A Canadian Based Resource Company Focused on Copper Projects in North America

Transcription

1 A Canadian Based Resource Company Focused on Copper Projects in North America September 2014

2 Forward Looking Statements Cautionary Note Regarding Forward-Looking Information This Power Point presentation 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 presentation includes statements about the formation, terms and future activities of the Schaft Creek Joint Venture; further exploration and development of the Schaft Creek project; direct cash payments to Copper Fox upon a Production Decision and upon the completion date of a mine; the timing, financing to advance the Schaft Creek project, including project equity and debt financing for projected capital costs of construction of a mining operation. Copper Fox has made numerous assumptions, 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: the Schaft Creek Joint Venture may not result in a Production Decision being made, or the construction of a mine; further exploration and development of the Schaft Creek property may not occur as expected; cash payments to Copper Fox may not be paid by Teck in the quantum or timing expected, or at all; financing commitments may not be sufficient to advance the Schaft Creek project as expected, or at all; and acquisitions may not materialize. 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 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. All figures are in Canadian Dollars unless otherwise indicated. 2

3 Why Copper Demand: Expected to continue at 2.5% per annum. Consumption: Developed country uses 22 lbs of copper per year/per person whereas developing country uses only 1-2 lbs of copper per year/per person. The average person requires 1,500 lbs of copper just to enjoy today's standard of living in forms of housing, automobiles, phones, electronics, piping, etc. Supply: Shortage expected to develop by 2016 or sooner. Declining Head Grades: Copper ore now yields 30% less copper than it did 20 years ago. Lack of Reserve Development: Only 6% of copper resources discovered in the last 10 years have been upgraded to reserves. 3

4 Copper Forecasts Mt Copper Copper Supply vs Demand Axis Title 6.3 Mt of new mine production capability by 2022 Supply Demand 4

5 Why Copper Fox Significant exposure to copper and gold, including one of the largest undeveloped copper deposits in North America Schaft Creek Cu-Au-Mo-Ag, BC (25%) feasibility study complete, optimization studies underway Van Dyke Copper Project, AZ (100%) drill program completed, metallurgical results expected fall 2014 Eaglehead Cu-Mo-Au Project, BC (42%) geophysical exploration and diamond drilling completed, results pending Sombrero Butte Cu-Mo, AZ (100%) exploration stage, Titan-24 geophysical survey planned $2 million cash plus outstanding tax cash refund to be determined The company is looking to acquire either equity or working interests in additional copper projects in North America Explore, develop, sell business model Experienced Management Team 5

6 Organizational Chart Copper Fox Metals Inc. Northern Fox Copper Inc. Desert Fox Copper Inc. Schaft Creek Joint Venture Carmax Mining Corp. (42% equity interest) Desert Fox Minerals Co. Copper Fox Metals Inc. (25%) Teck Resources Limited (75% & Operator) Eaglehead Cu-Mo-Au Project Desert Fox Sombrero Butte Co. Desert Fox Van Dyke Co. Sombrero Butte Copper Project Van Dyke Copper Project 6

7 Schaft Creek Reserves and Resources MINERAL RESERVE ESTIMATE - SCHAFT CREEK DEPOSIT RESERVE ROM COPPER MOLYBDENUM GOLD SILVER CONTAINED METAL CATEGORY (MILLION TONNES) (%) (%) G/T G/T Cu (MLBS) Mo (MLBS) Au (MOZ) Ag (MOZ) PROVEN PROBABLE , PROVEN AND , PROBABLE CUU SHARE , MLBS = POUNDS EXPRESSED IN MILLIONS MOZ = OUNCES EXPRESSED IN MILLIONS MINERAL RESERVE ESTIMATE SCHAFT CREEK DEPOSIT GREG TROUT, P.Eng. MOOSE MOUNTAIN TECHNICAL SERVICES MINERAL RESOURCE ESTIMATE - SCHAFT CREEK DEPOSIT RESOURCE TONNAGE COPPER MOLYBDENUM GOLD SILVER CONTAINED METAL CATEGORY (MILLION TONNES) (%) (%) G/T G/T Cu (MLBS) Mo (MLBS) Au (MOZ) Ag (MOZ) MEASURED , INDICATED 1, , MEASURED AND INDICATED 1, , CUU SHARE , INFERRED , CUU SHARE % COPPER EQUIVALENT CUT-OFF MLBS = POUNDS EXPRESSED IN MILLIONS MOZ = OUNCES EXPRESSED IN MILLIONS MINERAL RESOURCE ESTIMATE SCHAFT CREEK DEPOSIT ROBERT MORRISON, Ph.D., MAusIMM (CP), P.Geo., EFFECTIVE DATE: MAY 23, 2012 MINERAL RESERVES ARE INCLUDED WITHIN MINERAL RESOURCES This presentation uses the terms resources, measured resources, indicated resources and inferred resources. United States investors are advised that, such terms are recognized and required by Canadian securities laws, the United States Securities and Exchange Commission (the SEC ) does not recognize them. Under United States standards, mineralization may not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time a reserve determination is made. Mineral resources that are not mineral reserves do not have demonstrated economic viability. 7

