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Copper Fox to Fund Exploration on Eaglehead Copper-Molybdenum-Gold-Silver Property in Northern British Columbia

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Copper Fox to Fund Exploration on Eaglehead Copper-Molybdenum-Gold-Silver Property in Northern British Columbia

 

 

 

 

 

Copper Fox Metals Inc. (TSX-V:CUU) is pleased to announce that it has, through its wholly owned subsidiary Desert Fox Copper Inc. entered into a Subscription Agreement with Carmax Mining Corp. (TSX-V: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 will be subscribed for at a price of $0.05 per Unit and will consist of one previously unissued common share of Carmax and one common share purchase 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. and dated June 29, 2012. The Qualified Persons 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” 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 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 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.

Posted April 10, 2014

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