COPPER FOX ANNOUNCES FIRST QUARTER 2011 HIGHLIGHTS AND FINANCIAL RESULTS
VANCOUVER, March 31 /CNW/ --
VANCOUVER, March 31 /CNW/ - Copper Fox Metals Inc. ('Copper Fox' or the 'Company') (TSXV: CUU) announces its operating and financial results for first quarter of
2011. The Company is working toward completing an Environmental
Assessment Application, an updated National Instrument 43-101 compliant
Resource Estimate and completion of a Feasibility Study of the Schaft
Creek Mineral Deposit. Copper Fox incurred a net loss for the first
quarter of $358,211 ($0.00 loss per share) and incurred $3,055,491 in
expenditures toward furthering the development of the Schaft Creek
project. Copies of the financial statements, notes and related
management discussion and analysis may be obtained on SEDAR at www.sedar.com, the Company web site at www.copperfoxmetals.com or by contacting the Company directly. All amounts are in Canadian
dollars unless otherwise stated.
Highlights:
TSX Venture 50®
On February 15, 2011 Copper Fox was honored by receiving recognition as
being the top performing company in its sector and also the top
performing company of all the listed companies on the TSX Venture
Exchange. The TSX Venture 50® are the top 10 companies listed on the
TSX Venture Exchange, in each of five major industry sectors - mining,
oil & gas, technology & life sciences, diversified industries and clean
technology - based on a ranking formula with equal weighting given to
return on investment, market cap growth, trading volume and analyst
coverage. All data was as of December 31, 2010.
Property Acquisitions
Subsequent to the quarter end, Copper Fox completed two separate
transactions that resulted in the acquisition of very significant and
strategically located mineral properties (three mineral claims totaling
2,978 Hectares) located immediately north of the Schaft Creek deposit.
The significant technical aspects of the recent acquisitions are:
a) A zone that measures 1,100m long by 300m wide and contains
widespread copper mineralization (bornite and chalcopyrite) in argillic
and propylitic altered volcanic. The 32 samples (historical and current
surface grab and chip sampling) collected from within this zone
averaged 0.87% copper and 0.31 g/t gold, and;
b) A second zone measuring 1,700m long by 250m wide containing
widespread copper mineralization (bornite and chalcopyrite) hosted in
argillic and propylitic altered volcanic. A total of 17 (grab and chip)
samples were collected from this zone in 2008 that averaged 1.24%
copper, 16 g/t silver and 0.07 g/t gold.
The consideration paid for both transactions was $600,000 cash and
1,250,000 common shares of Copper Fox. A 2% NSR royalty applies to each
transaction subject to a Partial NSR Buyout Option which allows the
re-purchase at any time of one-half of the NSR royalty from each of the
vendors for a cash payment of $1.5 million for each transaction.
These mineral claims are located within the Area of Interest
(essentially an 'Area of Mutual Interest') set out in the Teck
Resources Limited (Teck) option agreement, accordingly participation in
these claims will be offered and included in the joint venture should
one be negotiated with Teck (see About Copper Fox below).
Copper Fox also acquired 1.47% of the issued and outstanding shares of
Liard Copper Mines Ltd. ('Liard'), a private company incorporated in BC
from Mrs. Mary Elizabeth Dunn for a cash payment of $269,540 and
245,000 common shares of Copper Fox. Liard holds a 30% Net Profits
Interest (NPI) in the Schaft Creek project.
Financial
During the quarter ended January 31, 2011 the Company received
$3,915,600 (net of costs) in proceeds from a private placement and the
exercise of warrants and options and incurred an additional $3,055,491
of capital expenditures related to the Schaft Creek project. In March
2011, the Company completed a private placement for total proceeds of
$3,750,000 and acquired two very significant mineral properties and
purchased shares of Liard Copper Mines Limited.
The information set out below has been previously released by way of
news releases made by Copper Fox over the past few months.
