Copper Fox holds title and a 100% working interest in the Schaft Creek project consisting of 55,779.55 hectares (137,834 acres). Included in this total are the "Schedule A" mineral tenures originally conveyed to Copper Fox pursuant to the option agreement dated January 1, 2002 between Teck Resources Limited ("Teck") and Copper Fox (the "Teck Option Agreement"), which consist of 8,334.34 hectares (20,594 acres). The "Schedule A" mineral tenures are subject to a 3.5% Net Profits Interest held by Royal Gold, Inc., a 30% carried Net Proceeds Interest held by Liard Copper Mines Limited ("Liard") and, together with the additional mineral tenures obtained by Copper Fox within the "Area of Interest" provided for in the Teck Option Agreement, an earn back option held by Teck. On completion of the Feasibility Study, Copper Fox will earn Teck's 78% interest in Liard. Teck's earn back option to acquire either, 20%, 40% or 75%, of Copper Fox's interest in the Schaft Creek property is triggered upon delivery of a positive Feasibility Study to Teck. Should Teck elect to exercise its option for 75%, Teck is required to fund subsequent property expenditures up to a total of 400% of those incurred by Copper Fox ($80.8 million to June 30, 2012) and arrange for project financing, including the Copper Fox portion.
The remainder of Copper Fox's registered interests in mineral tenures in British Columbia total 47,445.21 hectares (117,240 acres). These interests have been acquired by Copper Fox through mineral tenure acquisitions and mineral tenure purchase agreementssubsequent to Copper Fox entering into the Teck Option Agreement. Certain portions of these registered mineral tenures are subject to inclusion within the Schaft Creek project pursuant to the terms of the "Area of Interest" provisions of the Teck Option Agreement.
Location: The Schaft Creek Project is situated 45 kilometers west of the Stewart-Cassiar Highway and approximately 80 kilometres south of Telegraph Creek in north western British Columbia.
History: The Schaft Creek Project was extensively explored and drilled by several mining companies since its discovery in the late 1950's culminating with the completion of a pre-feasibility study by Teck-Cominco Corp. (now Teck Resources Limited) in the early 1980s. In 2002, Copper Fox Metals Inc. secured the rights to acquire a 100% working interest in the project pursuant to an Option Agreement with Teck Resources Limited ("Teck") and related underlying agreements. Copper Fox has since earned a 100% working interest in the project (subject to the terms and conditions of the Option Agreement and an earn-back Option held by Teck) and has incurred expenditures of approximately $76.6 million to the end of April 2012.
Option Agreement: Pursuant to a 2002 Option Agreement with Teck, Copper Fox has acquired a 100% working interest in the Schaft Creek Project (subject to a 3.5% net profits interest held by Royal Gold, Inc., a 30% carried interest held by Liard Copper and an earn back option held by Teck Resources Limited ("Teck") Under the terms of the 2002 option agreement with Teck, Copper Fox can earn their 78% interest, or 23.4 % of the deposit, by completing a "positive" Feasibility Study. Pursuant to the Option Agreement, Teck may at any time elect to exercise its earn-back rights, on receipt of a Positive Bankable Feasibility Study, a defined term in the Option Agreement, Teck has 120 days in which to elect to either: i) exercise one of its earn-back options, or ii) retain a 1% net smelter return royalty, or iii) receive shares of Copper Fox to a value of $1,000,000. If Teck elects to exercise its earn-back option pursuant to the Option Agreement, then Teck has the right to elect to acquire either a 20%, a 40% or a 75% working interest in the Schaft Creek Project from Copper Fox by solely funding subsequent expenditures equal to either 100%, 300% or 400% of Copper Fox's prior expenditures pursuant to the Option Agreement. In the event Teck elects to earn-back a 75% working interest in the Schaft Creek Project, Teck will also be responsible for arranging Copper Fox's share of project financing and will recover the project financing funds from Copper Fox's share of metal sales until payout is reached.
Corebox 3D Model:
Corebox interactive sections:
Resource Estimate
The effective date of the mineral resource estimate is May 23rd, 2012. Mineral resources were estimated for the Liard (also referred to as the Main) zone and the Paramount (previously referred to as the Paramount-Breccia) zone separately. The mineral resources were estimated using criteria consistent with the CIM Definition Standards (2010) and in conformity with CIM "Estimation of Mineral Resources and Mineral Reserves Best Practice" (2003) guidelines. The estimated mineral resources using a 0.15% Cu Eq. cut-off grade are categorized and tabulated in Table-1. The Base Case numbers presented in the following tables have been rounded to reflect "Best Practice Principals" as established by the CIM.
