TORONTO (miningweekly.com) – TSX-V-listed copper junior Copper Fox Metals in December announced the positive results of a feasibility study on the Schaft Creek project, in north-western British Columbia (BC), providing for a substantial, economically feasible project with significant expansion potential.
The study, which built on four years of metallurgical and geotechnical work, provides for an openpit mining operation that would process 130 000 t/d over a 21-year mine life, producing and estimated 4.88-billion pounds of copper, 4.21-million ounces of gold, 25.1-million ounces of silver and 214.92-million pounds of molybdenum.
The current project, with its nominal 130 000 t/d milling capacity, represents a 30% increase from that previously proposed in the preliminary feasibility study prepared in September 2008, with a 20% increase in the estimated capital expenditure.
The study placed a price tag of $3.25-billion on the project, including contingencies totalling $374-million and sustaining capital expenditure is expected to total $1.24-billion over the proposed mine life, including $200-million for the BC Hydro tariff.
The project’s base case pretax net present value was calculated using long-term metal prices and exchange rates and an 8% discount rate, as required by Teck Resources, which has an earn-back option on Schaft Creek, at C$513-million and the internal rate of return is 10.13%, with a payback period of 6.5 years.
Copper Fox expects to deliver the feasibility study to Teck, after which Teck will have 120 days to decide what it wants to do. The diversified miner can choose to acquire a 20% stake by spending an amount equal to Copper Fox’s expenditures to date, a 40% stake by spending three times Copper Fox’s investment, or a 75% stake by spending four times Copper Fox’s expenses. As at mid-2012, Copper Fox had spent $84.9-million on the project.
Copper Fox president and CEO Elmer Stewart in a conference call said the company’s intention was from the outset to develop the project to be sold.
The Schaft Creek project currently holds proven and probable mineral reserves of 940.8-million tons containing 5.6-billion pounds of copper, 5.7-million ounces of gold, 363.5-million pounds of molybdenum and 51.7-million ounces of silver.
The company said the feasibility study provides for the expansion of the project based on the current mineral resource and exploration potential of the Schaft Creek mineral trend.
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