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CEO Message

Copper Fox is a Canadian based resource company focussed on the exploration and development of potentially low cost, large copper-gold projects in Canada and the United States. Copper Fox is committed to responsible mining, mineral resource development and environmental stewardship.

Our conservative approach utilizes strict guidelines based on a broad range of domestic and international factors affecting the copper industry to guide our corporate strategy. Copper Fox has a balanced project portfolio consisting of either working or equity interests in five copper-gold projects with significant by-product metal credits, two in British Columbia and three in Arizona. In 2016, Copper Fox's exposure to exploration expenditures is estimated to be approximately $2.2million.

Our focus is accumulating "in the ground resources" of copper as well as significant amounts of gold, molybdenum and silver metal through the acquisition and exploration of under explored copper projects. Copper Fox has been successful in accumulating ownership to a significant amount of copper-gold-molybdenum-silver metal while at the same time increasing its Net Asset Value by advancing the Schaft Creek and Van Dyke projects.

The Net Asset Value (NAV) of the Schaft Creek project was established in 2013 with the completion of the Schaft Creek Feasibility Study. Completion of the Preliminary Economic Assessment ("PEA") on the Van Dyke copper project in late 2015 has significantly increased the Net Asset Value of the corporation.

In 2015, Teck Resources Limited as operator, completed the review of a number of the major components of the 2013 Schaft Creek Feasibility Study. The results of the reviews were similar to that set out in the 2013 Feasibility Study. Over the past three years Teck has tested a number of the blocks of Inferred Resources contained within the pit shell outlined in the 2013 Feasibility Study and re-logged a considerable number of the historical drill holes within the Schaft Creek deposit. In 2016, the Schaft Creek Joint Venture plans to complete a re-model of the resources outlined in the Schaft Creek deposit as part of the 2016 budget set at approximately $0.7 million. The re-model of the Schaft Creek resource is a significant project parameter required to assess the economic viability of the Schaft Creek project.

The PEA on the Van Dyke copper project completed in late 2015, indicated a Net Present Value ("NPV") after tax of $US149.5 million and Internal Rate of Return ('IRR") of 27.9%. The PEA recommended completion of a pre-feasibility study and indicated that the project economics are most sensitive to copper recoveries and metal prices. The purpose of the pre-feasibility study is to investigate among other things; the economic enhancements identified in the PEA (copper recovery, operating and capital costs) that could improve overall project economics. In early 2016 Copper Fox reviewed the estimated timing and costs of the permitting process and the metallurgical portions of pre-feasibility study recommended in the PEA. The review completed by consultants based in Arizona found that the estimated cost of these two activities would be approximately $US800,000 less than that estimated in the PEA.

The pre-feasibility study for the Van Dyke project includes a five well in-situ pilot leach test to verify many of the geotechnical and operating aspects of the project as well as a 10,000 meter ("m") drilling program to upgrade and expand the project resource base. Currently Copper Fox is seeking partner participation to progress this project to the pre-feasibility stage.

Copper Fox increased its share ownership in Carmax Mining Corp. to 65.4% in early 2016 thereby increasing its exposure to the Eaglehead copper deposit located in northern British Columbia. The objectives of the 2016 program are to eliminate all "legacy data issues" related to the project. The focus in 2016 is the Pass-Bornite-East zones and demonstrating that the areas between these zones are mineralized.

Sombrero Butte is a Laramide age copper project located approximately 2 miles south of the Copper Creek porphyry copper deposit. The Copper Creek deposit is hosted in the Copper Creek Granodiorite. The Copper Creek Granodiorite hosts numerous mineralized hydrothermal breccia pipes at the north end of the Sombrero Butte property. These breccia pipes contain three distinct styles of mineralization being; copper-gold-molybdenum-silver, copper-silver and copper suggesting either multiple sources of metal bearing fluids or an evolved porphyry copper system underlying the Sombrero Butte project.

The is a drill ready project to test an exploration target consisting of a 4,000m long chargeability anomaly, porphyry style alteration and vein style mineralization hosted in the Copper Creek Granodiorite.

Copper Fox's primary interest in the Mineral Mountain project is a Laramide age porphyry copper deposit. The project is located within the northeast trending Jemez structural zone that also hosts four large copper deposit in this part of Arizona. Historical exploration completed from the late 1960's to the early 1980's has identified both copper and precious metal targets within the project.

The historical work outlined a large zone of copper with several areas of molybdenite mineralization located within a much larger (6,000ft by 2,500ft) chargeability/resistivity anomaly hosted in the Laramide age Quartz Monzonite. The alteration, structural location, the Laramide host rocks and widespread presence of copper-molybdenum mineralization strongly support our exploration model of an interpreted buried porphyry system.

Signs are starting to appear suggesting the five year decline in commodity prices that started in 2011 may be coming to an end. The decline in commodity prices has resulted in substantially operating cash flows which has in turn significantly reduced share values and delayed capital investment in new projects. The production cuts announced in 2015, decline in head grades, production shortfalls as well as the near term forecast on copper surplus/deficit are expected to have a positive impact on the copper price over the next one to two years.

Going forward; I am optimistic that metal prices will increase due to a combination of factors. Our number one priority in 2016 is to stay focussed and to continue building value by adding metal to Copper Fox's balance sheet. If successful, this work combined with a return to a positive commodity cycle is expected to increase our asset valuation leading to a more robust company valuation and shareholder returns.

Elmer B. Stewart, P.Geo., M.Sc.
President and Chief Executive Officer  

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