Copper Fox PEA for Schaft Creek porphyry puts development cost at US$2.7B

Copper Fox Metals  (TSXV: CUU; US-OTC: CPFXF) has released an updated preliminary economic assessment for the Schaft Creek copper-molybdenum-gold-silver deposits in northwestern British Columbia. Compared with a previous 2013 PEA, the study reduces the project’s initial capital cost by about 19% to US$2.7 billion. Schaft Creek is a joint venture of Teck Resources (TSX: TECK A and TECK B; NYSE: TECK), the 75% owner and operator, and 25% partner Copper Fox.

According to the study, Schaft Creek has an after-tax net present value of US$842.1 million and an internal rate of return of 12.9% (using an 8% discount rate). The project has a life of 21 years during which time 5 billion lb. of copper, 3.7 million oz. of gold, 226 million lb. of molybdenum, and 16.4 million oz. of silver will be recovered.

Preproduction capital costs are estimated at US$2.7 billion and sustaining capital at US$848.7 million (including US$154 million in mine closing costs). All-in sustaining costs in years two through five will be US$0.72 per lb. payable copper, rising to US$1.18 per lb. over the life of the mine.

The new PEA includes several key changes from the technical study done in 2013. The updated mine plan reduces the stripping ratio to 1:1 from 2.16:1. The life-of-mine average operating cost per tonne milled is cut to US$8.66 per tonne from US$13.25 per tonne. The mill has been relocated closer to the proposed pit, and the tailings management facility (TMF) has been moved closer to the mill. Embankments at the TMF have been reduced to two from three, and the waste rock storage areas to two from three.

The mine would be a conventional truck and shovel operation. Mining would begin in an area of high grade material, transitioning after five years to lower grade material. The final phase of the pit will end in mineralization.

The nominal milling rate would be 133,000 tonnes per day at 92% capacity. Throughput would vary from 48.5 million to 51.5 million tonnes annually, reflecting the grinding characteristics of the ore. Grinding would include SAG milling, ball milling and pebble crushing, followed by bulk rougher-scavenger flotation, regrinding and cleaning. The bulk concentrate would be separated to produce a copper concentrate with precious metals and a separate molybdenum concentrate.

Permitting, detailed engineering, equipment procurement, construction, and startup to full production are estimated to take five years.

In 2020, the Schaft Creek resource estimate included 1.35 million measured and indicated tonnes averaging 0.26% copper, 0.16 gram gold per tonne, 1.25 grams silver per tonne and 0.017% molybdenum, containing 7.8 million lb. copper, 7 million oz. gold, 54.25 million oz. silver, and 511,000 lb. molybdenum. The inferred resource was 334,000 tonnes at 0.17% copper, 0.11 gram gold per tonne, 0.84 gram silver per tonne and 0.013% molybdenum.