Projects

Overview

Introduction
Van Dyke is an advanced stage in-situ copper recovery (ISCR) project located within the Miami-Inspiration trend of porphyry deposits in the Globe-Miami Mining District in Arizona.  The 2020 Preliminary Economic Assessment (PEA) reported a Post-Tax NPV of US$645 million and an IRR of 43.4% (click for report).  Historical copper production from underground mining between 1929 and 1945 produced 11.8 Mlbs of 5.0% copper.  Between 1988-1989, while utilizing an ISCR method, Van Dyke produced 4 Mlbs of copper.

Property Description
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 project, subject to a 2.5% gross royalty on revenue.  The project covers 531.5 hectares (1,312.8 acres) of mineral rights and 5.75 hectares (14.02 acres) of surface rights.  Arizona is a favorable mining jurisdiction with respect to taxation, regulation, infrastructure and labour.

2020 PEA
In January 2021, Copper Fox filed an independent Preliminary Economic Assessment (“PEA”) prepared in accorance with National Instrument 43-101 (“NI 43-101”) for its 100% owned Van Dyke ISCR project located in Miami, Arizona.  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.

Highlights (Based on $US3.15/lb copper)

  • Base case pre-tax Net Present Value 7.5% (NPV) of $US798.6 million (M), Internal Rate of Return (IRR) of 48.4% and payback period of 2.0 years
  • Base case post-tax NPV 7.5% of $US644.7M, and IRR of 43.4% and payback period of 2.1 years
  • Life of Mine (LOM) copper production of 1.1 billion (B) lbs with peak production of 85 Mlbs annually in years 2-12 inclusive, declining thereafter
  • Initial capital expenditure of $US290.5 M including 30% contingency
  • LOM direct operating cost of $US0.71/lb and sustaining costs of $US0.07/lb
  • Cumulative net free cash flow of $US1.8 B pre-tax and $US1.4 B post-tax
  • Mine life 17 years
  • C1 cost per lb of copper is $US0.98, AISC per lb of copper is $US1.14

Recommendations

  • A diamond drilling program to expand the size of the resource and upgrade the existing indicated and inferred resources to a higher resource classification
  • Proceed to the permitting stage to obtain an Arizona Protection Permit and the Underground Injection Control Permit for Class III Wells
  • Complete an ISCR pilot test program designed to further investigate overall metal recoveries, connectivity between wells, refine well field design and determine the extent of rock stimulation required, if any
  • The total recommended budget is estimated to be $US15.5 M

Resource
Based on the positive results of the 2019 program, Copper Fox commissioned an Updated Mineral Resource estimate for the Van Dyke deposit.  The 2020 Mineral Resource established for the first time an Indicated Mineral Resource category, an increase in overall tonnage and a substantial increase in copper metal.  The Updated Mineral Resource estimate for the Van Dyke project is set out below:

             

Metal (Mlbs)

Class

KTonnes

TCu (%)

ASCu (%)

CNCu (%)

RecCu (%)

Recovery (%)

Soluble Cu

Total Cu

Indicated

  97,637

0.33

0.23

0.04

0.24

90

517

   717

Inferred

168,026

0.27

0.17

0.04

0.19

90

699

1,007

  • Notes:
    KTonnes=thousands of tonnes, TCu=total copper, %=percent, ASCu=acid soluable copper, CNCu=cyanide soluable copper, RecCu=total recovered soluable copper, Mlbs-million of pounds
    1. Sue Bird, P.Eng., an employee of Moose Mountain Technical Services, is the Qualified Person for the Mineral Resource estimate.
    2. The effective date of the estimate is January 9, 2020.
    3. The Indicated and Inferred mineral resources at the Base Case cut-off (0.025% RecCu) include internal dilution or all ‘must take’ material within the confining shape.
    4. The mineral resources are estimated using criteria consistent with the CIM Definition Standards (2014) and the “CIM Estimation of Mineral Resources and Reserves Best Practice Guidelines” (2019).
    5. The “reasonable prospects for eventual economic extraction” shape has been created based on a copper price of $US2,80/lb, employment of in-situ leach extraction methods, processing costs of US$0.60/lb copper, and all in operating and sustaining costs of $US1.25/tonne, a recovery of 90% for total soluable copper and average Specific Gravity of 2.6t/m3.
    6. Approximate drill-hole spacings is 80m for Indicated Mineral Resources.
    7. The average dip of the deposit within the Indicated and Inferred Mineral Resource outlines is 20 degrees.  Vertical thickness of the mineralized envelope ranges from 40m to over 200m.
    8. Rounding as required by Best Practices established by the CIM reporting guidelines may result in slight apparent differences between tonnes, grade and contained metal content.

Mineral Resources that are not Mineral Reserves and do not have demonstrated economic viability.

2022 Program
Meetings with the Arizona Department of Environmental Quality (ADEQ) and the Environmental Protection Agency (EPA) have been completed to assess the timeline and requirements to prepare a formal application to enter a permitting process to obtain a permit for UIC Class III Wells in Arizona.  Copper Fox is currently preparing its 2022 program for the Van Dyke project and will announce the proposed activities and budgets when finalized.

2020 Program
In 2019 and early 2020, an updated geological model for the Van Dyke deposit was completed.  This work identified the geometry, controls on the mineralization and genesis of the Van Dyke deposit.  The deposit is the oxidized portion of a porphyry copper deposit that has been subjected to several weathering/oxidization/enrichment cycles.  The mineralization is hosted in altered and weathered Precambrian age Pinal Schist and Laramide age dikes related to the Schultz granodiorite.  A ‘leach cap’ overlies the mineralogical zones within the deposit which are, in descending order; Oxide (malachite, chrysocolla, azurite), Supergene (chalcocite) and Hypogene (chalcopyrite-molybdenite).  The Van Dyke fault constrains the mineralization to the north.  The mineralization remains open to the south and southwest consistent with the 2014 and 2015 interpretations.

2019 Program
The 2019 program included re-logging of selected historical drill holes, a re-analysis of all historical pulp samples and sampling of previously un-sampled core intervals in the historical drill holes.  This information resulted in updating the geological model for the deposit.

Historical Results
From 2013, up to the end of 2015 Copper Fox invested C$11 M on diamond drilling, geotechnical, hydrogeological and environmental studies, water sampling and drill hole geophysical surveys as well as a compilation of the historical project data resulting in completion of a PEA in 2015.  This PEA transitioned the project from exploration to an advanced stage project.  Between 2016 and early 2020 Copper Fox invested an additional C$1 M in exploration activities, engineering studies and completion of two NI43-101 Technical Reports.