Table-1: Mineral Resource Estimate -- Schaft Creek Deposit
Robert Morrison - Ph.D., MAusIMM (CP), P.Geo., Effective Date: May 23rd, 2012 Click to enlarge
Cautionary Note to Investors
While the terms "measured (mineral) resource", "indicated (mineral) resource" and "inferred (mineral) resource" are recognized and required by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, investors are cautioned that except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic viability. Investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded into mineral reserves. Additionally, investors are cautioned that inferred mineral resources have a high degree of uncertainty as to their existence, as to whether they can be economically or legally mined, or will ever be upgraded to a higher category.
Copper Fox has an option agreement dated January 1, 2002 to:
Acquire 100% of Teck Cominco's 'Direct Holding', defined as a 70% direct participating interest in the Schaft Creek Property, by:
Incurring $5,000,000 in expenditures on or before December 31, 2006 and aggregate expenditures of $15,000.000 on or before December 31, 2011.
Further acquire Teck Cominco's 'Indirect Holding' (defined as an indirect 23.4% carried interest through its 78% shareholding in Liard Copper Mines Ltd. who hold a 30% carried interest in the property) by incurring the above described $5,000,000 in expenditures and completing and delivering to Teck Cominco a positive bankable feasibility study.
If Copper Fox delivers a feasibility notice to Teck Cominco prior to completing the $15,000,000 in expenditures, Copper Fox will be deemed to have exercised the option as to Teck Cominco's Direct Holding in addition to having acquired the Indirect Holding.
The option agreement has a time-limited back-in right exercisable by Teck Cominco within up to 120 days of the delivery of the positive feasibility study. If the back-in right is not exercised, and at Teck Cominco's option, CFM shall grant Teck Cominco a 1% net smelter royalty or, if CFM has assigned the option agreement to a public company whose shares are listed on a recognized stock exchange, shares of that company having a value of $1,000,000.
If Teck Cominco wishes to exercise its back-in right, it may earn;
a 20% interest by matching prior incurred expenditures, or it may earn;
a 40% interest by matching three times prior incurred expenditures, or it may earn
a 75% interest by incurring four times prior expenditures and arranging all production financing.
History
The Schaft Creek copper-gold-molybdenum-silver prospect was located in 1957 by prospector Nick Bird while employed by the BIK Syndicate. Three diamond drill holes were drilled to moderate depths. Cores from two holes, when sampled, returned sufficient copper values to encourage further work. The prospecting syndicate was re-organized in 1966 into Liard Copper Mines Ltd. (" Liard") with Silver Standard Mines Limited, holding a 66% interest, acting as the manager. In 1966, ASARCO obtained an option to explore the Liard Copper Mines Ltd. ground, carried out geological and induced polarization surveys and drilled 10,939 feet (3,335 metres) in 24 holes. The option was not maintained despite encouraging drill results and in 1968 Hecla, a subsidiary of Hecla Mining Company of Wallace, Idaho, entered an option agreement to earn a 75% property interest and commenced drilling and other exploration work with Hecla operating company as its agent.
Hecla, in the period 1968 through 1977, completed 34,500 metres of diamond drilling, 6,500 metres of percussion drilling, induced polarization and resistivity surveys, geological mapping, air photography, and engineering studies related to the development of a large open pit copper-gold-molybdenum mine. Property work ceased in 1977 and in 1978 Hecla sold its interest to Teck Corporation ("Teck") (now Teck Cominco Limited).
In 1980 Teck commenced a program of exploration and drilling designed to confirm and expand Hecla's work. A total of 26,000 metres of diamond drilling was completed by 1981. Teck then undertook an engineering study to determine the feasibility of mine development. Further data reviews were completed by Western Copper Holdings in 1988 and Teck in 1993. A total of 230 core holes with total length 60,200 metres and percussion holes with total length 6,500 metres were completed prior to Copper Fox acquiring an option on the property in 2002.
