Introduction
In 2013, Desert Fox Van Dyke Co., a wholly owned subsidiary of Copper Fox Metals Inc., purchased a 100% working interest in the Van Dyke copper project, a brownfield advanced stage in-situ copper recovery (‘ISCR’) project located in the prolific Globe-Miami porphyry copper mining district. The Project covers 531.5 hectares (1,312.8 acres) of mineral rights. Historical copper production from underground mining between 1929 and 1945 produced 11.8 million (‘M’) pounds (‘lb’) at a reported average grade of 5.0% copper. Between 1988-1989, 4 Mlbs of copper was recovered utilizing ICSR methods. Arizona is a favorable mining jurisdiction with respect to taxation, regulation, infrastructure, and labour.
2020 PEA
In January 2021, Copper Fox filed an independent Preliminary Economic Assessment (‘PEA’) prepared in accordance with National Instrument 43-101 (‘NI 43-101’) on the Van Dyke ISCR project (click for report). The PEA was prepared under the direction of Moose Mountain Technical Services with an effective date of December 30, 2020. The effective date of the mineral resource used in the PEA is January 9, 2020. Metal Price Assumptions: Cu US$3.15/lb.
Highlights
- Pre-tax Net Present Value (‘NPV’) 7.5% of US$798.6 M, Internal Rate of Return (‘IRR’) of 48.4% and payback period of 2.0 years
- After-tax NPV 7.5% of US$644.7 M, IRR of 43.4% and payback period of 2.1 years
- EBITDA of US$1.8 billion (‘B’) Life of Mine (‘LOM’)
- Free Cash Flow of US$1.4 B LOM
- 17-year mine life producing approximately 1.1 Blbs of copper
- Initial Capital Cost of US$290.5 M including 30% contingency
- Operating Costs of US$0.71/lb
- Sustaining Costs of US$0.07/lb
- C1 Cash Costs of US$0.98/lb
- All in Sustaining Costs of US$1.14/lb
The results of the PEA are preliminary in nature. The PEA includes a combination of indicated and inferred mineral resources which are considered too speculative geologically to have the economic considerations applied that would enable them to be categorized as mineral reserves. There is no certainty that the PEA forecasts will be realized or that any of the resources will ever be upgraded to reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
PEA Recommendations
The PEA recommended the Van Dyke project proceed with a Preliminary Feasibility Study (PFS), contemplating a budget of US$15.5 M. Activities include diamond drilling to upgrade existing indicated and inferred resources to a higher resource classification, collection of hydrogeological and other data sets, and complete an ISCR pilot leach test program designed to further investigate metal recoveries, connectivity between wells, and refine the well field design.
2020 Mineral Resource Estimate
In May 2020, Copper Fox filed an NI 43-101 Technical Report which included the results of an updated mineral resource for the Van Dyke ISCR project (click for report). The study established for the first time an indicated mineral resource, an increase in overall tonnage and a substantial increase in copper metal. Modelling indicated that the Van Dyke deposit has significant potential for resource expansion, the deposit is open to the southwest where an approximate 1.5 km long exploration target has been identified.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Van Dyke Deposit
The Van Dyke oxide copper deposit is the result of a weather/oxidization/supergene enrichment process of a porphyry copper deposit emplaced in the Globe-Miami mining district approximately 60 Ma ago. The ‘leach cap’ overlying the deposit is characterized by variable concentrations of clay, hematite, limonite, jarosite, and geothite, and typically contains less than 100 parts per million (‘ppm’) copper. The Van Dyke copper deposit consists of three distinctive mineralogical zones, an upper Oxide zone (primarily chrysocolla, malachite, azurite and native copper (possibly cuprite)) underlain by a Transition zone (primarily chalcocite with lesser malachite and chrysocolla) underlain by the primary Sulphide zone (primarily chalcopyrite with lesser concentrations of chalcocite and bornite). The mineralization is mainly (95%) hosted in the PreCambrian Pinal Schist and in late-stage porphyritic dikes related to the Schultz granite. The simple geology and the mineralogy of the Van Dyke copper deposit are considered positive aspects for extraction of copper utilizing ISCR methodology.
