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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 varying working interests in four copper-gold projects with significant by-product metal credits, one in British Columbia and three in Arizona.

Our focus is accumulating "in the ground resources" of copper as well as significant amounts of gold, molybdenum and silver metal through either the acquisition and exploration of under-explored copper projects or purchasing equity interests in companies with advanced exploration projects. Copper Fox has been successful in accumulating ownership to a significant amount of copper-gold-molybdenum-silver metal while at the same time advancing the Schaft Creek and Van Dyke projects.

Since 2013, Teck Resources Limited as operator of the Schaft Creek Joint Venture has completed reviews of a number of the major components of the 2013 Schaft Creek Feasibility Study. In 2017 the Schaft Creek Joint Venture approved a program to complete a re-model of the resources in the Schaft Creek deposit. The 2017 re-modeling work is the culmination of four years of work on the Schaft Creek deposit since the formation of the Schaft Creek Joint Venture. The re-model of the Schaft Creek resource provides 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.

The Preliminary Economic Assessment ("PEA") on the Van Dyke copper project completed in late 2015, indicated a Net Present Value ("NPV") using an 8% discount rate on a pre tax basis of $US214 million and an Internal Rate of Return ("IRR") of 35.5% and an after tax NPV of $US149.5 million and 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 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 parameters of the project including parameters related to the economic enhancements identified in the PEA (copper recovery, operating and capital costs). 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 eight 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 assets of Carmax including the Eaglehead copper deposit located in northern British Columbia. The objectives of the 2016 program on the Eaglehead project were to eliminate all "legacy data issues" related to the project's database and to demonstrate that the areas between the Pass-Bornite-East zones are mineralized.

Sombrero Butte is a Laramide age copper project located approximately 2 miles south of the Copper Creek porphyry copper deposit which is hosted in the Copper Creek Granodiorite. The Copper Creek Granodiorite is exposed on the Sombrero Butte property and hosts numerous mineralized hydrothermal breccia pipes at the north end of the 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.

Two drill ready exploration targets have been delineated on the property. The first target hosts a 4,000m long chargeability/resistivity anomaly as well as a number of mineralized and clay altered breccia pipes. The second target hosts a number of mineralized breccia pipes and a deep-seated chargeability/resistivity anomaly that exhibits a strong correlation between the chargeability anomaly and the mineralized breccia pipes.

The Mineral Mountain project covers a Laramide age porphyry copper environment located within the northeast trending Jemez structural zone. This zone also hosts four other large copper deposits 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.

Copper Fox over the past two years has delineated a mineralized area that measures approximately 1,100m by 900m 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 sampled area contained between 1% and up to 6.6% copper due to the presence of chalcocite and covellite. The sample results suggest that the mineralized area is open in two directions.

The work also outlined a 2.5km by 1.1km northeast trending zone of porphyry style copper-molybdenum-gold mineralization hosted within a 3.0km by 2.0km area of potassic and sericitic altered Laramide age Quartz Monzonite and Granodiorite. The structural setting, mineralization and associated alteration pattern is consistent with a porphyry copper system. A chargeability anomaly identified in the early 1980's (a common geophysical signature of porphyry copper mineralization) exhibits a good correlation with the potassic alteration. This anomaly has not been verified using modern geophysical exploration methods.

Signs are starting to appear suggesting the five-year decline in commodity prices that started in 2011 may be coming to an end.

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