Copper Fox reveals updated NI 43-101 resource at Schaft Creek, shares rally

Copper Fox Metals (CVE:CUU) Thursday unveiled its long-awaited updated NI 43-101 resource estimate for the Schaft Creek copper-gold-molybdenum-silver deposit, highlighting over 1.2 billion tonnes of measured and indicated resource, including silver content expected to have a “positive impact on the economics” of the deposit.
The company’s shares soared over 25 per cent on the back of the news that the results of the new estimate could potentially increase the overall magnitude of the Schaft Creek deposit – already one of the largest undeveloped copper, gold, molybdenum and silver deposits in North America, located in northwest British Columbia.
The resource estimate for the Schaft Creek deposit, using a base case 0.15% copper equivalent cut-off, includes 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 ounces silver in the measured and indicated category.
Additionally, Copper Fox reported that the inferred resource is comprised of 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.
The company noted that the resource estimate includes the silver content of mineralization in both the Paramount and Liard zones of the deposit.
"The measured and inferred resource categories, the total copper-molybdenum-gold-silver content and the fact that the deposit is still open in several directions (along strike) indicates a new dimension to the potential size of the Schaft Creek deposit," said president and CEO Elmer Stewart.
"Additional drilling will have to be completed to realize this potential and define the un-explored portions of the Schaft Creek deposit.
"It is noteworthy that the current measured and indicated resource exceeds 1.2 billion tonnes and incorporates the silver content which is expected to have a positive impact on the economics of the Schaft Creek deposit."
Stewart said that the important criteria in selecting a cut-off grade in a resource estimate is the average grade of the metals, tonnes and contained metal content.
The resource estimate shows substantial increases in both tonnes and copper-molybdenum-gold-silver content at both the 0.15% and 0.20% copper-equivalent (CuEq) levels of cut-off, he continued.
"Given the very minimal decrease in average grade for each metal, we have been able to select a 0.15% CuEq cut-off," said Stewart.
"The base case results will be used to complete the feasibility study for the Schaft Creek project, which is expected to be completed by mid to late summer 2012."
The latest resource report, prepared by California-based Tetra Tech, used a total of 286 drill holes with 16,501 composited (4 metre) drill hole intervals (approximately 65,843 metres) at the Schaft Creek deposit.
The new resource compares to the one released last summer, prepared by AMEC Americas, which indicated that at a 0.20% copper equivalent cut-off, the deposit held 1.01 billion tonnes, grading 0.27% copper, 0.017% molybdenum and 0.18 grams per tonne (g/t) of gold, for a total of 6.1 billion pounds of contained copper, 383 million pounds of molybdenum, and 5.8 million ounces of gold.
Inferred resources, at the same cut-off, were estimated in July 2011 at 283.6 million tonnes at a copper equivalent grade of 0.39%, containing a further 1.5 billion pounds of copper, 69 million pounds of molybdenum, and 1.3 million ounces of gold.
Calgary-based Copper Fox is a resource development company focused on the exploration and development of the Schaft Creek deposit.
The feasibility study for the project, also led by Tetra Tech, will be based on a minimum 120,000 tonnes per day (tpd) open pit mine. In 2008, the project was estimated to have a before tax net present value of $2.8 billion over a 23-year mine life, at an 8% discount rate.
Copper Fox holds title and a 100 per cent working interest in the 44,265.52-hectare Schaft Creek project.
This week, the company also said it had wrapped up a 2,500 line kilometre magnetic airborne survey, as well as announced the acquisition of more mineral tenures next to Schaft Creek.
The group of five mineral tenures is referred to as the Jay/Scotch group and has had a "considerable amount" of historical exploration completed, said the company.
The alteration and copper-gold-silver metal signature at Jay/Scotch show many similarities to the southern portion of the Paramount zone in the Schaft Creek deposit, Copper Fox reported.
With regards to exploration plans, the company said it intends to start diamond drilling sometime in early June on the discovery zone about 1,200 metres north of Schaft Creek to test the width and strike extent of mineralization.
Earlier this month, Copper Fox said the 2012 exploration program will focus on the regional evaluation and exploration of the project outside the limits of the Schaft Creek and is expected to cost approximately $10.0 million.
Drilling will be conducted in two phases: phase one consists of 5,000 metres of drilling to test the targets at the discovery zone, and phase two will consist of at least 5,000 metres to follow-up zones of mineralization intersected during phase one drilling.
Shares of Copper Fox were lately up 19.8 per cent at $1.21 Thursday early afternoon.