Copper Fox is a 25% partner in the Schaft Creek Joint Venture with Teck Resources Limited ('Teck'). Teck is the operator of the Schaft Creek Joint Venture which holds two main assets; i) the Schaft Creek copper/gold/molybdenum/silver project located in northwestern British Columbia and a 78% equity interest in Liard Copper Mines Ltd. ('Liard'). Liard holds a 30% Net Proceeds Interest in the Schaft Creek project.
On January 23, 2013, Copper Fox filed a National Instrument 43-101 Technical Report comprising a feasibility study of a 130,000 tonne per day-open pit mine with a Proven and Probable Reserve of 940.8 million tonnes grading 0.27% copper, 0.19 g/t gold, 0.018% molybdenum and 1.72 g/t silver; with contained metal of 5,611.7 million pounds of copper, 5.8 million ounces of gold, 363.5 million pounds of molybdenum and 51.7 million ounces of silver. The Technical Report was prepared by Tetra Tech. The feasibility study contemplated a 21 year mine life.
The Schaft Creek deposit host a Measured and Indicated Resource of 1,228.6 tonnes grading 0.26% copper, 0.017% molybdenum, 0.19 g/t gold and 1.69 g/t silver and a 597.2 million tonne Inferred Resource grading 0.22% copper, 0.016% molybdenum, 0.17 g/t gold and 1.65 g/t silver. The above stated Proven and Probable Reserves for the Schaft Creek project are included within the stated Measured and Indicated Resources for this project.
After delivery of the Technical Report and pursuant to the 2002 Option Agreement between Copper Fox and Teck, on July 15, 2013 Copper Fox formed a joint venture with Teck to further explore and/or develop the Schaft Creek project located in northwestern British Columbia, Canada. Terms of the Joint Venture Agreement are:
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 two remaining direct cash payments payable to Copper Fox will be reduced by an amount equal to 25% of the expenditure in excess of the initial $60 million.
Teck will fund any additional costs (in excess of $220 million) incurred prior to a production decision, if required, by way of loan (at an interest rate of prime +2%) to Copper Fox to the extent of its pro rata share, without dilution to Copper Fox's 25% joint venture interest.
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 (at prime + 2%), if requested by Copper Fox, without dilution to Copper Fox's 25% joint venture interest.
The Schaft Creek Joint Venture approved a 2014 program consisting of a comprehensive series of studies to review all aspects (including metallurgical, pit slope design, geological modelling and environmental) of the Schaft Creek project. The 2014 field mapping and core re-logging program to collect additional structural information for pit slope design purposes and to update the geological model for the Schaft Creek deposit was completed by the end of August. The incorporation of this information into the Schaft Creek data base is in progress. Environmental monitoring studies will also continue through 2014. The 2014 Schaft Creek program is estimated to cost approximately $2.5 million.
Feasibility Study (PDF - 21.8MB)
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.