Mr. Elmer Stewart reports
COPPER FOX ANNOUNCES A POSITIVE FEASIBILITY STUDY ON THE SCHAFT CREEK DEPOSIT
Copper Fox Metals Inc. has released the results of a positive feasibility study
on the Schaft Creek project located in northwestern British Columbia,
Canada. The feasibility study was prepared under the direction of
Tetra Tech, an industry-leading international engineering firm, with a
high-level review of capital cost completed by Merit Consultants
International Inc. and an internal review conducted by Matt
Bender, MBA, PE. The feasibility study, with capital costs defined to
within plus/minus 15 per cent, builds upon the previous preliminary economic
assessment and preliminary feasibility study prepared by Samuel
Engineering Inc. in January and September of 2008, and metallurgical
and geotechnical work completed in 2009, 2010, 2011 and 2012.
Elmer Stewart, president and chief executive officer, said: "I am extremely proud of the
work put into this feasibility study by the Copper Fox team and its
capable consultants. Like all large-scale projects located in alpine-type terrain, this project did come with its own unique technical
challenges. At an 8-per-cent discount rate as required in the teck option
agreement, the feasibility study confirms the technical and financial
viability of a nominal 130,000-tonne-per-day copper mining and
processing operation at Schaft Creek. The company will host a webcast
conference call in mid-January, details will follow by way of a
separate news release."
The feasibility study recommends diamond drilling to determine the
extent to which the 171.16 million tonnes of inferred resource that lie
within the proposed open pit, now treated as waste, can be upgraded to
either a measured or indicated mineral resource. If successful, this
would categorize this rock as a revenue generator.
The project has a nominal 130,000 tpd milling capacity over a 21-year
mine life representing a 30-per-cent increase from that proposed in the
preliminary feasibility study prepared in September, 2008, with only a
20-per-cent increase in the estimated capital expenditures, no easy achievement.
The feasibility study provides for expansion of the project based on the
current mineral resource and exploration potential of the Schaft Creek
mineral trend. The potential to significantly expand the tailings
storage facility, the current concentrate storage and shipping
agreement with Stewart Bulk Terminals, and most importantly access to
electrical power are positive features that support possible future
expansion of the Schaft Creek project. Opportunity to lower operating
and capital costs, and increase operating revenue could be identified
during the detailed engineering phase of project development.
The project has the advantage of being located in the province of
British Columbia, Canada, a safe geopolitical jurisdiction that strongly
supports resource development.
Highlights of the feasibility study:
- Nominal 130,000 tpd open-pit mine feeding a concentrator with two semi-autogenous grinding (SAG) mills;
- Initial capital cost (capex) totals $3,256-million, which includes
contingencies of $374-million;
- Sustaining capex totals $1.24-billion over the proposed mine life,
including $200-million for BC Hydro tariff;
- Life-of-mine (LOM) metal production contained in concentrates totals
4.88 billion pounds of copper, 4.21 million ounces of
gold, 214.92 million pounds of molybdenum and 25.1 million ounces silver;
- Five years preproduction period followed with a productive mine life of 21
years;
- Proven and probable mineral reserves total 940.8 million tonnes
containing 5.6 billion pounds copper, 5.7 million ounces gold, 363.5
million pounds molybdenum and 51.7 million ounces silver on the basis
of drill data up to May 23, 2012;
- Within the pit shell there is a total of 171.16 million tonnes of
inferred resource grading 0.25 per cent copper, 0.018 per cent molybdenum, 0.164 gram
per tonne gold and 1.58 g/t silver, which for purposes of this
study must be treated as waste rock;
- LOM average mill feed grades of 0.271 per cent copper, 0.191 g/t gold, 1.716 g/t
silver, 0.018 per cent molybdenum and a copper-equivalent (CuEq) of 0.441 per cent.
The CuEq is back calculated based on how much in situ copper is
required to provide the same after-recovery value to equal the combined
metals value after recovery.
