THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED
STATES NEWSWIRES.
Copper Fox Metals Inc. ("Copper Fox" or the "Company") (TSX VENTURE:CUU) is
pleased to announce that it has, through its wholly owned subsidiary Desert Fox
Copper Inc. ("Desert Fox"), entered into a Subscription Agreement with Carmax
Mining Corp. ("Carmax") (TSX VENTURE:CMX), whereby Desert Fox will subscribe,
via a non-brokered private placement, for 20,000,000 units of Carmax for an
aggregate subscription price of $1,000,000. Units (each a "Unit") will be
subscribed for at a price of $0.05 per Unit and will consist of one previously
unissued common share ("Share") of Carmax and one common share purchase warrant
("Warrant"). The private placement is subject to the approval of the TSX Venture
Exchange and Carmax Shareholders. The private placement will close as soon as
practicable after such approvals are obtained, provided that they are obtained
on or before May 29, 2014.
In connection with the private placement, Carmax will grant Desert Fox certain
rights, including, but not limited to:
-- The right to nominate two members to the Board of Carmax at each annual
meeting of Carmax's shareholders;
-- The pre-emptive right to participate in any equity financing of Carmax,
so as to maintain its pro rata percentage shareholding in Carmax; and
-- The right to make top-up investments in Carmax, by way of future private
placements, so as to maintain its pro rata percentage shareholding in
Carmax.
The aforementioned rights are, however, subject to Desert Fox, Copper Fox and
their affiliates maintaining ownership of 20% of Carmax's issued and outstanding
common shares.
Each Warrant will be exercisable for a period of 24 months from the closing date
of the applicable private placement and will entitle the holder, on exercise, to
purchase one additional common share of Carmax at a price of $0.075 per share.
Under the subscription agreement with Desert Fox, Carmax has agreed to use the
proceeds of the private placement to carry out a field program on the Eaglehead
property this upcoming summer.
On June 29 2012, Carmax filed a National Instrument 43-101 - Standards for
Disclosure for Mineral Projects ("NI 43-101") technical report on SEDAR at
www.sedar.com entitled "Technical Report on the Eaglehead Cu-Mo-Au Project,
British Columbia, Canada", which was prepared by Roscoe Postle Associates Inc.
("RPA") and dated June 29, 2012 (the "Eaglehead Technical Report"). The
Qualified Persons (as defined under NI 43-101) who prepared the Eaglehead
Technical Report were Barry McDonough, P.Geo., and David W. Rennie P.Eng. The
results of the Eaglehead Technical Report were reported by Carmax in a news
release dated July 4, 2012 and entitled "Carmax files Technical Report for the
Eaglehead Pophyry Copper-Molybdenum Project on SEDAR" (the "News Release"), a
copy of which is available on SEDAR at www.sedar.com. Highlights of the
Eaglehead property and rationale for the investment in Carmax are as follows:
Highlights:
a. The Eaglehead property has a current Inferred Mineral Resource of 102.5
million tonnes at an average grade of 0.29% copper, 0.010% molybdenum
and 0.08g/t gold (containing 663 million pounds copper, 22.07 million
pounds molybdenum and 265,600 ounces gold within conceptual open pit
limits);
b. The mineralization on the Eaglehead property contains silver; the
content of which was not included in the resource estimate due to the
assay methodology;
c. The Inferred Mineral Resource is contained in two of the six zones of
mineralization identified to date on the Eaglehead property, all zones
of mineralization are open along strike and at depth;
d. The mineralization is characterized by strong, pervasive alteration,
quartz veining and consists of disseminated and veinlet chalcopyrite-
bornite-molybdenite and pyrite;
e. Alteration associated with the mineralization consists of pervasive
potassic, chlorite-sericite, sericite, propylitic alteration and
carbonate assemblages;
f. A number of the diamond drill holes intersected intervals of high-grade
copper mineralization with associated molybdenum-gold-silver
mineralization over significant intervals (see Table-3 below); and
g. The Eaglehead Technical Report, a copy of which is available on SEDAR at
www.sedar.com, provides detailed information about the Eaglehead
property.
Elmer B. Stewart, President and CEO of Copper Fox stated, "The investment in
Carmax provides Desert Fox exposure to a large, advanced
copper-molybdenum-gold-silver property in northern British Columbia. The number
of zones of mineralization located to date along with the
copper-gold-molybdenum-silver assemblage, host rock and alteration (including
carbonate alteration) suggests many similarities to the Schaft Creek
copper-gold-molybdenum-silver project also located in northern British Columbia.
The objectives of the 2014 exploration program consisting of geophysical
exploration and diamond drilling is to further define the extensions of the
known mineralized zones and to assess the potential of the un-explored portions
of the Eaglehead property. It is noteworthy that the characteristics of the
mineralization located to date are interpreted to represent the upper portion of
a porphyry system."
