Copper Fox Metals (CVE:CUU) Monday announced it will buy the Van Dyke copper deposit, and Sombrero Butte copper project from Bell Copper (CVE:BCU) for $2 million in cash.
Under the terms of the deal, Copper Fox will acquire 100 per cent of
Bell Copper's interests in the Van Dyke copper deposit in Miami, Arizona
and the Sombrero Butte property located in Pinal County, Arizona for
the cash payment, and will assume Bell Copper's continuing obligations
in respect of the properties.
"The proposed acquisitions are ‘strategic’ for Copper Fox which if
verified expands Copper Fox's resource base separate from the large
Schaft Creek copper-gold-molybdenum-silver deposit and provides the
company advanced projects located in the two major copper producing
districts in Arizona," said president Elmer B. Stewart.
"The acquisition of these projects provides Copper Fox corporate
flexibility as it completes the feasibility study on the Schaft Creek
The Sombrero Butte property is subject to an option agreement for a
100 per cent interest in the property by making cash payments of
US$60,000 in January 2013 and US$650,000 in January 2014.
Encumbrances to the original vendors of the Van Dyke property
consists of total cash payments of $2.5 million, with $0.5 million of
this included in the $C2 million purchase price at closing, and the
balance allocated equally over the subsequent eight years.
Copper Fox said the annual payments are prepayments against a 2.5 per
cent net smelter return (NSR) production royalty, and will be deducted
from the amounts owing under the royalty, once production from the Van
Dyke property is started.
Two per cent of the NSR may be purchased for a period of three years by the payment of US$1.5 million for each 1 per cent.
Highlights of the deal include a historical resource of 112 million
tonnes with an average grade of 0.52 per cent copper, estimated to
contain 1.2 billion pounds of copper at the Van Dyke deposit.
The company stressed that the estimate is historical in nature and cannot be relied upon.
Further features of the Van Dyke acquisition are that primary
sulphide copper mineralization occurs beneath and to the east of the
oxide mineralization, and a satellite porphyry area to the west of the
deposit revealed azurite - copper oxide mineralization.
Past metallurgical testwork also indicated copper recoveries of up to
80 per cent using hydrofracturing to improve fluid circulation.
Meanwhile, Copper Fox said that the Sombrero Butte property contains
several clusters of copper bearing breccia pipes, which elsewhere in the
district host economic deposits.
Twenty nine of 34 holes drilled to test eight breccia pipes
intersected significant intercepts of copper mineralization over core
intervals ranging from two metres to 72 metres with average copper
grades from 0.37 to 5.85 per cent.
The Sombrero Butte property consists of 2,887 acres, and contains at
least two main clusters of mineralized breccia pipes, believed to be
associated with one or more underlying porphyry copper systems.
Copper Fox is developing the Schaft Creek copper-gold-molybdenum-silver deposit located in northwest British Columbia, Canada.
The company is working on completing a feasibility study for the
project, one of the largest undeveloped copper, gold, molybdenum and
silver deposits in North America.
The feasibility study is being led by Tetra Tech Wardrop on a minimum 120,000 tonne per day open pit mine and is expected to be completed mid-late summer 2012.
In May, Copper Fox unveiled an updated resource estimate for the Schaft Creek deposit including the Paramount and Liard zones.
The combined measured and indicated resource was 1.23 billion tonnes
grading 0.26% copper, 0.017% molybdenum, 0.19 grams per tonne (g/t) gold
and 1.69 g/t silver containing 7.11 billion pounds copper, 455.3
million pounds molybdenum, 7.37 million ounces gold and 66.74 million
The inferred resource was 597.2 million tonnes grading 0.22% copper,
0.016% molybdenum, 0.17 g/t gold and 1.65 g/t silver containing 2.87
billion pounds copper, 206.3 million pounds molybdenum, 3.36 million
ounces gold and 31.60 million ounces silver.