Summary of economic results
Base case pretax net present value for the Schaft Creek deposit
using long-term metal prices and exchange rates, and an 8-per-cent discount rate
is $513-million. Internal rate of return is 10.13 per cent and a
payback period of 6.5 years. In addition to the base case, three
alternative cases were presented. Alternative cases one and two are
using three-year trailing average and spot metal prices (as of Oct. 15, 2012), respectively, and are presented for comparative purposes.
Of particular significance is the third alternative case using the
sophisticated economic science referred to as real option valuation
(ROV). NPV at an 8-per-cent discount rate for the alternative cases one, two and three are $967-million, $1,024-million and $1,382-million,
respectively.
ROV is a discounted cash flow technique that incorporates the
uncertainty of future metal prices and exchange rates, as well as the
management flexibility to adjust the operating status of the mining
operations in the future based on the market conditions. ROV applies a
dynamic optimization process that compares the values of the
alternative plans at each point of time and makes decisions that
maximize the present value of the whole project. Market variables are
modelled using stochastic processes such as geometric Brownian motion
and mean-reverting process. Numerical techniques such as finite
difference, binomial lattice and Monte Carlo simulations are applied to
the ROV. In this project, the Monte Carlo method was applied using
100,000 simulations.
Project enhancements
The feasibility study makes recommendations for further development of
the project that could enhance the economics of Schaft Creek including:
- Copper Fox undertakes a diamond drilling program at Schaft Creek with a goal to determine the extent to which the 171.16 million tonnes of inferred resource, that lie within the pit shell, can be upgraded to a measured or indicated resource. To the degree such a program is successful it will remove the affected material from being categorized as a rock-removal expense to an ore-bearing material and as such, a revenue generator;
- Additional metallurgical testwork to pursue opportunities to increase metal recoveries and reduce processing costs;
- Shorten the project development execution timeline.
Permits
Copper Fox is currently preparing the British Columbia
environmental assessment (EA) application and a federal environmental
impact statement (EIS), both required to obtain a B.C. EA certificate and
federal approval. Copper Fox anticipates submitting the EA application
and EIS as early as third quarter 2013. Copper Fox is also developing the permit
applications required to construct the access road to the mine site.
Access road permits have been prioritized based on the construction
schedule presented in the feasibility study. Other permit applications
required for mine site construction will follow completion of the EA
application and EIS.
Development schedule
- Project development will take place over a five-year period after initial
permitting and engineering;
-
Permitting completed June 30, 2014;
-
Engineering completed February, 2016;
-
Access road construction completed March, 2016;
-
Construction phase one completed July, 2019, and phase two March, 2020;
-
Commercial production phase one start December, 2019, and phase two August,
2020.
Mineral resources
The project mineral resource was prepared by Tetra Tech with an
effective date of May 23, 2012, as previously disclosed in a news
release on May 31, 2012, and filed on SEDAR on June 25, 2012.
SCHAFT CREEK MINERAL RESOURCE ESTIMATE
(Using a 0.15 g/t CuEq cut-off)
Contained metal
Resource Tonnes Copper Molybdenum Gold Silver Cu Mo Au Ag
category (%) (%) (g/t) (g/t) (lb) (lb) (oz) (oz)
Measured 146,615,300 0.31 0.017 0.24 1.78 1,001,824,600 55,624,000 1,149,100 8,402,700
Indicated 1,081,939,500 0.26 0.017 0.18 1.68 6,104,400,000 399,718,500 6,218,000 58,335,500
M+I 1,228,554,800 0.26 0.017 0.19 1.69 7,106,224,600 455,342,500 7,368,000 66,738,200
Inferred 597,191,300 0.22 0.016 0.17 1.65 2,872,034,300 206,252,100 3,359,600 31,601,400
Notes to mineral resources tables
- Mineral resources are inclusive of mineral reserves.
- While the terms measured (mineral) resource, indicated (mineral) resource and inferred (mineral) resource are recognized and required by National Instrument 43-101, 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.
- A 0.15-per-cent CuEq cut-off was selected for the base case resource estimate. A 0.15-per-cent CuEq cut-off was the minimum grade of CuEq estimated by Tetra Tech required (using the estimated copper recovery rate, the milling and sales cost) to break even on an operating-cost-per-tonne basis.