Tahltan Nation community relations engagement and consultation
Copper Fox is working with the Tahltan Central Council and the Tahltan people to ensure, honest and transparent communication. Over the past three years, Copper Fox has met with the Tahltan Central Council and conducted several community meetings to discuss the progress on the project and receive feedback from the political leadership and Tahltan community members.
Copper Fox has entered into several agreements with the Tahltan Central Council and the Tahltan Nation Development Corporation including:
A memorandum of Understanding with the Tahltan Nation Development Corporation
Copper Fox has signed Memorandum of Understanding with the Tahltan Nation Development Corporation which defines the scope of work, program commitments, cooperation, and communication that Copper Fox will follow at Schaft Creek and recognizes TNDC will be a "preferred contractor". This agreement includes commitments regarding contracting and sub contracting opportunities for Tahltan businesses and employment and training opportunities for all members of the Tahltan Nation. The Tahltan Nation Development Corporation (TNDC) is the economic arm of the Tahltan Nation and generates wealth, economic, employment and training opportunities for all members of the Tahltan Nation
Communication Agreement with the Tahltan Central Council
Copper Fox has signed a Communications Agreement with the Tahltan Central Council (TCC) with the objective of ensure strong communications between the company and TCC. The agreement outlines financial support the company will provide to the TCC to ensure adequate financial resources are available for funding communications between the TCC and the company.
Heritage Agreement (formerly known as the Traditional Knowledge Agreement)
Copper Fox has signed a Heritage Agreement with the Tahltan Central Council (TCC) with the objective of confirming how traditional knowledge will be collected and protected, as well as how the process will be funded. Copper Fox will fund any collection of traditional knowledge and be responsible for ensuring it keeps confidential such information. In addition, the information is always owned by the Tahltan Nation and all information is to be returned to the Nation following the environmental assessment.
Tahltan Heritage Resources Environmental Assessment Team (THREAT) funding Agreement
Copper Fox has signed a THREAT Agreement with the TCC. This agreement outlines how Copper Fox and THREAT will work through the environmental assessment process. In addition, the agreement also outlines how work will be funded. Copper Fox and the THREAT team have met several times during this pre-applications phase. There are two purposes of the meetings. The first is for Copper Fox and their consultants to provide project updates, engineering and technical reports and assessments of different project design components to THREAT. The second, is for THREAT to provide the company with provide feedback and ensure Tahltan views are incorporated early on into the project.
Public Participation
Copper Fox is committed to working with community members, stakeholders and the Tahltan Nation to develop an economically, environmentally and socially responsible project. The Project is communicated via open houses, public meetings, brochures and factsheets. For more information on the Project please select from the factsheets below.
For more information on the Project or how to become involved please contact:
The Schaft Creek Mine Project (Project) comprises the mining and processing of a multimetal porphyry deposit located in northwestern British Columbia. The Project requires an Environmental Assessment Certificate under the British Columbia Environmental Assessment Act before proceeding with activities related to construction and operation of the Project.
The Project is also be subject to federal review under the Canadian Environmental Assessment Act and thus requires a federal approval before construction can commence.
The Canada/British Columbia Agreement on Environmental Assessment Cooperation provides for cooperative environmental assessments (EA) to minimize duplication whenever possible. Thus a single environmental assessment will be undertaken for the Project.
The Project has been in the environmental assessment process since 2006 and has been collecting baseline environmental, economic, social, heritage and health data to support the environmental assessment since 2005; see below for list of baseline studies in support of the environmental assessment.
Copper Fox will submit the Environmental Assessment Application in the fourth quarter of 2012 and expects to complete the environmental assessment process by the end of 2013. In addition, Copper Fox will submit a permit application to construct the Schaft Creek access road concurrently with the environmental assessment application. This will ensure a timely transition from the environmental process to construction of the mine.
Mine development is a complex long-term process that starts well before a mine is built and continues well beyond when the mine is closed. During the exploration stage, the first step is a public outreach or stakeholder consultation program. A mining or exploration company usually begins this stage when it acquires or discovers a mineral project with economic potential or plans an initial work program to test the potential of a mineral prospect.
In British Columbia, most companies understand that they must begin their consultation programs early so that local communities, First Nations leaders and other stakeholders be involved in the project by understand the scope and objectives of the work programs and the safeguards that will be incorporated into these programs to protect the environment. Early consultation helps companies understand local values and address issues of concern that may be raised by First Nations leaders and other stakeholders. This two-way dialogue also helps the public understand that only a few prospects ever become operating mines, and that all mine proposals must undergo a lengthy and rigorous environmental assessment process open to broad public scrutiny.