Rationale for Investment in Carmax:
1. Resource Estimate
The current mineral resource was estimated for two of the six zones of
mineralization located to date on the property using criteria consistent with
the CIM Definitions Standards for Mineral Resources and Mineral Reserves (2010)
and in conformity with CIM "Estimation of Mineral Resources and Mineral Reserves
Best Practice" (2003) guidelines. The numbers presented in the following table
have been rounded to reflect "Best Practice Principals" as established by the
CIM. The estimated current mineral resource used a 0.16% Cu Eq. cut-off grade
and are categorized and tabulated in Table-1.
Table-1: Mineral Resource Estimate - Eaglehead Project
Effective Date: May 14th, 2012
----------------------------------------------------------------------------
Zone Resource Copper Molybdenum Gold
Name Category Tonnes (%) (%) (g/t)
----------------------------------------------------------------------------
East Inferred 61,600,000 0.28 0.011 0.06
----------------------------------------------------------------------------
Bornite Inferred 40,900,000 0.32 0.008 0.11
----------------------------------------------------------------------------
Total Inferred 102,500,000 0.29 0.010 0.08
----------------------------------------------------------------------------
----------------------------------------------------
Contained Metal
------------------------------------
Zone Molybdenum Gold
Name Cu (Lbs) (Lbs) (ozs)
----------------------------------------------------
East 376,000,000 14,900,000 126,000
----------------------------------------------------
Bornite 287,000,000 7,170,000 139,600
----------------------------------------------------
Total 663,000,000 22,070,000 265,600
----------------------------------------------------
The current mineral resources are contained within two conceptual open pits, the
East and Bornite zones, and constitute approximately 69% of total mineralization
above the 0.16% CuEq grade cut-off.
Cautionary Note to Investors
While the term "inferred mineral resource" is recognized and required by NI
43-101, investors are cautioned that except for that portion of mineral
resources classified as mineral reserves, mineral resources do not have
demonstrated economic viability. Additionally, investors are cautioned that
inferred mineral resources have a high degree of uncertainty as to their
existence, as to whether they can be economically or legally mined, or will ever
be upgraded to a higher category. United States investors are advised that
current Mineral Resources are not current Mineral Reserves and do not have
demonstrated economic viability. Moreover, all mineral resource estimates and
other information about the Eaglehead property contained in this news release
have been derived from, and are qualified in their entirety by, the Eaglehead
Technical Report and the News Release, a copies of which are available on SEDAR
at www.sedar.com.
The mineral resource estimate was carried out using a block model constrained by
3D wireframe models of the principal mineralized domains. Grades for copper,
molybdenum, and gold were interpolated into the blocks using Inverse Distance to
the Third Power (ID3) weighting. The estimate was further constrained by a
Whittle pit shell, generated to demonstrate that the mineralized bodies have a
reasonable probability of economic extraction, as stipulated in NI 43-101 and
the CIM Definitions Standards for Mineral Resources and Mineral Reserves (2010).
The effective date of the estimate is May 14, 2012.
The 0.16% Cu Eq. cut-off was the minimum grade of copper equivalent estimated by
RPA to complete the Whittle pit shells for the mineralized zones using the
parameters set out in Table-2 below:
The following Table-2 sets out the parameters that were used by RPA to develop
the Whittle Pit shells for the two mineralized zones:
Table-2: Parameters used for Whittle Pit Shell Determination and Copper
Equivalent Grade
Metal Prices: Copper US$4.00 /lb; Molybdenum US$17.00 /lb; Gold US$1,500.00
/oz;
Costs: Mining US$2.00 /tonne; Processing/G&A US$10.00 /tonne
Pit Slopes: 45 degrees in bedrock; 30 degrees in Overburden
Metal Recoveries: Copper 80%; Molybdenum 80%; Gold 67%;
Some of the selected drill hole assays from the Eaglehead property are set out
in Table-3, below:
Table-3: Selected mineralized intervals from the Eaglehead Property:
----------------------------------------------------------------------------
From To Interval Copper Molybdenum Gold Silver
DDH ID Azimuth Dip (m) (m) (m) (%) (%) (g/t) (g/t)
----------------------------------------------------------------------------
DDH0099A 358.2 -63.9 167.0 243.0 76.0 0.34 0.004 0.024 1.57
Including 182.0 203.0 21.0 0.99 0.010 0.063 4.85
----------------------------------------------------------------------------
DDH0100 3.5 -49.9 21.0 519.0 498.0 0.21 0.006 0.031 16.65
Including 232.0 315.0 83.0 0.37 0.007 0.038 1.92
Including 269.0 304.0 35.0 0.57 0.015 0.078 2.72
----------------------------------------------------------------------------
DDH0111 359.4 -46.9 26.0 137.0 111.0 0.53 0.003 0.088 2.97
Including 63.0 98.0 35.0 1.27 0.003 0.161 6.62
----------------------------------------------------------------------------
DDH0112 2.2 -64.4 70.0 171.0 101.0 0.40 0.007 0.210 3.82
Including 71.0 92.0 21.0 0.72 0.009 0.602 6.45
Including 126.0 140.0 14.0 1.02 0.017 0.297 12.65
----------------------------------------------------------------------------
DDH0114 5.2 -61.8 130.0 295.0 165.0 0.53 0.028 0.278 2.28
Including 195.0 248.0 53.0 0.83 0.037 0.394 2.05
----------------------------------------------------------------------------
DDH0116 4.5 -54 135.0 318.4 183.4 0.32 0.013 0.231 1.12
Including 140.0 251.0 111.0 0.47 0.020 0.355 1.54
Including 188.0 215.0 27.0 0.61 0.018 1.194 2.73
----------------------------------------------------------------------------
Note: The above core intervals do not represent true widths to the mineralization
2. Logistics and Access
The Eaglehead property is located approximately 50 km east of Dease Lake,
British Columbia. The property is connected to Dease Lake by road access and
comprises 31 mineral claims covering a total area of approximately 11,410
hectares (ha) in the Liard Mining Division of British Columbia.