2023 Program
The 2023 program is a staged, multi-purpose, capital effective approach to advance the Van Dyke project to the PFS stage. Planned activities include mineral solubility/mineralogical testwork, geotechnical studies of the Gila conglomerate and rehabilitation of selected historical drillholes.
Mineral Solubility Testwork
The mineral solubility/mineralogical testwork (65 samples) was completed to better understand the dissolution rates of the various copper minerals, inform mineralogical limitations on copper recoveries and the mineralogical variability across the Van Dyke deposit.
The samples represent various acid soluble copper and cyanide soluble copper grade classes from the Oxide and Transitional zones of the Van Dyke deposit. The sampling was restricted to the Phase I mine plan set out in the 221 PEA . The results of the leaching testwork showing copper recovery and final PLS copper grades at the end of the 72-hour leach period are tabulated below.
| Grade Range | Total Copper Rec (%) | Final PLS (g Cu/l) | ||||
|---|---|---|---|---|---|---|
| TCu% | Min | Max | Average | Min | Max | Average |
| <0.10 | 8.6 | 74.7 | 38.3 | 0.19 | 0.85 | 0.46 |
| 0.10-0.30 | 14.1 | 87.3 | 51.7 | 0.41 | 2.17 | 1.20 |
| 0.30-0.50 | 25.6 | 94.3 | 66.9 | 2.65 | 3.68 | 2.84 |
| >0.50 | 66.3 | 96.3 | 81.3 | 3.76 | 15.30 | 7.75 |
Copper recovery by mineralogical zone and copper species at various grade range are tabulated below.
| Mineral | Grade | Average | Total Cu | ASCu | CNCu |
|---|---|---|---|---|---|
| Zone | Range (Cu %) | TCu % | Rec % | Rec % | Rec % |
| Oxide | <0.10 | 0.066 | 58.6 | 79.0 | 0 |
| 0.1-0.3 | 0.173 | 50.6 | 73.8 | 13.5 | |
| 0.3-0.5 | 0.386 | 68.6 | 84.7 | 35.7 | |
| 0.5-1.0 | 0.631 | 75.6 | 85.8 | 29.3 | |
| >1.0 | 1.520 | 83.9 | 90.6 | 53.8 | |
| Transitional | <0.10 | ns | ns | ns | ns |
| 0.1-0.3 | 0.150 | 41.8 | 70.8 | 11.1 | |
| 0.3-0.5 | 0.443 | 18.7 | 48.7 | 11.7 | |
| 0.5-1.0 | 0.723 | 25.7 | 53.2 | 32.2 | |
| >1.0 | 1.280 | 42.7 | 74.4 | 22.9 |
Notes: TCu=total copper content in sample; PLS=pregnant leach solution; g Cu/l=grams of copper contained in 1 litre of PLS; ASCu=acid soluble copper;CNCu=syanide soluble copper; ns=no samples
The testwork indicated that on a weighted average basis, 63% of the TCu was recovered from the Oxide and 33.3% of the TCu was recovered from the Transitional zone within the 72-hour leach period. As well, 80.7% of the ASCu was recovered from the Oxide zone and 62.4% of the ASCu was recovered fromthe Transitional zone. The CNCu recovery from the Oxide zone averaged 20.3% and 13.9% from the Transitional zone. It is expected that a significant portion of the ASCu remaining in the Oxide and Transitional zones could be recovered over the longer leach period typical in ISCR operations.
The final PLS grades for the various copper grade bins based on the 72-hour leach period are positive and do not represent the expected average PLS copper grade over the life of mine for the Van Dyke project. For comparison the PLS grade over the life of mine at the Florence ISCR project is expected to be in the order of 1.7 g Cu/l.
