After-tax NPV 7.5% of US$644.7 M, IRR of 43.4% and payback period of 2.1 years
- EBITDA of US$1.8 billion (B) Life of Mine (LOM)
- Free Cash Flow of US$1.4B LOM
- 17-year mine life producing approximately 1.1Blb of copper
- Initial Capital Cost of US$290.5M including 30% contingency
- Operating Costs of US$0.71/lb
- Sustaining Costs of US$0.07/lb
- C1 Cash Costs of US$0.98/lb
- All in Sustaining Costs of US$1.14/lb
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.
2020 Mineral Resource Estimate
In May 2020, Copper Fox filed an NI 43-101 Technical Report which included the results of an updated mineral resource estimate for the Van Dyke ISCR project (click for report). The study established for the first time an Indicated mineral resource, an increase in overall tonnage and a substantial increase in copper metal. Modelling indicated that the Van Dyke deposit has significant potential for resource expansion, the deposit is open to the southwest where an approximate 1.5km long exploration target has been identified.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Van Dyke Deposit
The Van Dyke oxide copper deposit formed as a result of several weather/oxidization/supergene enrichment cylces of a Laramide age porphyry copper deposit. The ‘leach cap’ overlying the deposit is characterized by variable concentrations of clay, hematite, limonite, jarosite, and geothite, and typically contains less than 100 parts per million (ppm) copper. The deposit consists of an upper Oxide zone (primarily chrysocolla, malachite, azurite and native copper and cuprite) underlain by a Transition zone (primarily chalcocite with lesser malachite and chrysocolla) underlain by the primary Sulphide zone (primarily chalcopyrite with lesser concentrations of chalcocite and bornite). The mineralization is hosted in the PreCambrian Pinal Schist and in late-stage porphyritic dikes related to the Schultz granite. The simple geology and the copper mineralogy are considered positive aspects for extraction of copper utilizing ISCR methodology.
2025 Program
Copper Fox’s objective in 2025 is to assemble a Project Team of mining professionals in Arizona with expertise in ISCR mining projects to develop an execution plan setting out the scope, timing, studies and estimated cost to complete a prefeasibility level technical report. The hydrogeological monitoring and quarterly water sampling commenced in 2024 and will continue in 2025. The Conseptual Hydrogeological Model (CHM) has progressed to the stage whereby all historical and publicly available data has been incorporated. Additional data is required to update the Conseptual Site Model (CSM) for the project.
2024 Program
The 2024 activities included completion of a technical review and analysis of existing hydrogeological data, initiating the preparation of a CSM and establishing hydrogeological and ground water data collection procedures in compliance with State and Federal requirements.
Understanding the chemical and mineralogical changes that occur from the initial injection of the leaching solution until recovery of the copper bearing solution is a fundamental aspect of ISCR projects.
Mineral solubility/mineralogical testwork was completed in the area designated as Phase I (years 1-7) in the 2020 PEA and yielded the following positive results:
- a high degree of oxidization and a rapid rate of dissolution of the copper species throughout the proposed Phase I mine plan,
- the low carbonate content in the Oxide and Transitional mineralogical zones significantly mitigate the potential to generate carbon dioxide gas and the precipitation of gypsum during the leaching process, and
- the host rock and gangue mineralogy of the mineralized veins are low acid consuming minerals as well as the ferric iron content of the vein and host rocks.
The development of the Van Dyke copper project contemplates access by way of a decline to a depth of approximately 50m above the Gila Conglomerate/Pinal Schist contact and developing underground galleries and drilling stations in the Gila Conglomerate overlying the Van Dyke deposit from which to install the infrastructure to carry out leaching operations.
The 2024 Geotechnical Study identified a more environmentally friendly, faster, safer method to construct access to the deposit that is expected to maintain the geomechanical strength of the Gila Conglomerate, eliminate the gases produced from conventional drill and blast techniques and yield a higher rate of advance per shift. If these conclusions are reached this implies a lower capital cost for the decline, reduced development timeline and a safer working environment.
Regulatory and Community Outreach
Copper Fox’s community outreach program encompasses a 40-mile radius around Miami, Arizona. The purpose of the program is to inform stakeholders of Copper Fox’s activities and plans for the Van Dyke project. The Arizona Department of Environmental Quality (ADEQ) and the Environmental Protection Agency (EPA), the primary regulatory bodies are included in the stakeholder list.
Other studies completed on the Van Dyke project prior to 2024 include an archeological assessment, a biological evaluation and effects analysis of the impact of project development on wildlife in the Miami-Globe area.