DRAFT DR
COPPER FOX METALS TO ACQUIRE FROM BELL COPPER THE VAN DYKE COPPER DEPOSIT AND SOMBRERO BUTTE COPPER PROJECT IN ARIZONA
Vancouver, British Columbia ± July 9, 2012 . Mr. Elmer Stewart, Presid ent and CEO of Copper Fox Metals Inc. ³&RSSHU)R[´RUWKH³&RPSDQ\´ TSX-V: CUU) is pleased to announce that Copper Fox KDV HQWHUHG LQWR D ELQGLQJ RIIHU WR SXUFKDVH WKH ³2IIHU´ ZLWK %HOO &RSSHU &RUSoration ³%HOO Copper ´ ZKHUHE\ &RSSHU )R[ ZLOO DFTXLUH RI %HOO &RSSHU¶V LQWHUHVWV LQ WKH 9DQ '\NH copper deposit located in Miami, Arizona and the Sombrero Butte property located in Pinal County, $UL]RQD WRJHWKHUWKH³3URSHUWLHV´ Under the terms of the Offer; Copper Fox will acquire 100% of the Properties by paying to B ell Copper CDN$2,000,000 in cas h and assuming Bell Copper ¶s continuing obligations in respect of the Properties.
The Offer is subject to Bell Cop per completing the acquisition of the Van Dyke property pursuant to the terms of the purchase and sale and royalty agreement between Bell Resources (Nevada) Corporation, a wholly-owned subsidiary of Bell Copper, and Bennu Properties, LLC, Albert W. Fritz Jr. and Edith 6SHQFHU)ULW] FROOHFWLYHO\WKH³9HQGRUV´ LQFOXGLQJ payment by Bell Copper of US$500,000 in cash to the Vendors on closing (see the news release issued by Bell Copper on March 12, 2012). Completion of the purchase LV VXEMHFW WR DSSURYDO RI &RSSHU )R[¶V %RDUG RI 'LUHFWRUV and completion of legal and technical due diligence to the satisfaction of Copper Fox.
Highlights:
- a) A historical resource* of 112 million tons with an average grade of 0.52% copper (estimated to contain 1.2 billion pounds of copper) prepared by Occidental Minerals Corporation in 1973 is reported for the Van Dyke deposit,
- b) Primary sulphide copper mineralization occurs beneath and to the east of the oxide mineralization in the Van Dyke deposit,
- c) A satellite porphyry area to the west of the Van Dyke deposit where azurite (copper oxide mineralization) is reported to occur in outcrop over an area measuring 400m X 500 m,
- d) The Sombrero Butte property contains several clusters of copper bearing breccia pipes, which elsewhere in the district host economic deposits, and
- e) 29 of 34 holes drilled to test 8 breccia pipes intersected significant intercepts of copper mineralization over core intervals ranging from 2m to 72m and average copper grades ranging from 0.37% to 5.85%.
*The historical resource reported for the Van Dyke deposit is historical in nature and cannot be relied upon.
Copper Fox wishes to clarify that insu fficient work has been completed to verify the reported historical data and that no mineral resource occurs within the Van Dyke prop erty. The reported historical mineralized intersections have not been verified and the historical data has not been adequately reviewed by an independent Qualified Person and cannot and should not be relied upon.
0U6WHZDUW3UHVLGHQWRI&RSSHU)R[VWDWHG³7KHSURSRVHGDFTX LVLWLRQs are ³VWUDWHJLF´IRU&RSSHU)R[ ZKLFKLIYHULILHGH[SDQGV&RSSHU )R[¶VUHVRXUFHEDVHVHSDUDWHI URm the large Schaft Creek copper-goldmolybdenum-silver deposit and provides the Company advanced projects located in the two major copper producing districts in Arizona. The acquisition of these proje cts provides Copper Fox corporate flexibility as it completes the feasibility study on the Schaft Creek deposit´
Van Dyke Project:
The 1,100 acre Van Dyke project is lo cated in the Globe-Miami Mining district of Arizona at the town of Miami, 90 miles east of Phoenix , Arizona. The Van Dyke property was developed in the early 1900s when a shaft was sunk to a depth of 1,692 feet. The mine is reported to have produced 11.8 million pounds of copper between 1929 and 1945 from copper oxide mineralizatio n with a reported grade of 5.0 % copper. Between 1968 and 198 0 Occidental Minerals Corporation ³2FFLGHQWDO´ drilled 70 exploration holes (sixty-two of which encountered measureable copper miner alization) on the Van Dyke property of which 46 of these were used to estimate a historical resource of 112,000,000 tons at a grade of 0.52% copper. Occidental uses a polygonal method to complete the historical resource estimate.
Occidental also completed preliminary metallurgical testwork to determine if the copper mineralization in the Van Dyke deposit was amendable to in-situ leachi ng, with a pilot program of two 1,000 foot deep holes, 75 feet apart. The reports on the in-situ leaching metallurgical testwork indicated copper recoveries up to 80% using hydrofracturing to improve fluid circulation.
