Mr. Elmer Stewart reports
COPPER FOX FILES PRELIMINARY ECONOMIC ASSESSMENT OF VAN DYKE PROJECT ON SEDAR
Copper Fox Metals Inc. has filed on SEDAR a National Instrument 43-101 technical report titled "NI 43-101 Preliminary Economic Assessment Technical Report for the Van Dyke Copper Project" dated Feb. 26, 2021, prepared by Moose Mountain Technical Services (MMTS) and Ausenco. The results of the preliminary economic assessment (PEA) for the Van Dyke project were disclosed in a previous news release dated Jan. 12, 2021.
Elmer B. Stewart, president and chief executive officer of Copper Fox, stated: "The four-fold increase in value over that demonstrated by the 2015 PEA, and significant potential to increase the resource base through exploration, has shown the Van Dyke deposit to be a technically sound, in situ copper recovery (ISCR) project. While the PEA is preliminary in nature, the results of which are speculative, the study has indicated several opportunities for additional value-added work programs to be completed which, if successful, would significantly derisk the project."
PEA recommendations
- A diamond drilling program to expand the size of the resource and upgrade the existing indicated and inferred resources to a higher resource classification;
- Proceed to the permitting stage to obtain an Arizona protection permit and the underground injection control permit for Class III wells;
- Complete an ISCR (in situ chemical reduction) pilot test program designed to further investigate overall metal recoveries, connectivity between wells, refine well field design and determine the extent of rock stimulation required, if any. The total recommended budget is estimated to be $15.5-million (U.S.).
The PEA used the technical report that Copper Fox filed on SEDAR May 5, 2020, entitled "NI 43-101 Technical Report and Updated Resource Estimate for the Van Dyke Copper Project" dated May 4, 2020, with Sue Bird, PEng, and R. Lane, PGeo, as qualified persons. The 2020 resource estimate resulted in an upgrade in resource classification and an increase in soluble copper content of the deposit.
2020 RESOURCE ESTIMATE USED IN THE 2020 PEA
Metal (Mlb)
Class K tonnes T Cu (%) 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
TCu is total copper, soluble Cu is estimated pounds of recoverable copper.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
2020 PEA HIGHLIGHTS: BASE CASE
Production and cost summary Units 2015 PEA 2020 PEA
Life of mine (LOM) years 11 17
Copper cathode sold Million lb 456.9 1101.0
Copper price $US/lb 3.00 3.15
Gross revenue M$US 1,370.0 3,468.3
Royalties M$US 31.5 82.5
Total cash costs M$US 550.2 1,075.8
Total cash costs ($/lb recovered copper) $US/lb copper 1.20 0.98
C1 cash costs ($/lb recovered copper)* $US/lb copper 1.08 0.86
Sustaining costs ($/lb recovered copper) $US/lb copper 0.15 0.07
All-in sustaining cost (AISC)** $US/lb copper 1.36 1.14
Initial capital costs (includes contingency) M$US 204.4 290.5
Taxes M$US 110.9 321.0
Cash flow parameters and outputs
Discount rate % 8.0% 7.5%
Pretax net free cash flow M$US 453.1 1,757.3
Pretax NPV M$US 213.1 798.6
Pretax IRR % 0.4 48.4%
Pretax payback years 2.3 2.0
Posttax net free cash flow M$US 342.2 1,436.3
Posttax NPV M$US 149.5 644.7
Posttax IRR % 27.9% 43.4%
Posttax payback years 2.9 2.1
* Includes mining, processing, site services, general and administrative, transportation,
and royalty costs.
** Includes total cash cost, sustaining capital, royalties, severance taxes. The "Project economics to copper prices" table summarizes the project economics to copper prices (base case at $3.15 (U.S.) per pound).
PROJECT ECONOMICS TO COPPER PRICES
Copper price
Production Unit $US3.15 $US3.30 $US3.50
Gross revenue M$US 3,468.3 3,633.5 3,853.7
Royalties M$US 82.5 86.4 91.7
Taxes M$US 321.0 350.4 389.7
AISC ($lb/recovered copper) $US/lb 1.14 1.15 1.15
Cash flow parameters and outputs Unit $US3.15 $US3.30 $US3.50
Pretax net free cash flow -- EBITDA M$US 1,757.3 1,901.4 2,093.5
Pretax NPV M$US 798.6 870.9 966.7
Pretax IRR M$US 48.4% 51.3% 55.1
Posttax net free cash flow M$US 1,436.3 1,551.0 1,703.8
Posttax NPV M$US 644.7 701.8 777.9
Posttax IRR M$US 43.4% 45.8% 49.1%
The results of the 2021 PEA are preliminary in nature as it includes 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.
Qualified persons
Sue Bird, PEng, of MMTS; R. Lane, PGeo, of MMTS; T. Meintjes, PEng, of MMTS; and Jim Norine, PE, of Ausenco; are the QPs pursuant to National Instrument 43-101, Standards for Disclosure for Mineral Projects. Elmer B. Stewart, MSc, PGeol, president and chief executive officer of Copper Fox, is the company's non-independent, nominated qualified person pursuant to National Instrument 43-101, Standards for Disclosure for Mineral Projects, and has reviewed and approves the scientific and technical information disclosed in this news release.
About Copper Fox Metals Inc.
Copper Fox is a Tier 1 Canadian resource company listed on the TSX Venture Exchange, focused on copper exploration and development in Canada and the United States. The principal assets of Copper Fox and its wholly owned Canadian and United States subsidiaries, being Desert Fox Copper Inc. and Northern Fox Copper Inc., are the 25-per-cent interest in the Schaft Creek joint venture with Teck Resources Ltd. on the Schaft Creek copper-gold-molybdenum-silver project located in northwestern British Columbia and a 100-per-cent ownership of the Van Dyke oxide copper project located in Miami, Ariz.
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