8 Schaft Creek Feasibility Overview 130,000 tpd open pit/flotation mill (CDN$) NPV (8% discount rate) $513 million NPV (5% discount rate) $1,694 million IRR 10.10% Initial Capital Cost $3.2 billion LOM Sustaining Capital $1.2 billion LOM C-1 Cash Cost (net of by-product credits) $1.15/lb Foreign Exchange: $CDN/$US 0.97 LOM Strip Ratio 1.7:1 Mine Life 21 years Year 1-7 Annual Production LOM Annual Production At Mine Revenue $1.2 billion At Mine Revenue $1.1 billion Copper ('000 lb) 272,000 Copper ('000 lb) 232,143 Gold ('000 oz) 256 Gold ('000 oz) 201 Silver ('000 oz) 1,300 Silver ('000 oz) 1,195 Molybdenum ('000 lb) 10,000 Molybdenum ('000 lb) 10,234 Operating Cash Flow (pre-tax) $627 million Operating Cash Flow (pre-tax) $496 million Metal Prices: US$3.25 lb Cu, US$1, oz Au, US$27.74 oz Ag, US$14.64 lb Mo 8

9 Schaft Creek Peer Comparables $2.70 Margin British Columbia Projects Schaft Creek LOM (941 Mt) Schaft Creek Y1-Y7 (313 Mt) Copper Mountain - CUM (2012) Highland Valley - TCK (2012) Gibraltar - TKO (790 Mt) Mt. Milligan - TC (482 Mt) Red Chris - III (301 Mt) Cobre Panama - FM (3058 Mt) Schaft Creek CuEq Copper Equivalent Copper Molybdenum Gold Silver Source: Schaft Creek Feasibility Study, January 23, Other data source: Scotiabank Equity Research Industry Report, July 3, 2013, Positioning for the Next Cycle Capital Intensity (US$/t CuEq) Average 16,500/t Data based on reserves. Peer data from corporate websites and technical reports. CuEq Calculation: $US 2.00 lb Copper, $US lb Molybdenum, $US oz Gold, $US oz Silver. Assumes 100% metal recoveries. Schaft Creek CapEx = $3.2B Capital Intensity = $15,800/t 0 Sentinel Rosemont Oyu Tolgoi Schaft Creek Sierra Gorda Las Bambas Toromocho Salobo M.M. Hales Casarones 9

10 Schaft Creek Joint Venture 3 Components Cash Payments Pre-Production Decision Costs Construction 1st Payment On signing $20.0m Teck pays first $60.0m Total Expenditures = $60.0m Teck covers 100% of Cap Ex, recovers Copper Fox share from production 2nd Payment On production decision $20.0m > $60.0 million $80.0m reduces 3rd payment to zero Total Expenditures = $140.0m 3rd Payment On completion of construction $20.0m > $140.0 million $80.0m reduces 2nd payment to zero Total Expenditures = $220.0m > $220.0 million Copper Fox share Loan from Prime + 2% 10

11 Schaft Creek Net Cash Distribution (before tax) Before Payout Construction CapEx $3.2b After Payout Average NCF/year $453m Year 6-21 Net Cash Flow (NCF) $3.5b Year 1-5 Net Cash Flow 10% $0.3b Capital Recovery 90% $3.2b Teck 75% $340m/year CUU 25% $113m/year Teck 75% $225m CUU 25% $75m 2 Separate Concentrates Cu 28% + Au-Ag Mo 50% No penalty elements Recoveries Cu 86.5% Au to Cu Concentrate 73% Ag to Cu Concentrate 42% Mo 70% 11

12 Schaft Creek Infrastructure (3D View) DISCOVERY ZONE TSF N AREA OF 2013 DRILLING PROGRAM CONVEYOR SYSTEM CAMP PLANT AIRSTRIP ROCK STORAGE 12

13 Schaft Creek Economic Enhancements Within the proposed open pit there is million tonnes of inferred resource grading: 0.25% copper, 0.16 g/t gold, 0.018% molybdenum and 1.58 g/t silver which for purposes of the feasibility study must be treated as waste rock; (Recoverable CuEq 0.40%) NPV most sensitive to 8% discount, one point adds $75 million to NPV Shorten the project development execution timeline Additional metallurgical testwork to pursue opportunities to increase metal recoveries and reduce processing costs 13

14 Positive Project Parameters 8 Years of Environmental Base Line Studies Northwest Transmission Line Completed Low Annual Precipitation (1.0m/yr) Secured Port Facilities for Concentrate Schaft Creek Project Low Environmental Impact ( 8% PAG Rock/year) No Fish Habitat in Vicinity of Mine Site Stable Jurisdiction 14

