Projects

Overview

Desert Fox Van Dyke Co., a wholly owned subsidiary of Copper Fox Metals Inc., owns a 100% working interest in the Van Dyke project located in the Globe-Miami Mining District in Arizona.  Van Dyke is an advanced stage, In-Situ Copper Recovery (ISCR) project consisting of 531.5 hectares (1,312.8 acres) of mineral rights and 5.75 hectares (14.02 acres) of surface rights.  The project is subject to a 2.5% gross royalty on revenue.  Arizona is a favorable mining jurisdiction with respect to taxation, regulation, infrastructure and labour.

The Van Dyke copper deposit is located within the Miami-Inspiration trend of porphyry deposits that includes five principle orebodies; from west to east they are Live Oak, Thornton, Miami Caved, Copper Cities and Miami East.  Underground mining operations at Van Dyke are reported to have produced 11.8 million pounds of copper between 1929 and 1945 with a reported grade of 5.0% copper.

Historical Results:
Between 1968 and 1982 Occidental Minerals explored the project and obtained the permits to conduct two ISCR tests. The second test, consisting of five injection/recovery wells and was conducted for a period of approximately two years, the conclusions of which are summarized below:

  • Maximum injection rates were 450 gallon per minute (“gpm”) (at 95% of design capacity) and 275 gpm on a continuous basis,
  • Total copper recovery after 36 months leaching should bring the total to 75% extraction,
  • Demonstrated hydraulic connection for a distance of up to 249 feet (76m), and
  • Porosity and permeability of the formation is suitable for full scale production.

The information on the historical leaching testwork was taken from a report prepared for Occidental titled “Summary of In-Situ Leach Testing on the Van Dyke Copper Deposit Through 1981” by C.R. Caviness dated June 1986.

Between 1988 and 1989 Kocide Chemicals permitted the Van Dyke project and is reported to have recovered 4 million pounds of copper utilizing an ISCR mining method.

Recent Work:
In 2012, Copper Fox purchased the Van Dyke Project and up to the end of 2015 invested $C11 million on exploration of the project resulting in completion of the 2015 Preliminary Economic Assessment (PEA).  On completion of the PEA, the project transitioned from exploration to an advanced stage project.  Between 2016 and early 2020 Copper Fox invested and additional $C1 million in exploration resulting in completion of the 2020 Updated Mineral Resource estimation.

Geologic Model
The Van Dyke copper deposit is the oxidized portion of a porphyry copper deposit that has been subjected to several weathering/oxidation/enrichment cycles.  The mineralization at Van Dyke is hosted in altered and weathered Precambrian age Pinal Schist and Laramide age dikes related to the Schultz granodiorite.  A ‘leach cap’ overlies the main mineralogical zones mapped within the deposit which are, in descending order; Oxide (malachite, chrysocolla, azurite), Supergene (chalcocite) and Hypogene (chalcopyrite).  The Van Dyke fault constrains the mineralization to the north.  The mineralization remains open to the south and southwest consistent with the 2014 and 2015 interpretations.

Drill Hole Database
The resource estimate was completed using data form 38 historic drill holes, historic channel sampling from underground workings on three levels, re-assays of historical drill core and drill core pulps, analytical results from the 2015 metallurgical testwork and data from 6 drill holes completed in 2014.  The total length of core sampled is 13,781.3m from drilling and 1,424m from historic underground channel sampling.

Preliminary Economic Assessment (“PEA”):
In 2014, Copper Fox completed verification diamond drilling, re-assayed 560 original pulps from drilling completed by Occidental and conducted in-situ pressure leach tests on whole core samples from the deposit.  The maiden resource estmate for the project was also completed in 2014.  The positive results of these activities were the basis to proceed with a PEA of the project.

The project transitioned from an exploration to an advanced stage project on completion of the NI 43-101 Technical Report entitled “Preliminary Economic Assessment Technical Report for the Van Dyke Copper Project” dated November 18, 2015, as amended May 19, 2017.  The PEA was prepared by Moose Mountain Technical Services, Mr. Jim Gray, P.Eng., et al as Qualified Persons.  The PEA suggests that Van Dyke is a technically sound, ISCR project with low cash costs and strong cash flows.