-- The 2010 diamond drilling confirmed the presence of a large
higher-grade zone of copper-gold-molybdenum-silver
mineralization that is open to the north, east and at depth;
-- Two large zones of copper mineralization that exhibit many
similarities to the higher-grade mineralization located in 2010
in the north end of the Schaft Creek deposit have been added to
the Schaft Creek project;
-- The resource estimation has been temporarily delayed until the
end of April 2011. Copper Fox is working with AMEC to resolve
database issues identified during the data verification
process.
-- Copper Fox received a Section 11 Order approving the
Application Information Requirement (AIR - formerly the Terms
of Reference) for the cooperative environmental assessment
being conducted pursuant to both the British Columbia's
Environmental Assessment Act and the Canadian Environmental
Assessment Act.
Feasibility Study
The balance of the work to be completed on the Feasibility Study
requires the Updated Resource Estimate and accompanying Block Model. On
receipt of this work, Wardrop, a TETRA Tech Company, the main
contractor for the Feasibility Study, can commence work on the Reserve
Estimation, Mine Plan and Pit Optimization Studies. All engineering
deliverables (except for the mining and civil site) were completed
during the first quarter of 2011. Finalization of the haul road and
water diversion ditches will resume after the Mine Plan and Pit
Optimization Studies are completed. Capital costs estimates are
expected to be completed toward the end of the Feasibility Study.
Work on the Feasibility Study by Knight Piésold Ltd. (Geotechnical
consultant) slowed considerably during the quarter pending receipt of
the Resource Estimate. Knight Piésold requires the Mine Plan and Pit
Optimization Studies to complete their portions of the Feasibility
Study.
Discussion with the owners of the bulk concentrate handing facilities at
the Port of Stewart, British Columbia were held to secure facilities
for the shipping of bulk concentrate for smelting and refining.
Resource Estimation
The intersection of higher-grade mineralization at the north end of the
Schaft Creek deposit in September 2010 provided Copper Fox the
possibility of not only increasing the size of the deposit but also the
possibility of increasing the overall average grade, a very important
feature in improving the economics of a porphyry copper deposit. In
order to include the drilling results from the higher-grade zone in the
resource estimate, work on the resource estimation was temporarily
delayed until all of the analytical results from the 2010 drilling and
re-sampling programs were available. AMEC Americas Limited ('AMEC')
received the updated database at the end of February 2011 and resumed
work on the Resource Estimation.
The majority of the data (generated by Asarco, Hecla, Teck) for the
Schaft Creek deposit was collected between 1960 and 1985. The
verification of historical data is challenging, especially in deposits
with a considerable amount of historical data.
A geo-statistical analysis by AMEC showed that the correlations for
copper-gold-and molybdenum analysis between the various companies that
worked at Schaft Creek are acceptable and can be used in the resource
estimation whereas the correlation for silver is low and unacceptable
for resource estimation purposes. The analysis of the core over the
past 60 years (including 2010) shows a significant concentration of
silver occurs with the copper-gold-molybdenum mineralization in the
Schaft Creek deposit. Initially, it was thought that the issue
related to the silver could be resolved to allow inclusion of the
silver in the resource estimate, however, this turned out not to be the
case. The poor correlation for silver is most likely due the
variation in analytical methods and detection limits used over the
exploration history of the property. Notably processing of the
mineralization at Schaft Creek would result in a significant portion of
the silver reporting to the copper concentrate as a by-product credit.
Environmental Assessment Application
On February 7, 2011, Copper Fox received a Section 11 Order approving
the Application Information Requirement (AIR - formerly the Terms of
Reference) for the cooperative environmental assessment being conducted
pursuant to both the British Columbia's Environmental Assessment Act
and the Canadian Environmental Assessment Act. Preparation of the
Environmental Assessment Application and the collection of additional
environmental data continued during the quarter.
Future Activities
The Company's primary objective and main focus is to have AMEC complete
the Resource Estimate. Wardrop, Knight Piésold and Stantec require the
Resource Estimate in order to complete the outstanding portions of the
Feasibility Study and the Environmental Assessment Application.