- CuEq grade cut-offs were used to report the mineral resource estimation as a function of copper, molybdenum, gold and silver. The CuEq is based on Tetra Tech's long-range metal prices of $2.97 (U.S.)/pound for copper, $16.80 (U.S.)/pound molybdenum, $1,256 (U.S.)/ounce gold and $20.38 (U.S.)/ounce for silver, and metal recoveries of 60.90 per cent for molybdenum, 70.6 per cent for gold and 43.4 per cent for silver. No copper recoveries were applied to the copper-equivalent grade.
- Rounding as required by reporting guidelines may result in apparent summations differences between tonnes, grade and contained metal content.
- Tonnage and grade measurements are in metric units. Contained copper and molybdenum are reported as pounds, and contained gold and silver are reported as troy ounces.
Mineral reserve
Proven and probable mineral reserves are the economically minable
portions of the measured and indicated mineral resources set out in the
table, respectively, as demonstrated by the feasibility study.
The proven and probable reserves at Schaft Creek are summarized in the table.
SCHAFT CREEK MINERAL RESERVE ESTIMATE
Reserve category Run of mine Copper Molybdenum Gold Silver
(Mt) (%) (%) (g/t) (g/t)
Proven 135.4 0.31 0.0175 0.25 1.81
Probable 805.4 0.26 0.0176 0.18 1.70
Proven and probable 940.8 0.27 0.0176 0.19 1.72Notes to mineral reserves table
- Mineral reserves are contained within measured and indicated pit designs.
- Appropriate mining costs, processing costs metal recoveries and interramp pit slope angles varying from 27 degrees in overburden to 45 degrees in bedrock were utilized to generate the pit phase design.
- Mineral reserves have been calculated using a net-smelter-return cut-off. The NSR was calculated as follows: NSR equals recoverable revenue minus TCRC (on per-tonne basis), where TCRC equals transportation and refining costs; recoverable revenue equals revenue for recoverable copper, molybdenum, gold and silver, respectively, using metal prices of $3.52 (U.S.)/pound, $15.30 (U.S.)/pound, $1,366 (U.S.)/ounce and $25.96 (U.S.)/ounce for copper, molybdenum, gold and silver, respectively; at an exchange rate of 96 cents to to $1 (U.S.); metal recoveries used are based on recovery curves if critical average recoveries could be calculated.
- The LOM average strip ratio (waste to ore) is 2 to 1, excluding rehandle.
- Significant digits on run of mine are rounded to one decimal point.
- Rounding as required by reporting guidelines may result in apparent summations differences between tonnes, grade and contained metal content.
- Tonnage and grade measurements are in metric units. Contained copper and molybdenum are reported as pounds, and contained gold and silver are reported as troy ounces.
- The proven and probable mineral reserves are included within the measured and indicated mineral resources as estimated by Tetra Tech on May 23, 2012.
Project description
The Schaft Creek deposit is located approximately 60 kilometres south of
Telegraph Creek, 375 kilometres northwest of Smithers and 340
kilometres northwest of Terrace on the east side of the Coast Mountain
range, where annual precipitation is approximately 900 millimetres per year in the
form of rain and snow.
Copper Fox holds title and a 100-per-cent working interest in the Schaft Creek
project located within Tahltan traditional territory consisting of
55,779.56 hectares (137,834 acres) in northwestern British Columbia.
Included in this total are the Schedule A mineral tenures originally
conveyed to Copper Fox pursuant to the option agreement dated Jan. 1, 2002, between Teck Resources Ltd. and Copper Fox, which consist of 8,334.34 hectares (20,594
acres). The Schedule A mineral tenures are subject to a 3.5-per-cent net-profits interest held by Royal Gold Inc., a 30-per-cent carried net-proceeds
interest held by Liard Copper Mines Ltd. 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 earns Teck's 78-per-cent interest in Liard. Teck's earn-back option
to acquire either 20 per cent, 40 per cent or 75 per cent of Copper Fox's interest in the
Schaft Creek project is triggered upon delivery of a positive bankable
feasibility study (as defined) to Teck after which it has 120 days
to make a decision. Should Teck elect to exercise its earn-back option
for 75 per cent, Teck is required to finance subsequent property expenditures up
to a total of 400 per cent of those incurred by Copper Fox ($84.9-million to
July 31, 2012) and use best efforts to arrange for project financing,
including the Copper Fox portion. For full details of the Teck earn-back option please refer to the company's website.
