VANCOUVER, Sept. 27, 2013 /CNW/ - Copper Fox Metals Inc.
('Copper Fox' or the 'Company') (TSX-V: CUU) is pleased to
announce its third quarter 2013 operating and financial
results. Copper Fox had net income for the third quarter of
$3,117,445 after reversal of a
deferred tax liability of $3,887,762
and expenses of $770,317
($0.01 income per share). The Company
also incurred $853,074 in
expenditures toward furthering the development of the Schaft Creek
project, which is capitalized to mineral properties. 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:
Schaft Creek Joint Venture
During the quarter ended July 31,
2013, the Company reached a significant milestone in the
advancement of the Schaft Creek project when it announced the
formation of the Schaft Creek Joint Venture with Teck Resources
Limited ('Teck'). The Schaft Creek Joint Venture is held 75%
by Teck and 25% by Copper Fox with Teck as the operator effective
July 15, 2013. The Schaft Creek
project is a large, undeveloped copper-molybdenum-gold-silver
porphyry deposit located in northwestern British Columbia, Canada.
The terms and conditions of the Schaft Creek
Joint Venture Agreement are set out in a News Release dated
July 15, 2013. The Schaft Creek
Joint Venture agreement replaces and supersedes the 2002 option and
property acquisition agreement between Teck and Copper Fox in
connection with the Schaft Creek project. The salient points
of the Schaft Creek Joint Venture are:
- Teck will pay a total of $60
million in three direct cash payments to Copper Fox:
$20 million upon signing the Schaft
Creek Joint Venture Agreement, $20
million upon a Production Decision, $20 million upon the completion of the mine
facility as well as reimburse Copper Fox $3.93 million which is equal to 75% of the
expenses it incurred related to land acquisition and the Port of
Stewart facility;
- Teck will fund 100% of the first $60
million in costs related to the Schaft Creek project
incurred subsequent to formation of the Schaft Creek Joint Venture
as well as Copper Fox's 25% share of any pre-production costs in
excess of first $60 million. If the
pre-production costs exceed $60
million, Copper Fox's 25% of these costs will reduced by an
equivalent amount from the remaining two cash payments payable to
Copper Fox. Teck will fund Copper Fox's pro-rata 25% share of any
additional costs incurred prior to a production decision, if
required, by way of loan without dilution to Copper Fox's 25% joint
venture interest;
- Teck has agreed to use all reasonable commercial efforts to
arrange project equity and debt financing for project capital costs
of constructing a mining operation upon a production decision being
made; Teck has agreed to fund Copper Fox's pro rata share of
project capital costs by way of loan, if requested by Copper Fox,
without dilution to Copper Fox's 25% joint venture interest.
Copper Fox's Interest in the Liard
Shares
Copper Fox beneficially owns 21.07% of Liard Copper Mines Ltd
('Liard') shares. Liard holds a 30% net proceeds interest in
the Schaft Creek property.
Schaft Creek Joint Venture Drilling Program
The 2013 drilling program at the Schaft Creek Joint Venture is
underway. Teck as operator of the Schaft Creek Joint Venture
currently has four diamond drills working on the Schaft Creek
deposit. The 2013 program is aimed at increasing the value of
the Schaft Creek project. The objective of the drill program
is to test the extension to the east of the mineralization in the
Paramount Zone and to collect additional geotechnical information
for ongoing pit slope stability studies.
Corporate Activities
On formation of the Schaft Creek Joint Venture with Teck, Teck
assumed operatorship of the Schaft Creek project resulting in a
reduced level of activity at Schaft Creek for Copper Fox. The
reduced level of activity at Schaft Creek combined with other
corporate activities has resulted in the following highlights:
| a) |
A tax free cash distribution of $0.0275/share as a return of
capital was declared to shareholders of record on Tuesday, August
20, 2013 (the 'Record Date'). In general terms, a return of
capital is not included in income by shareholders but does reduce
the cost of a share for income tax purposes. The ex-distribution
date for this distribution was Friday, August 16, 2013. The
distribution was paid to shareholders on Thursday August 29,
2013; |
| b) |
The Company's wholly-owned subsidiary has been named "Desert
Fox Copper Inc." and is the primary operating vehicle responsible
for acquisitions, and exploration and development activities; |
| c) |
The subsidiaries of Desert Fox have been renamed as follows:
Copper Fox Minerals Co. to Desert Fox Minerals Co., Copper Fox Van
Dyke Co. to Desert Fox Van Dyke Co. and Copper Fox Sombrero Butte
Co. to Desert Fox Sombrero Butte Co.; |
| c) |
Copper Fox management and personnel have now been assigned to
Desert Fox to support Desert Fox's new role as the primary
operating vehicle for the Company, re-aligning overhead and
providing savings and cost efficiencies; |
| d) |
Desert Fox has commenced activities on its Van Dyke and
Sombrero Butte copper projects located in Arizona. Activities
include compilation and review of over 6,000 boxes of core and
samples from 72 drill holes, diamond drilling, environmental and
geotechnical studies on the Van Dyke copper deposit and a surface
and geophysical exploration program on the Sombrero Butte copper
project; |
| e) |
Desert Fox intends to acquire and invest in advanced
polymetallic copper projects within North America to take advantage
of unprecedented current market value opportunities. |
Financial
During the nine months ended July 31,
2013 the Company received $4,318,000 in proceeds from private placements
and the exercise of options, received $23.93
million in relation to the Schaft Creek Joint Venture and
incurred an additional $3,183,463 of
capital expenditures related to the Schaft Creek project.