Field activities for the next quarter include environmental studies and
a high sensitivity airborne magnetic survey to identify areas of
porphyry style copper-gold-molybdenum-silver mineralization. A Titan-24
geophysical system has been retained for a period of one month to
complete additional ground geophysical surveys, on targets identified
by the airborne magnetic survey or other exploration completed on the
property.
The proposed 2011 drilling program is expected to commence in mid-May
(subject to weather conditions) to test the zone of higher grade
mineralization from the 500m to the 800m level below surface. DDH
CF406, which was temporarily suspended in December 2010, would be the
first hole completed in 2011.
The proposed 2011 re-sampling and additional diamond drilling does not
affect the completion date for the Feasibility Study on the Schaft
Creek deposit which is expected by the end of June or early July, 2011.
Selected Financial Information
______________________________________________________________________________
| |Net Loss | Net (loss)/income per share - |
| | | basic and diluted |
|_______|______________________________|_______________________________________|
|2011 | | |
|First |$ |$ |
|Quarter|(358,211) |0.00 |
|2010 | | |
|Fourth |$ |$ |
|Quarter|(421,346) |0.00 |
|Third |$ |$ |
|Quarter|(436,792) |0.00 |
|Second |$ |$ |
|Quarter|(309,067) |0.00 |
|First |$ |$ |
|Quarter|(446,822) |0.00 |
|2009 | | |
|Fourth |$ |$ |
|Quarter|1,533,575 |0.01 |
|Third |$ |$ |
|Quarter|(491,057) |0.00 |
|Second |$ |$ |
|Quarter|(431,763) |0.00 |
|_______|______________________________|_______________________________________|
Liquidity and Capital Resources
The Company's working capital deficiency, defined as current assets less
current liabilities, was $305,904 at January 31, 2011. The Company has
sufficient funds available to meet its current obligations.
During the quarter, the Company completed a private placement for total
proceeds of $4,005,000, 525,000 options were exercised for total
proceeds of $144,900 and a Director loaned $1,500,000 to the Company.
The loan bears no interest and there are no fixed terms of repayment.
In addition, the Company completed a private placement in March for
total proceeds of $3,750,000.
The Company has in place a budgeting process to help determine the funds
required for the completion of the Feasibility Study. As at March 29,
2011 the Company has spent approximately $58.1 million of qualifying
expenditures toward this study. The Company will require additional
capital to complete this study and to provide for the administration of
its Vancouver and Calgary offices. The Company believes that it will
be able to raise the capital required to complete the Feasibility Study
through the continued exercise of its outstanding options or through
the public market if required.
About Copper Fox
Copper Fox is a Canadian based resource company listed on the
TSX-Venture Exchange (CUU) focused on completing a Feasibility Study on
the Schaft Creek deposit, one of the largest undeveloped copper, gold,
molybdenum and silver deposits in North America. Categorized as a
'giant porphyry deposit' this project is at the advanced development
stage with a Preliminary Feasibility Study ('PFS') prepared by Samuel
Engineering, Inc. of Denver, Colorado, in September 2008. The results
of the PFS were extremely 'robust' reporting a NPV @ 8% (before tax) of
$2.8 billion dollars over a 23 year mine life. They contemplated
processing 100,000 tonne per day ('tpd') from an open pit mine using a
standard flotation recovery process. The PFS estimated the current
Mineral Resources (using a 0.2% copper equivalent cutoff) at Schaft
Creek includes; Measured Resources of 463.5 million tonnes grading 0.30% copper, 0.23 g/t gold, 0.02%
molybdenum and 1.55 g/t silver, Indicated Resources of 929.8 million tonnes grading 0.23% copper, 0.15 g/t gold, 0.02%
molybdenum and 1.56 g/t silver.
A Feasibility Study on a minimum 120,000 tpd open pit mine is expected
to be completed in 2011.