Mining of the Schaft Creek deposit is planned as a conventional
truck-shovel open-pit mining operation with a nominal 130,000 tpd
throughput over the LOM. The current 940.8-million-tonne mineral
reserve should support a mine life of approximately 21 years (47.4
million tonnes per year). There is potential to extend the mine life
with additional infill drilling to upgrade the approximately 171.16
million tonnes of current inferred resource located within the proposed
open pit. Additional exploration of the Schaft Creek deposit to the
east and the north of the Paramount zone, and north of the Liard zone, as
well as the recently discovered Discovery zone could extend the mine
life of the Schaft Creek project.
Processing of the ore would utilize a conventional copper ore-grinding
and flotation circuit to produce a high-quality copper concentrate
with significant gold and silver credits, and a separate molybdenum
concentrate. Mining and waste rock facilities would be located in the
Schaft Creek Valley and Mess Creek Valley, with the plant,
infrastructure, airport and tailings facilities being located adjacent
to Mess Creek Valley, Skeeter and Start Lakes.
Annual mine production of ore and waste is projected to average
approximately 147 million tonnes per year with an in situ LOM waste/ore
stripping ratio of 2 to 1. Run-of-mine ore would be fed into two gyratory
crushers located at the edge of the open pit in the Schaft Creek Valley
and transported via conveyor from the Schaft Creek Valley to a coarse
ore stockpile near the proposed mill site in the Start Lake Valley.
The proposed process plant would be a conventional double-line
grinding-flotation concentrator. The plant site has sufficient mill pad
area to install a third processing line to increase daily throughput to
180,000 tpd should expansion of the mine be required to optimize the
economics of the project. Tailings would be transported to the tailing
storage facility (TSF) through pipelines. Concentrates would be
transported by trucks to port facility in the town of Stewart, B.C., and
the molybdenum concentrate to the Fairview Terminals in Prince Rupert,
B.C., for shipment to various international destinations.
The closest provincial road to the mine site is Highway 37. The access
road to the Schaft Creek project would be used to transport material
and consumables to and from the mine site, and to deliver mine capital
equipment. Personnel would be transported to and from the Schaft Creek
site via aircraft. The road would have controlled access to ensure the
health and safety of company personnel and the public, as well as to
protect the environment. Copper Fox is in the process of preparing its
environmental assessment application which is required before
application can be made for permits to construct the access road and
power line to the Schaft Creek site. Copper Fox's plan would be to
reach agreement with Galore Creek Mining Corp. regarding joint
use of the access road from Highway 37 (kilometre zero) to approximately
kilometre 65, including construction of the More Creek Canyon Bridge and
completion of an additional 25.2 kilometres of the Galore Creek road
for a total distance of 65.2 kilometres. The balance of the access road
would be single lane, with occasional pullouts. Power for the project
would be provided from the Northwest transmission line (NTL)
currently being constructed by the provincial electrical authority, BC
Hydro. An 81-kilometre-long, 287-kilovolt power line would run to the
processing site substation.
The time period estimated from completion of the feasibility study to
allow for permitting, detailed engineering, equipment procurement,
construction, and start-up to production is approximately seven years. This
time period may be significantly shortened during the detailed
engineering phase and by running concurrent activities.
Mining
The Schaft Creek pit design for the feasibility study includes seven
phases. The initial phase is the excavation of the material required
for the construction of the conveyor to transport ore to the mill. The
second phase, labelled 1N, is a starter pit in the Paramount zone at the
north toe of the east face of Mount LaCasse, to provide construction
waste and stockpile high-grade ore to be processed in year one. The
third and fourth phases mined are 1S and 2S, which are the low-strip-ratio phases at the south end of the Liard zone. The fifth and sixth
phases mined are 2N and 3N, the north phase pushbacks. The final
phase is 4N, which extends to the ultimate pit bottom, which, based on
the resource block model, would end in mineralization. Access to each
phase and bench is continuously provided by ramps built into the highwall or cut into the rehandle face.