3. Style of Mineralization
The mineralization on the Eaglehead property is typical of porphyry Cu-Mo
systems within intermediate volcanic and granodioritic and monzonitic rocks.
Mineralization is contained in altered rocks, which are localized by geological
structures that exhibit quartz stockworks, hydrothermal brecciation and
disseminated and veinlet chalcopyrite-bornite and other sulphide minerals.
Elmer B. Stewart, MSc. P. Geol., President of Copper Fox, is the Company's
nominated Qualified Person pursuant to NI 43-101, Standards for Disclosure for
Mineral Projects, has reviewed the technical information disclosed in this news
release.
About Copper Fox
Copper Fox is a Canadian resource development company listed on the TSX-Venture
Exchange (TSX VENTURE:CUU) with offices in Calgary, Alberta and Miami, Arizona.
In addition to Copper Fox's 25% interest in the Schaft Creek Joint Venture,
Copper Fox holds, through Desert Fox and its wholly-owned subsidiaries, the
Sombrero Butte copper project in the Bunker Hill Mining District, Arizona and
the Van Dyke oxide copper project in the Globe-Miami Mining District, Arizona.
Desert Fox has opened an operations office in Miami, Arizona to advance the work
required on the Van Dyke copper project to a Preliminary Economic Assessment.
For further information on these projects, please refer to the Company's website
at www.copperfoxmetals.com.
On behalf of the Board of Directors
Elmer B. Stewart, President and Chief Executive Officer
All mineral resource estimates and other information about the Eaglehead
property contained in this news release have been derived from, and are
qualified in their entirety by, the Eaglehead Technical Report and the News
Release, copies of which are available on SEDAR at www.sedar.com.
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.
This news release does not constitute an offer to sell or a solicitation of an
offer to sell any of the securities in the United States. The securities have
not been and will not be registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") or any state securities laws and
may not be offered or sold within the United States or to U.S. Persons unless
registered under the U.S. Securities Act and applicable state securities laws or
an exemption from such registration is available.
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 includes, but is
not limited to, the investment to be made by Desert Fox in Carmax by way of a
non-brokered private placement of Units; the size of the investment to be made
in Carmax by Desert Fox; the proposed issuance and terms of the Units, Warrants
and Shares to be issued by Carmax to Desert Fox by way of a non-brokered private
placement; the grant to Desert Fox of certain nomination and anti-dilution
rights in connection with its investment in Carmax and the conditionality of
such rights; the use of the proceeds of the private placement to fund
exploration on the Eaglehead property; statements about the resource estimate
for the Eaglehead property deposit; potential existence and size of
mineralization within the Eaglehead property; estimated timing and amounts of
future expenditures and geological interpretations and potential mineral
recovery processes. Information concerning mineral 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.
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, and engineering, information that Copper
Fox has received is reliable, and is based upon practices and methodologies
which are consistent with industry standards. 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 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: approval of the TSX Venture
Exchange and/or Carmax shareholders may not be obtained for the private
placement to Desert Fox; investments in Carmax may not be paid in the quantum or
at the times expected, or at all; the actual mineralization in the Eaglehead
property deposit may not be as favorable as suggested by the resource estimate;
the possibility that future drilling and geophysical exploration on the
Eaglehead property may not occur on a timely basis, or at all; 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 the mineral deposit; 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; and 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Copper Fox Metals Inc.
Investor line
1-866-913-1910
Copper Fox Metals Inc.
Lynn Ball
1-604-689-5080
www.copperfoxmetals.com
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