Copper Fox holds title and a 100% working interest in a contiguous
24,003.5 hectares (59,311 acres) property which includes the Schaft
Creek deposit subject to certain royalty agreements, a 30% carried
interest held by Laird Copper and an earn back option held by Teck
Resources Limited ('Teck'). Copper Fox is currently earning a 78%
interest in Liard Copper from Teck. Teck's earn back option to acquire
20%, 40% or 75% of the Schaft Creek project is triggered upon
completion of a Positive Feasibility Study. Should Teck elect to
exercise its option for 75% they are required to fund subsequent
property expenditures up to a total of 400% of those incurred by Copper
Fox ($58.1 million as of March 29, 2011) and arrange for project
financing, including the Copper Fox portion. For full details of the
option please refer to the Company's website www.copperfoxmetals.com.
*United States investors are advised that current Mineral Resources are
not current Mineral Reserves and do not have demonstrated economic
viability. All figures are rounded to reflect the relative accuracy of
the estimate and in keeping with 'best practice principles'.
Elmer B. Stewart, MSc. P. Geol., President of Copper Fox, is the
Company's nominated Qualified Person pursuant to National Instrument
43-101, Standards for Disclosure for Mineral Projects, has reviewed the
technical information disclosed in this news release.
On behalf of the Board of Directors
Elmer B. Stewart
President & Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Information
This news release contains 'forward-looking information' within the
meaning of the Canadian securities laws. Forward-looking information
is generally identifiable by use of the words 'believes,' 'may,'
'plans,' 'will,' 'anticipates,' 'intends,' 'budgets', 'could',
'estimates', 'expects', 'forecasts', 'projects' and similar
expressions, and the negative of such expressions. Forward-looking
information in this news release include statements about the
preparation, timing, and anticipated filing of the Environmental Impact
Statement/Application for an Environmental Assessment Certificate for
the Schaft Creek project; continuation of baseline studies and
collection of additional environmental information; the timing and
anticipated results of the proposed Updated Resource Estimate; the
timing and scope of the Feasibility Study for the Schaft Creek project;
estimated timing and amounts of future expenditures and 'earn-back'
options; geological interpretations and potential mineral recovery
processes. Information concerning mineral reserve and resource
estimates also may be deemed to be forward-looking information in that
it reflects a prediction of the mineralization that would be
encountered if a mineral deposit were developed and mined.
The forward-looking information contained in this news release, Copper
Fox has made numerous assumptions, regarding, among other things: the
geological, metallurgical, engineering, financial and economic advice
that Copper Fox has received is reliable, and is based upon practices
and methodologies which are consistent with industry standards; and the
continued financing of the Feasibility Study. While Copper Fox
considers these assumptions to be reasonable, these assumptions are
inherently subject to significant uncertainties and contingencies.
Additionally, there are known and unknown risk factors which could
cause Copper Fox's actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking information
contained herein. Known risk factors include, among others: the
preparation and anticipated filing of the Environmental Impact
Statement/Application for an Environmental Assessment Certificate for
the Schaft Creek project may not occur on a timely basis, or at all;
the Feasibility Study may not be completed within the contemplated time
frame, or at all; the possibility that an Environmental Assessment
Certificate may not be obtained on a timely basis, or at all, or that
additional approvals will be necessary in order to obtain an
Environmental Assessment Certificate; fluctuations in copper and other
commodity prices and currency exchange rates; uncertainties relating to
interpretation of drill results and the geology, continuity and grade
of mineral deposits; uncertainty of estimates of capital and operating
costs, recovery rates, and estimated economic return; the need to
obtain additional financing to develop properties and uncertainty as to
the availability and terms of future financing; the possibility of
delay in exploration or development programs or in construction
projects and uncertainty of meeting anticipated program milestones;
uncertainty as to timely availability of permits and other governmental
approvals.
A more complete discussion of the risks and uncertainties facing Copper
Fox is disclosed in Copper Fox's continuous disclosure filings with
Canadian securities regulatory authorities at www.sedar.com. All forward-looking information herein is qualified in its entirety
by this cautionary statement, and Copper Fox disclaims any obligation
to revise or update any such forward-looking information or to publicly
announce the result of any revisions to any of the forward-looking
information contained herein to reflect future results, events or
developments, except as required by law.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/March2011/31/c8227.html
Investor line 1-866-913-1910 or J. Michael Smith, EVP, at 1-403-264-2820