Encumbrances to the original vendo rs of the Van Dyke property consists of total cash payments of $2.5 million (with $0.5 million ((included in the $CDN2,000,000 purchase price)) at closing and the balance allocated equally over the subsequent eight years). T he annual payments are prepayments against a 2.5% 1HW6PHOWHU5HWXUQ ³165´ production royalty and will be deducted from the amounts owing under the royalty, upon initiation of production from the Van Dyke property. 2% of the NSR may be purchased for a period of three years by the payment of US$1.5 million for each 1% NSR purchased.
Sombrero Butte Property:
The Sombrero Butte property consists of 2,887 acres located in the Bunker Hill Mining District 44 miles northeast of Tucson, Arizona. The project is located 9 miles east of the San Manuel Mine (14 billion lbs &X DQG PLOHV VRXWK RI 5HGKDZN 5HVRXUFHV¶ &RSSHU &UHHN project (1.1 billion lbs Cu), and both Redhawk and Millrock Resources have recently conducted dr illing within 1 mile of the northern property boundary.
The Sombrero Butte property contains at least t wo main clusters of mineralized breccia pipes which elsewhere in the district overlie ass ociated porphyry copper systems. The mineralized breccia pipes are believed to be associated with one or more underlying porphyry copper systems. At least 25 breccia pipes were located in the Sombrero Butte area and between 2006 and 2008; 34 drillholes were completed to test 8 of the mineralized breccia pipes. The mineralization in these breccia pipes remains open at depth.
Some of the mineralized interval from the 34 holes completed are as follows: Breccia Pipe Drill Hole ID From (m) To (m) Interval (m) Copper (%)
Magma SB-02 286 334 48 1.06
Campstool SB-03 272 294 22 0.58
Sunset SB-05 18 40 22 4.74
Rattler SB-09 96 110 14 0.83
Audacious SB-14 20 86 66 1.45
Victor's SB-29 4 70 66 0.61
The mineralized intervals listed in the above table do not represent true widths.
Field work has also identified 12 breccia pipes exhibiting dickite in the altered breccia matrix. Dickite is an indicator mineral which forms under acidic and high temperature condi tions, and occurs in multiple porphyry copper deposits, including the nearby San Manuel mine.
These additional breccia pipes occur in a separate cluster located three kilometers further south covering an area of 1 kilometer by 1.6 kilometers. These breccias exhibit hydrothermal alteration (dickite) filling open spaces between angular breccia clasts and sheeted tourmaline-quartz veinlets.
The Sombrero Butte property is subject to an option agreement to earn a 100% interest in the property by making cash payments of US$60,000 in January 2013 and US$650,000 in January 2014.
Elmer B. Stewart, MSc. P. Geol., President of Copper Fox, is the Company¶VQRPLQDWHG4XDOLILHG3HUVRQ pursuant to National Instrument 43-101, Standards for Disclosure for Mineral Projects, has reviewed the technical information disclosed in this news release.
About Copper Fox
Copper Fox is a Canadian-based resou rce development company listed on the TSX Venture Exchange (TSX-V:CUU) with a corporate office in Calgary and an operations office in Vancouver and is involved in the exploration and developme nt of the Schaft Creek copper-gol d-molybdenum-silver deposit located in northwest British Columbia, Canada.
The Company is working on compl eting a feasibility study on the Schaft Creek mineral deposit, one of the largest undeveloped copp er, gold, molybdenum and silver deposits in North America. The feasibility study is being led by Tetra Tech Wardrop on a minimum 12 0,000 tpd open pit mine and is expected to be completed mid-late summer, 2012.
Copper Fox holds title and a 100% working interest in the Schaft Creek project consisting of 52,843.34 hectares (130,579 acres). Include GLQWKLVWRWDODUHWKH³6FKHGXOH$´PLQHUDOWHQXUHVRULJLQDOO\ FRQYH\HG to Copper Fox pursuant to the option agreement dated January 1, 2002 between Teck Resources Limited ³7HFN´ DQG &RSSHU )R[ WKH ³7HFN 2SWLRQ $JUHHPHQW´ ZKLFK FRQVLVW RI KHctares (20,594 acres). 7KH³6FKHGXOH$´PLQHUDOWHQXUHVDU HVXEMHFWWRD1HW3URI LWV,QWHUHVWKHOGE\5R\DO*ROG,QF D FDUULHG 1HW 3URFHHGV,QWHUHVW KHOG E\ /LDUG &RSSHU0LQHV /LPLWHG ³/LDUG´ DQG WRJHWKHU with the additional mineral tenures REWDLQHGE\&RSSHU)R[ZLWKLQWKH³$UHDRI,QWHUHVW´SURYLGHGI RULQ the Teck Option Agreement, an earn back op tion held by Teck. On compl etion of the feasibility study, &RSSHU)R[ZLOOHDUQ7HFN¶VLQWHUHVWLQ/LDUG 7HFN¶VHDUQEDFNRSWLRQWRDFTXL re either, 20%, 40% RU RI &RSSHU )R[¶V LQWHUHVW LQ WKH 6FKDIW &UHHN SURSHUW\ LV WULJJHUHG XSRQ GHOLYHU\ RI D SRVLWLYH feasibility study to Teck. Should Teck elect to exercise its option for 75%, Teck is required to fund subsequent property expenditures up to a total of 400% of those incurred by Copper Fox ($76.6 million to April 30, 2012) and arrange for proj ect financing, including the Copper Fox portion. For full details of WKH7HFNHDUQEDFNRSWLRQSOHDVHUHIHUWRWKH&RPSDQ\¶VZHEVLWHwww.copperfoxmetals.com.