The total waste mined is estimated to be 1.89 billion tonnes. A portion
of the waste mined will be used for road, TSF and infrastructure
construction. The balance of the waste is planned to be stored in
three separate areas located at varying distances from the proposed
open pit, designated the east, west and south dumps.
Process plant
Initial planned mill throughput is 65,000 tpd, which will be increased
to 130,000 tpd after approximately one year of operation. The ore from
the pit will be conveyed to the process plant located approximately eight kilometres northeast of the pit. The process for metal recovery from
the ore is conventional flotation, consisting of two process trains.
Each of the process trains consists of SAG mill/ball mills/pebble
crushers (SABC) primary grinding, bulk rougher/scavenger flotation,
bulk concentrate regrinding and cleaner flotation circuits. The bulk
concentrate produced will be separated to produce market-grade
copper-gold-silver concentrate and molybdenum concentrate. Metal
recoveries to the copper concentrate containing at least 28 per cent copper are expected to be 86.6 per cent for copper, 73.0 per cent for gold and 48.3 per cent
for silver. The molybdenum recovery to the molybdenum concentrate
(plus-50 per cent Mo) is estimated to be 58.8 per cent.
Estimated metal production
Over the 21-year mine life, the parameters of the mining operation, and
metals production to the copper concentrate and molybdenum concentrate
are summarized in the table.
SCHAFT CREEK MINE PRODUCTION SUMMARY
Parameter Life of mine
Tonnes ore milled (000) 940,800
Strip ratio 2.0
Grade
Copper (%) 0.27
Gold (g/t) 0.19
Molybdenum (%) 0.018
Silver (g/t) 1.72
SCHAFT CREEK CONCENTRATE METAL PRODUCTION
Description Year 1-5 annual avg. Year 1-10 annual avg LOM annual avg LOM total
Copper concentrate (kt) 445 420 376 7,897
Copper in concentrate (Mlb) 274 259 232 4,875
Copper in concentrate (kt) 124 118 105 2,211
Gold in concentrate (koz) 237 237 201 4,213
Silver in concentrate (koz) 1,229 1,280 1,195 25,100
Molybdenum concentrate (t) 8,420 8,957 9,284 194,967
Molybdenum in concentrate (klb) 9,281 9,873 10,234 214,914
The LOM average metal content of copper concentrate is estimated to
contain 28 per cent copper and 16.6 g/t gold, 98.9 g/t silver, and the
molybdenum concentrate at 50 per cent molybdenum. The average impurity element
levels in the final concentrates would be lower than the penalty limits
based on the test results. The moisture content is estimated to be
9.0 per cent for the copper concentrate and 5.0 per cent for the molybdenum
concentrate.
The copper concentrates will be trucked via Highway 37 to Stewart for storage and loading. In 2011, Copper Fox executed an
agreement with Stewart Bulk Terminals for the storage and shipment of
up to 600,000 tonnes of concentrate per year to provide for export of
the copper concentrates to foreign markets (see news release dated
Oct. 12, 2011).
Tailings storage facility
The project requires the design of a TSF with the flexibility to manage
tailings from either one or both of the processing trains. The south
end of the TSF is located approximately 1.8 kilometres north of the
milling facilities in Skeeter Valley and the facility is designed to
accommodate approximately 941 million tonnes of tailings during
the 21-year mine life. Total capacity of the TSF could be
significantly expanded by increasing the height of the retaining
embankments.
Infrastructure
The project will require the development/construction of a number of
infrastructure items. The locations of the facilities and other
infrastructure items were selected to take advantage of local
topography, accommodate environmental considerations, and ensure
efficient and convenient operation of the mine haul fleet.