Base Case Results of the Preliminary Economic Assessment on the Van Dyke project are shown below:

Van Dyke - Economic Summary Unit Base Case
Life of Mine (LOM) years 11
Copper Cathode Sold Million lbs 456.9
Copper Price $US/lb 3.00
Gross Revenue $ 1,370,000,000
Royalties $ 31,500,000
Operating Costs (includes LOM sustaining costs) $ 619,800,000
LOM Direct Operating Cost ($/pound recovered copper) $/lb copper 0.60
All In Sustaining Cost ($/pound recovered copper) $/lb copper 1.44
Initial Capital Costs (includes 30% Contingency) $ 204,400,000
Taxes $ 110,900,000
NPV & IRR (Base Case)    
Discount Rate % 8%
Pre-Tax Net Free Cash Flow $ 453,100,000
Pre-Tax NPV $ 213,100,000
Pre-Tax IRR % 35.5%
Payback Years 2.3
Post-Tax Net Free Cash Flow $ 342,200,000
Post-Tax NPV $ 149,500,000
Post-Tax IRR % 27.9%
Payback years 2.9

The PEA was based on an Inferred Mineral Resource of 190.7 million tonnes grading 0.33% total copper and 0.19% acid soluable copper.  All dollar amounts are rounded and stated in USD.

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 certainty that the PEA forecasts will be realized or that any of the resources will ever be upgraded to reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Updated Mineral Resource Estimate:
The 2019 program included re-analysis of all historical pulp samples and selected core intervals from historical drill holes and updating the geological model for the Van Dyke deposit.  The positive results of the 2019 program resulted in commissioning an updated resource estimate for the project.

The 2020 resource estimate has established for the first time an Indicated Mineral Resource category for the project, an increase in overal tonnage and a substantial increase in copper metal.  The Updated Mineral Resource estimate for the Van Dyke project is set out below:

             

Metal (Mlbs)

Class

KTonnes

TCu (%)

ASCu (%)

CNCu (%)

RecCu (%)

Recovery (%)

Soluble Cu

Total Cu

Indicated

  97,637

0.33

0.23

0.04

0.24

90

517

   717

Inferred

168,026

0.27

0.17

0.04

0.19

90

699

1,007

KTonnes=thousands of tonnes, TCu=total copper, %=percent, ASCu=acid soluable copper, CNCu=cyanide soluable copper, RecCu=total recovered soluable copper, Mlbs-million of pounds

  1. Sue Bird, P.Eng., an employee of Moose Mountain Technical Services, is the Qualified Person for the Mineral Resource estimate.
  2. The effective date of the estimate is January 9, 2020.
  3. The Indicated and Inferred mineral resources at the Base Case cut-off (0.025% RecCu) include internal dilution or all ‘must take’ material within the confining shape.
  4. The mineral resources are estimated using criteria consistent with the CIM Definition Standards (2014) and the “CIM Estimation of Mineral Resources and Reserves Best Practice Guidelines” (2019).
  5. The “reasonable prospects for eventual economic extraction” shape has been created based on a copper price of $US2,80/lb, employment of in-situ leach extraction methods, processing costs of US$0.60/lb copper, and all in operating and sustaining costs of $US1.25/tonne, a recovery of 90% for total soluable copper and average Specific Gravity of 2.6t/m3.
  6. Approximate drill-hole spacings is 80m for Indicated Mineral Resources.
  7. The average dip of the deposit within the Indicated and Inferred Mineral Resource outlines is 20 degrees.  Vertical thickness of the mineralized envelope ranges from 40m to over 200m.
  8. Rounding as required by Best Practices established by the CIM reporting guidelines may result in slight apparent differences between tonnes, grade and contained metal content.

United States investors are advised that current Mineral Resources are not current Mineral Reserves and do not have demonstrated economic viability.