7KH UHPDLQGHU RI &RSSHU )R[¶V UHJLVWHUHG LQWHUHVWV LQ PLQHUDO WHQXUHV LQ %ULWLVK &ROXPELD WRWDO hectares (109,984 acres). These interests have been acquired by Co pper Fox through mineral tenure acquisitions and mineral tenure purchase agreements subsequent to Cop per Fox entering into the Teck Option Agreement. Certain portions of these registered mineral tenures are subject to inclusion within the Schaft Creek project pursuan t to the term V RI WKH ³$UHD RI ,QWHUHVW´ SURYLVLRQV RI WKH 7HFN 2SWLRQ Agreement.
For additional information contact: Investor line 1-866-913-1910 or J. Michael Smith, EVP, at 1-604- 689-5080
On behalf of the Board of Directors
Elmer B. Stewart
President and Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services P rovider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsib ility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Information
7KLVQHZVUHOHDVHFRQWDLQV³IRUZDUG-ORRNLQJLQIRUPDWLRQ´ZLWKLQWKHP HDQLQJRIWKH&DQDGLDQVHFXULW LHVODZV)RUZDUG-looking LQIRUPDWLRQLVJHQHUDOO\LGHQWLIL DEOHE\XVHRIWKHZRUGV³EHOL HYHV´³PD\´³SODQV´³ZLOO´³DQWLFLSDWHV´ ³LQWHQGV´³EXGJHWV´ ³FRXOG´³HVWLPDWHV´³H[SHFWV´³IRUHFDVWV´³SURMHFWV´DQGVL PLODUH[SUHVVLRQVDQGWKHQHJDWLYHRIVXFKH[SUHVVLRQV)RUZ ardlooking information in this news release include statements about: historical resource estimates and results of metallurgical test work on the Van Dyke property and exploration dril ling results on the Sombrero Butte property, the completion of the feasibility VWXG\ IRU WKH 6FKDIW &UHHN SURMHFW HVWLPDWHG WLPLQJ DQG DPRXQWV RI IXWXUH H[SHQGLWXUHV DQG ³HDUQ-bDFN´ RSWLRQV JHRORJLFDO interpretations and potential mineral rec overy processes. There can be no assurance tha t the purchase of the Van Dyke and Sombrero Butte properties will be completed. Informat ion concerning mineral reserve and resource estimates also may be deemed to be forward-looking i nformation in that it reflects a prediction of th e 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: that the closing of the purchase will occur, that the geological, m etallurgical, 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 fina ncing of the Feasibility Study; and the anticipated analytical result s of the current drilling program. While Copper Fox considers these assumptions to be reasonabl e, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause &RSSHU )R[¶V DFWXDO UHVXOWV SHUIRUPDQFH RU DFKLHYHPHQWV WR EHPDWHULDOO\ GLfferent from any future results, performance or achievements expressed or implied by the forward-looking information cont ained herein. Known risk factors include, among others: the number of closing conditions that the purchase of the Van Dyke a nd Sombrero Butte properties are subject to, including, but not limited to , the satisfactory due diligence of Copper Fox and the approval of the TSX Venture Exchange; that investigation and verification may show that the historical estimate on the Van Dyke prop erty may not be accurate or exist at a ll; that the metallurgical testwork completed on leaching the coppe r mineralization reported to oc cur within the Van Dyke deposit may not be accurate; that the exploration drilling results from the Sombrero Butte property may not be related to an underlying porphyry system; that the feasibility study on the Schaft Creek project may not be completed within the contemplated time frame, or at all; the possibility that fu ture drilling on the Schaft Creek project may not oc cur on a timely basis, or at all; fluctua tions in copper and other commodity prices and currency exchange rates; uncertainties relati ng to interpretation of drill results and th e geology, continuity and grade of mineral deposits; uncertainty of estimat es 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 deve lopment programs or in construction projects and uncertainty of meeting anticipat ed program milestones; uncertainty as to timely availability of permits and other governmental approvals
A more complete discussion of t he 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 informat ion herein is qualified in its entirety by this cautionary st atement, and Copper Fox disclaims any obligation to revise or update any such forward-looking information or to publicly announce the r esult of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.