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CEO Message

Copper Fox's strategy includes the acquisition, exploration and development of potentially low cost, large copper-gold projects in Canada and the United States to accumulate significant "in the ground" resources of copper as well as gold, molybdenum and silver. Utilizing this strategy, Copper Fox has grown its ownership of "in the ground" metal significantly over the past six years. Our approach is conservative and is guided by technical and economic factors that affect the copper industry while at the same time maintaining our commitment to responsible mining and environmental stewardship.

Copper Fox's balanced portfolio of projects increases the probability of success. Our assets include varying working interests in four copper-gold projects, one in British Columbia, three in Arizona and a controlling equity interest (45%) in Carmax Mining Corp.

Our primary and most advanced asset is the 25% carried Joint Venture interest in the Schaft Creek project which hosts one of the largest undeveloped polymetallic porphyry copper deposits in North America. Since 2013, Teck Resources Limited as operator of the Schaft Creek Joint Venture has reviewed a number of the major components of the 2013 Schaft Creek Feasibility Study leading to a re-model of the resource in the Schaft Creek deposit. The re-model will provide the Schaft Creek Joint Venture the opportunity to update the input parameters required to assess the economic viability of the Schaft Creek project.

Since the date of the 2013 Schaft Creek Feasibility Study, a significant number of the input parameters of the 2013 Schaft Creek Feasibility Study have changed significantly. Some of these changes could have a significant effect on the results and conclusions of the 2013 Schaft Creek Feasibility Study. The Reader is cautioned that the results of the 2013 Schaft Creek Feasibility Study may not be achieved.

Copper Fox's next most advanced asset is Van Dyke, an in-situ leach oxide copper project in Arizona. A Preliminary Economic Assessment completed in late 2015, indicated a robust after tax NPV and IRR and concluded the project economics are most sensitive to copper recoveries and metal price. Completion of a pre-feasibility study was recommended.

The results of the PEA are preliminary in nature as they include an inferred mineral resource which is considered too speculative geologically to have the economic considerations applied that would enable them to be categorized as mineral reserves. There is no certanty that the PEA forecasts will be realized or that any of the resouces will ever be upgraded to reserves. Mineral resources that are not mineral reserves to not have demonstrated economic viability.

The purpose of the pre-feasibility study is to further investigate a number of technical and operating parameters of the project and includes an eight well in-situ pilot leach test and a 10,000 meter ("m") drilling program to upgrade and expand the project resource base. Currently, Copper Fox is working toward obtaining Class III UIC and APP permits for the project. Our strategy is to obtain partner participation to fund the estimated US$16.6 million pre-feasibility study.

Copper Fox has a 100% working interest in the Sombrero Butte and Mineral Mountain Laramide age project copper projects in Arizona. These are early stage exploration projects located either in proximity to known deposits or on a structural trend that hosts other large porphyry copper deposits.

At Sombrero Butte, two drill ready targets that exhibit chargeability/resistivity anomalies and mineralized and clay altered breccia pipes in potassic altered Laramide intrusive rocks have been delineated.

At Mineral Mountain the exploration target is a 1,100m by 900m area of porphyry style copper-molybdenum-gold mineralization hosted in a potassic altered Laramide age Quartz Monzonite and Granodiorite. A significant number of samples from within the area contained between 1% and up to 6.6% copper due to the presence of chalcocite. The mineralized area occurs within a large (2.5km by 1.1.km) zone of widespread porphyry style mineralization hosted within a 3.0km by 2.0km area of potassic and phyllic altered Laramide age intrusive rocks.

Copper Fox's investment in Carmax Mining Corp. provides exposure to early stage copper and gold exploration. Carmax holds a 100% interest in the Eaglehead porphyry copper project in northern British Columbia and a 50% interest in the Whiskeyjack Creek gold project in Ontario. Eaglehead is an early to intermediate stage exploration project and hosts a calc-alkalic porphyry copper-molybdenum-gold-silver system of significance. An exploration program estimated to cost $4.95 million has been recommended to more fully evaluate the potential of the project.

The recent increase in the price of copper and forecast supply deficit indicates that the five-year decline in commodity prices that started in 2011 is coming to an end. Copper Fox is well placed to take advantage of the new commodity/investment cycle.

Going forward; I am optimistic that metal prices will continue to increase due to a combination of factors. Our number one priority in 2017 is to stay focused 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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