15 Van Dyke Project Historical estimate* of million tons grading 0.52% copper at a 0.2% copper cut-off (estimated 1.2 billion lbs of Cu). In-situ pilot recovery tests indicated copper recoveries up to 80% using hydro-fracturing to improve fluid circulation. Deposit measures 1,000m by 800m x 130m (open) verification drilling program completed, mineralized intervals are tabulated below: DDH Zone Azimuth Dip From To Interval Total Total Soluble Total/Soluble ID (m) (m) (m) Copper (%) Copper (%) Copper (%) VD14-01 Oxide VD14-02 Oxide Including VD14-03 Oxide Including VD14-04 Oxide VD14-05 Oxide VD14-06 Oxide Including Core interval does not represent true thickness of the mineralized zone 15

16 Van Dyke Project Location Stable political jurisdiction Four mines in the area (potential partners) Verification drilling program completed Metallurgical Testwork underway Working towards PEA 16

17 Van Dyke 3D Model Historical Grades 800m 1,000m 17

18 Arizona In-situ Recovery Projects DEPOSIT TOTAL COPPER TOTAL COPPER IN-SITU RECOVERY COMPARABLES RECOVERY ANNUAL PRODUCTION MINE LIFE INITIAL CAPITAL PAYBACK PRE-TAX NPV TOTAL COST COPPER (BILLION LBS) GRADE (%) ESTIMATED (%) (MILLION LBS) YEARS ($US MILLION) YEARS ($US MILLION) $US/LB FLORENCE (1) GUNNISON (2) , VAN DYKE (3) (1) Pre-Feasibility Study dated March 23, 2013 (2) Preliminary Feasibility Study effective date January 13, 2014 (3) Historical estimate data, prepared by Occidental Minerals Corporation Pre-Tax NPV discount rate for Florence and Gunnison projects is 7.5% In-situ Recovery Advantages Low operating costs Low capital costs Low cost per pound copper Environmentally friendly No ore or waste rock moved Minimal noise, dust, and emissions Fewer permits required 18

19 Sombrero Butte Project The project is located 9 miles east of the San Manuel Mine (14 billion lbs Cu), and 2 miles south of Redhawk Resources Copper Creek project (7 billion lbs Cu). Redhawk recently announced an LOI with Anglo American to earn up to 80% interest in Copper Creek project by spending $64 million over seven years. Two large copper-molybdenum geochemical anomalies with associated potassic alteration outlined in mineralized breccia pipes on property. Selected mineralized intervals from the 34 holes completed on the Sombrero Butte: Breccia Pipe Drill Hole ID From (m) To (m) Interval (m) Copper (%) Magma SB Campstool SB Sunset SB Rattler SB Audacious SB Victor's SB The mineralized intervals listed in the above table do not represent true widths. 19

20 Sombrero Butte 3D Location 20

21 Eaglehead Project Located 48 km east of Dease Lake in northern British Columbia. Six zones of porphyry-type Cu-Mo-Au-Ag mineralization over 7 km strike length; all zones open along strike and interpreted to be part of larger mineralized zone. The 2012 Inferred Mineral Resource estimation includes only two of the six mineralized zones identified on the property. Inferred Mineral Resource estimate totals million tonnes grading: 0.29% Cu, 0.010% Mo and 0.08 g/t Au (containing 662 million lbs copper, 22 million lbs molybdenum and 265 thousand oz gold within two conceptual open pits). Neighbouring Projects: Imperial Metals Red Chris deposit Capstone Mining s Kutcho mine 21

22 Eaglehead Minerlized Zones Mineralized DDH Resource Areas Open Carmax Mining Corp. Eaglehead Cu-Mo Project Dease Lake Area, British Columbia - 1,000 x 1,000 m Cu-Mo Anomaly - Numerous Mineralized DDH Strong Chargeability Target 22

23 Eaglehead Chargeability Signature 300 m (BLS) Open Mineralized Drill Holes - Over 5 km - All Holes Mineralized Were Sampled Inferred Resource Million Tonnes 0.29% Cu, 0.01% Mo, 0.08 g/t Au 23

24 Eaglehead DDH Cross Section Chargeability Target Width 700 m 24

25 2014 Milestones & News Flow Milestones Resource Estimation on Van Dyke Schaft Creek optimization study results Preliminary Economic Assessment on Van Dyke News Flow Van Dyke metallurgical test results Eaglehead airborne geophysical survey results Eaglehead diamond drilling results 25

26 Company Information Executive & Management Elmer B. Stewart, Chairman, President & CEO P.Geo, MSc. Catherine A. Henderson, Chief Financial Officer Independent Directors Ernesto Echavarria, CPA Erik Koudstaal, CA R. Hector MacKay-Dunn, Q.C. J. Michael Smith, CBA Share Structure Share Price $0.18 Market Cap $73.2M Common Shares 406.6M Fully Diluted 413.9M 1 Year High-Low $ $018 Insider Ownership 57% Outcrop at Schaft Creek 26 Corporate Office Suite 650, Ave SW, Calgary, AB T2R 1L Desert Fox Office 3445 E Highway 60, Miami, AZ Investor Relations investor@copperfoxmetals.com