The consultation process usually increases as the project advances to the stage where a preliminary economic assessment (or scoping study) is completed. This study is the first time that current economics are tied to the project. Following the preliminary findings of a scoping study, a company will move to the pre-feasibility and feasibility stages, and may at the same time, enter the environmental assessment and permitting process. This stage provides more specific findings about the project's design and economics than the scoping study. Government agencies, environmental groups and non-governmental organizations will also carefully scrutinize any mine project that advances to this advanced stage of environmental assessment and permitting. Mining companies must consult and engage with a broad range of stakeholders in order to develop public understanding and support for their projects over time, and thereby gain a "social license" to operate.
Another important early step in project design is collecting data for environmental baseline studies because it is the cornerstone of environmental planning for any proposed mine. Data collected from these exhaustive and rigorous studies help the company, government agencies and stakeholders understand the state of the environment near the proposed project before it is built, including wildlife, vegetation, air and water quality, fisheries, wetlands, and cultural resources among others. The data also contribute information for the mine-planning process, form the basis of an environmental assessment required by government agencies, and support the permitting process.
The Environmental Assessment Process
In 2002, the British Columbia government introduced a new, streamlined Environmental Assessment (EA) process for all proposed major projects in the province. The Environmental Assessment Act requires all major mine proposals to obtain an Environmental Assessment Certificate before they can proceed. Simply put, the EA process is a way to review major projects, assess their potential impacts, and address a broad range of environmental, economic, social, health, heritage and cultural issues. The goals of this integrated process are to ensure that all issues and concerns raised by all groups are considered, studied, addressed or mitigated, and that the proposed project will be developed in a socially and environmentally responsible manner. An EA must be successfully completed and the proposed project must be approved by two provincial government Ministers before it can proceed.
The federal government also plays an important role in mine development, as more than 70% of major projects undergoing a provincial EA will also require a federal assessment under the Canadian Environmental Assessment Act (CEAA). Similar to the provincial EA, the federal environmental assessment is a planning tool that anticipates adverse environmental impacts so they can be minimized and mitigated. Federal environmental assessments are required if the proposed project has a trigger which can include: an act under federal authority, federal money is involved or federal lands are involved.. As an example, a federal EA is required for projects with potential to impact any fishery under the jurisdiction of the federal Department of Fisheries and Oceans (DFO). The CEAA process is administered by the Canadian Environmental Assessment Agency.
When a project falls under both provincial and federal EA responsibility, the two levels of government will cooperate and may carry out a single harmonized EA while still maintaining their respective decision-making powers.
An EA is also planning tool used to identify the potential effects of a project on the environment, including air, water, land, wildlife and human settlements before it is built. Through good planning, a company can reduce the length, complexity, cost, potential for controversy and corrective action and other risks that may be associated with the environmental assessment and permitting process. A well-planned EA makes it easier for government agencies and other decision-makers to have the information they need to approve projects acceptable projects.
Once a company applies to the province of British Columbia's Environmental Assessment Office (EAO) with a proposal for a project, the EAO determines how the review (if required) should be conducted. The EAO then issues an order for the project review that includes what will be assessed, the consultation requirements and the review process. The Application Information Requirements are usually developed by the company after consultation with First Nations, government agencies and the public. The company then conducts studies and prepares its application based on the pre-determined information requirements of the Application.
Key elements of the EA process include: a detailed description of the project and proposed facilities - such as the size, scope, and type of mine and processing facilities --- and power, road and infrastructure requirements, expected mine life, and other technical details. The EA considers the potential environmental and socio-economic effects of proposed mines and ways to minimize, avoid, or mitigate any potential adverse effects. The review is conducted by the EAO through a process determined by the Minister of Environment, usually a panel or commission. First Nations, government agencies and the public are asked to review and comment on the application, usually during a formal public comment period.
Findings of the review are documented in an Assessment Report prepared by the EAO that is then referred to two Ministers for a decision as to whether the project should be approved and an Environmental Assessment Certificate issued. Once the project is approved, the company receives the necessary permits and authorizations to construct and operate the proposed mine (subject to obtaining any local permits that may also be required). Companies are required to restore the land to productive use after the mine is closed, and in some cases must also implement long-term monitoring programs.
