Copper Fox Metals Inc. [CUU-TSXV; CPFXF-OTC] announced results of a preliminary economic assessment (PEA) for the Schaft Creek copper-molybdenum-gold-silver porphyry deposit located in Tahltan territory, northwestern British Columbia. The Schaft Creek project covers 55,779.56 hectares of mineral concessions located approximately 60 km south of Telegraph Creek near existing transportation and energy infrastructure.
The 2021 PEA will supersede all previous studies and incorporates the updated mineral resource estimate announced on March 22, 2021.
The Schaft Creek project is managed through the Schaft Creek joint venture formed in 2013 between Teck Resources Ltd. [TECK.A, TECK.B-TSX; TECK-NYSE], 75%, and Copper Fox, 25%, with Teck as operator. The NI 43-101 PEA was prepared by Tetra Tech Canada Inc. as the general contractor on behalf of Copper Fox. The results of the PEA are presented on a 100% project basis and in U.S. dollars unless stated otherwise.
Pretax net present value (NPV at 8%) is US$1.4-billion and internal rate of return (IRR) of 15.2%; after-tax (NPV 8%) of US$842.1-million and IRR of 12.9%. Average annual EBITDA (earnings before interest, taxes, depreciation and amortization) of US$695.4-million based on first five years (years 2-6) at full production, and US$10.8-billion life-of-mine (LOM) average annual free cash flow (FCF) before recovery of capital costs of US$633.4-million based on first five years (years 2-6) at full production and US$9.96-billion LOM.
Net smelter return (NSR) is US$20.63/tonne. The 21-year LOM would produce approximately 5.0 billion pounds or 2.3 million tonnes copper, 3.7 million ounces gold, 226.0 million lb molybdenum and 16.4 million oz silver in concentrate.
Production would be 133,000-tonne-per-day (tpd) LOM nominal milling rate at 92% capacity processing 1.03 billion tonnes of mill feed LOM, representing approximately 60% of identified mineral resources.
Estimated initial capital costs of US$2,653-million, not including sustaining capital costs of US$848.7-million, which is inclusive of US$154.0-million closure costs. Operating costs are estimated to be US$8.66/tonne processed.
C1 cost (net of -product credits); for first five years (years 2-6) at full production of US$0.46/lb of payable copper and US$1/lb payable copper LOM with All-in sustaining costs for first five years (years 2-6) at full production of US$0.72/lb payable copper and US$1.18/lb payable copper LOM.
Elmer B. Stewart, president and CEO of Copper Fox, stated: “We are very pleased with the results of the PEA and the recommended program work of CDN$23-million that could be considered by the operator to advance the Schaft Creek project to the prefeasibility study (PFS) stage of study and evaluation. The significantly higher investment returns, resulting in part from project enhancements developed over the past two years, and remaining resources in the deposit on completion of the first 21 years of mining, provides a compelling view of the Schaft Creek project’s financial potential. The smaller project footprint and ability to access hydroelectric power from the existing provincial power grid is expected to reduce capital costs, as well as lower CO2 emissions. The project is a conventional truck-and-shovel development opportunity with scale, optionality and is in a Tier 1 mining jurisdiction.”