Selected Financial Results
| |
|
|
|
|
|
|
Net Loss |
Net (loss)/income per share
-
basic and diluted |
|
| 2013 |
|
|
|
|
| Third Quarter |
$ |
3,117,445 |
$ |
0.01 |
| Second Quarter |
$ |
(697,664) |
$ |
0.00 |
| First Quarter |
$ |
(525,595) |
$ |
0.00 |
| 2012 |
|
|
|
|
| Fourth Quarter |
$ |
(812,324) |
$ |
0.00 |
| Third Quarter |
$ |
(1,328,328) |
$ |
0.00 |
| Second Quarter |
$ |
(514,292) |
$ |
0.00 |
| First Quarter |
$ |
(554,254) |
$ |
0.00 |
| 2011 |
|
|
|
|
| Fourth Quarter |
$ |
(1,018,883) |
$ |
(0.01) |
Liquidity and Capital Resources
At July 31, 2013, the Company had
working capital of $25,448,521 and a
deficit of $15,328,349 and had net
income of $3,117,445 and $1,894,187 for the three and nine months ended
July 31, 2013.
About Copper Fox
Copper Fox is a Canadian resource development company listed on the
TSX-Venture Exchange (TSX-V: CUU) with offices in Calgary, Alberta and Vancouver, British Columbia.
Copper Fox holds a 25% interest in a joint
venture (the 'Schaft Creek Joint Venture') with Teck Resources
Limited ('Teck') on the Schaft Creek project in northwestern
British Columbia.
In addition to Copper Fox's interest in the
Schaft Creek Joint Venture, Copper Fox holds, through Desert Fox
Copper Inc. ('Desert Fox') and its wholly-owned subsidiaries,
mineral tenures located in Pinal County,
Arizona (the 'Sombrero Butte Copper Project') and in
Miami, Arizona (the 'Van Dyke
Copper Project').
On behalf of the Board of Directors
Elmer B. Stewart
President and 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 statements" and
"forward-looking information" (collectively, "forward-looking
information") within the meaning of applicable 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 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; financing to advance the Schaft Creek
project, including project equity and debt financing for projected
capital costs of construction of a mining operation; ongoing and
planned activities on the Van Dyke and Sombrero Butte projects,
including compilation and review of boxes of core and samples,
diamond drilling, environmental and geotechnical studies and
surface and geophysical exploration programs; the intention
of Desert Fox to acquire and invest in advanced polymetallic copper
projects within North America;
expected capital requirements to continue planned activities;
expected sources and the adequacy of required capital resources;
geological interpretations and potential mineral recovery
processes.
In connection with 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 Copper Fox and Desert
Fox's operations. 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 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; the possibility that future
obligations with respect to the Sombrero Butte property may not be
met on a timely basis, or at all; planned activities for the Van
Dyke and Sombrero Butte properties many not commence as currently
planned, or at all; current resources estimates may never be
obtained by the Company for the Van Dyke and Sombrero Butte
properties; fluctuations in metal prices and currency exchange
rates; conditions in the financial markets and overall economy may
continue to deteriorate; uncertainties relating to interpretation
of drill results and the geology, continuity and grade of mineral
deposits; uncertainty of the metallurgical testwork; the
uncertainty of the estimates of capital and operating costs,
recovery rates, and estimated economic return; the need to obtain
additional financing and uncertainty as to the availability and
terms of future financing; the possibility of delay in exploration
or development programs; and uncertainty of meeting anticipated
program milestones.
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.
SOURCE Copper Fox Metals Inc.