Project infrastructure will include:
- A secure single-lane access road with double-lane sections to support the construction and operation of the project. This road will include, and extend from, the partially constructed (approximately 40 kilometres), existing Galore Creek access road. The road will follow the Galore Creek access road/route for the first 65.2 km from Highway 37. At kilometre 65.2 it turns north from the Galore Creek access route. Approximately 40 km of new road will be constructed north through the Mess Creek Valley to the mine site;
- A 287-kilovolt power line from Bob Quinn to the site covering a total distance of approximately 81 km;
- 105.26-kilometre fuel pipeline from Tahltan depot/Highway 37 to site, including diesel fuel supply and distribution;
- TSF complete with diversion channels including a reclaim water system;
- Site haul roads;
- New on-site airport capable of receiving aircraft with a capacity of up to 78 passengers;
- A depot located at the juncture of Highway 37;
- Water supply and distribution system;
- Sewage disposal plant;
- Lay-down area;
- Process and ancillary facilities;
- Power distribution network;
- Communications infrastructure.
Social and environment
Copper Fox is committed to maximizing benefits and economic
opportunities for local communities and local first nations, including
employment and training.
Environmental baseline work on the project started in 2006 and has
continued through 2012. The project is currently in the first of the
province's two-staged EA process. The preapplication stage focuses on
identification of the issues and concerns to be addressed in the
application and reflected in the AIR. The preapplication stage is
considered completed on acceptance of the application for review by the
EAO, initiating the application review stage of the EA process. The
application must comply with the project-specific AIR that is formally
approved and issued by the EAO.
Closure and reclamation plans will be considered and updated throughout
design, construction and operation of the project to help ensure that
the objectives can be successfully achieved. Reclamation plans have
been prepared for the TSF, open pit and waste rock.
Capital cost estimates
The project initial capital costs are estimated at $3,256-million
(approximately $22,200/operating tonne, excluding contingency) with an
accuracy of plus/minus 15 per cent as of third quarter 2012, including a contingency of
$373.8-million (11.5 per cent of initial direct and indirect capital cost
estimate). The estimates are consistent with a Class 3 estimate. Major
items of the capital costs estimate are set out in the table.
INITIAL CAPITAL COSTS
Item $M
Direct costs
Overall site 251.06
Mining 483.47
Primary crushing 179.62
Grinding, flotation and regrind 594.68
Tailing management facility 212.23
Site services and site utilities 23.86
Ancillary buildings 202.15
Plant mobile fleet 8.88
Temporary services 5.20
Off-site infrastructure and facilities 202.34
Total direct costs $2,163.49
Indirect costs
Project indirects 601.24
Owner's costs 118.04
Total indirect costs 719.28
Total direct and indirect costs $2,882.77
Contingency at 11.5% 373.80
Total initial capital $3,256.57
This estimate includes direct field costs, and indirect costs associated
with design, construction and commissioning. This estimate is based on
pricing as of third quarter 2012, with no allowances for inflation or escalation.
LOM sustaining capital is estimated to total $1.24-billion over the
projected 21-year mine life, and includes development of the open-pit
deposit, BC Hydro tariff ($200-million) for the power line from Bob
Quinn to site, replacement of and additions to surface mobile
equipment, reclamation costs, and additional expenditures to expand the
capacity of the TSF. A breakdown of the major components of the
sustaining costs is set out in the table.
LOM SUSTAINING CAPITAL
Area $M
Mining 707
Tailings 333
BC Hydro 200
Total sustaining capital $1,240Operating costs
LOM site unit operating cash costs, net of capitalized prestripping and
other predevelopment costs, are $13.33 per tonne milled, as summarized
in the table.
LOM OPERATING COSTS
Area LOM $/t milled
Mining 6.56
Processing 4.87
Tailings facility 0.22
Depot services 0.52
Surface services 0.34
General and administration 0.82
Total 13.33
Open-pit mining cash costs average $6.56 per tonne of ore mined,
including waste and ore mining costs. The in situ life-of-mine average
strip ratio (waste to ore) is estimated to be 2 to 1.
LOM copper production total and cash costs per produced pound, including
mine site operating costs, smelter and refining charges, and concentrate
transport cost, average $2.09/pound and $1.15/pound, respectively.
