On July 15, 2013 Copper Fox Metals Inc. (the 'Company' or 'Copper Fox') formed a joint venture with Teck Resources Limited ('Teck') to further explore and develop the Schaft Creek project located in northwestern British Columbia, Canada.
Terms of the Agreement
- The agreement replaces and supersedes the 2002 option and joint venture agreement between Teck and Copper Fox in connection with Schaft Creek.
- Teck will hold a 75% interest and Copper Fox will hold 25% in the Schaft Creek Joint Venture.
- Teck will be the operator of the Schaft Creek Joint Venture.
- Teck will pay a total of $60 million in three direct cash payments to Copper Fox: $20 million upon signing the Schaft Creek Joint Venture Agreement, $20 million upon a Production Decision, and $20 million upon the completion of the mine facility.
- Teck will fund 100% of costs incurred prior to a production decision up to $60 million; Copper Fox's pro rata share of any pre-production costs in excess of $60 million will be funded by Teck and the direct cash payments payable to Copper Fox will be reduced by an equivalent amount, and Teck will fund any additional costs incurred prior to a production decision, if required, by way of loan to Copper Fox to the extent of its pro rata share, without dilution to Copper Fox's 25% joint venture interest.
- On signing Teck reimbursed $3.93 million for Schaft Creek mineral tenure acquisition costs and costs related to the Stewart Bulk Terminal land reservation agreement incurred by Copper Fox.
- Management of the Joint Venture will be made up of two representatives from Teck and Copper Fox with voting proportional to equity interests.
- Teck has agreed to use all reasonable commercial efforts to arrange project equity and debt financing for project capital costs of constructing a mining operation upon a production decision being made; Teck has agreed to fund Copper Fox's pro rata share of project capital costs by way of loan, if requested by Copper Fox, without dilution to Copper Fox's 25% joint venture interest.
Teck and Copper Fox's Interest in the Liard Shares
The shares representing the 78% interest in Liard Copper Mines Limited ('Liard') that are included in the Schaft Creek Joint Venture will be held in the name of Teck for the benefit of Copper Fox (25%) and Teck (75%). Liard holds a 30% net profits interest in the Schaft Creek property.
Joint Venture Agreement on SEDAR
The full terms of the Schaft Creek Joint Venture are set out in the definitive Joint Venture Agreement between Copper Fox and Teck dated July 15, 2013. A copy of the Agreement is available under Copper Fox's profile on Sedar at www.sedar.com