Economic analysis summary
The project economics were evaluated whereby revenues and costs are
projected into the future on an annual basis. Annual net cash flows
are then discounted at a rate of interest to reflect the time value of
money to yield an NPV. The analysis includes all site operating costs,
smelter charges, transport costs and royalties.
The most significant input which affects project economics is projected
future metals prices. The four economic cases using the previously
discussed input parameters are set out in the table.
SUMMARY OF ECONOMIC RESULTS
Item Base case 3-year avg case* Spot price case** Real options case
Metal price
Copper (US$/lb) 3.25 3.63 3.69 3.25
Gold (US$/oz) 1,445.00 1,445.00 1,736.00 1,445.00
Silver (US$/oz) 27.74 27.74 32.71 27.74
Molybdenum (US$/lb) 14.64 14.64 11.34 14.64
Exchange rate (US:Cdn) 0.97 0.99 1.02 0.97
Pretax economic results
Operating cash flow ($M) 10,746 12,065 12,161 11,284
NPV (at 5%) ($M) 1,694 2,348 2,419 2,665
NPV (at 8%) ($M) 513 967 1,024 1,382
NPV (at 10%) ($M) 25 388 437 836
IRR (%) 10.13 11.9 12.14 15.4
Payback (yr) 6.48 5.81 5.7 4.9
Cash cost/lb Cu ($/lb) 1.15 1.19 1.12 1.15
Total cost/lb Cu ($/lb) 2.09 2.14 2.07 2.09
Avg annual operating cash flow*** ($M) 371 414 425 640
* Between Oct. 15, 2009, to Oct. 15, 2012.
** On Oct. 15, 2012.
*** Years one to five.
At the prices used in the base case for this study, total estimated
taxes payable on Schaft Creek profits are $1,858-million over the
21-year mine life. The components of the various taxes that will be
payable are in the table.
ESTIMATED TAXES PAYABLE
Tax component LOM amount
($M)
Corporate tax (federal) 841
Corporate tax (provincial) 561
Provincial resource tax 456
Total taxes 1,858
AFTERTAX ECONOMIC RESULTS
Description Base case ROV case
Net cash flow ($M) 4,270 5,133
Discounted cash flow NPV at 5% ($M) 956 1,260
Discounted cash flow NPV at 8% ($M) 67 529
Payback (years from start of mill operations) 6.8 5.7
IRR (%) 8.3 12.7Qualified persons
On Jan. 15, 2010, Copper Fox commissioned Tetra Tech to complete the
Schaft Creek project feasibility study in accordance with NI 43-101. A
team of qualified persons from Tetra Tech, McElhanney Consulting
Services Ltd., Moose Mountain Technical Services
(MMTS) and Knight Piesold Ltd. (KP) prepared and reviewed the
feasibility study.
The detailed mine plan was prepared by MMTS under the direction of Greg
Trout, PEng. The scientific and technical information in this release
has been reviewed by Marten Regan, senior project manager, Tetra
Tech, overall manager for the feasibility study.
Other qualified persons involved in the feasibility study were:
- Tetra Tech: Ali Farah, PEng; Dr. Robert Morrison, PhD, MAusIMM
(CP), PGeo; Hassan Ghaffari, PEng; Dr. John Huang, PhD, PEng; Dr. Monica
Danon-Schaffer, PhD, PEng; Rui Adanjo, PEng; Dr. Sabry
Hafez, PhD, PEng; and Harvey Stoyko, PEng;
-
KP: Daniel Friedman, PEng; and Daniel Yang, PEng;
-
McElhanney: David Pow, PEng.
This release was also reviewed by Elmer Stewart, PGeol, MSc,
president and chief executive officer of Copper Fox, non-independent
qualified person within the meaning of NI 43-101.
Readers should refer to the feasibility study technical report for
further details of the project development. The feasibility study
technical report will be filed in accordance with NI 43-101 on SEDAR within the required 45-day statutory period and will be made available
on Copper Fox's website.
We seek Safe Harbor.
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