Geotechnical Study
The development of the Van Dyke copper project contemplates access by way of a decline to a depth of approximately 30-50 meters above the Gila Conglomerate/leachcap contact and advancing an underground ramp in the Gila Conglomerate above the leach cap overlying the Van Dyke deposit. The geotechnical program has commenced and consists of logging of the Gila Conglomerate in six drillholes to collect geomechanical and structural orientation data for ground support analysis and decline and ramp design, identity potential areas of concern and to assist with geotechnical domaining and evaluate ground support requirements. Previously collected acoustic televiewer data from the six drillholes will be reviewed to support the geochemical data. On completion of the planned testing program, a data gap evaluation will be completed for all available geotechnical and hydrogeological data from the Van Dyke project to determine if additional data is needed to support a PFS level study. The geotechnical work program is being completed by Call & Nicholas Inc.
Drillhole Rehabilitation
The preliminary work related to the drillhole rehabilitation program resulted in three drillholes being selected for additional pumping tests. The additional testwork is expected to provide information on the suitability for these holes to install downhole hydrogeological monitoring equipment. These drillholes if completed are also expected to act as water quality sampling stations. The final phase of the drillhole rehabilitation program is expected to commence in early 2024 primarily due to access to service providers. If established, these monitoring stations would be the first in a series of monitoring stations to be established across the Van Dyke project to study the hydrogeological regime of the Van Dyke deposit.
Regulatory and Community Outreach
Copper Fox has established an outreach program that encompasses the communities within a 40-mile radius around Miami, Arizona. The Company has contact with the Arizona Department of Environmental Quality (ADEQ) and the Environmental Protection Agency (EPA) to discuss requirements to meet the threshold to enter a permitting process should the Company decide to do so.
Archeological Study
An archeological assessment of the infrastructure and facitilies related to the history of the Van Dyke mine site was completed in 2014. The study recommended that all features associated with the early years of mining at the Van Dyke mine and Mr. Cleve Van Dyke should be considered eligible for listing in the National Register of Historic Places (NRHP) for their association with the history of mining and cultural activities in the Miami area. The other features on the Van Dyke mine parcel are considered ineligible for listing in the NRHP because they are of uncertain age and association or they are too recent or they lack sufficient integrity or are considered to have no prehistoric or historic-period archaeological potential.
The study recommended that future development of the Van Dyke mine parcel should avoid the features recommended as NRHP eligible. If avoidance is not possible, a treatment plan for the mitigation of advers effect be prepared.
Biological Evaluation
A Biological Evaluation (BE) of certain parts of the Van Dyke project was completed to provide a screening and effects anlysis to determine the potential of special-status species or their critical habitat to occur within the project area and to evaluate project effects related to future activities. For the purposes of the BE, special-status species are defined as species designated by the US Fish and Wildlife Service (USFWS) as Endangered or Threatened under the Endangered Species Act (ESA) and species projected under the Bald and Golden Eagle Protection Act (BGEPA). Highlights of the BE are:
- Of the six ESA listed special-status species evaluated, four have no potential to occur, and two are unlikely to occur
- Of the two BGEPA listed special-status species evaluated, one has no potential to occur, and one has an unlikely potential to occur
- None of the special-status species evaluated have the potential to be adversely affected by the Project
- There is no designated critical habitat within the Project area
Effects Analysis
An Effects Analysis for direct and indirect impacts to special-status species from project activities concluded that increases in noise and vibration levels from construction activities would be temporary and in keeping with existing noise effects in the Miami-Globe area.
Dust Fugitive
The potential effects of Fugitive Dust related to project activities on wildlife and vegetation are not expected to be sustantially different from current conditions within the Miami-Globe area.
Noise and Vibration Noise
Noise and Vibration Noise levels from surface disturbance and construction are anticipated to increase in areas surrounding these activities. Increases in noise and vibration levels from construction would be temporary and are not expected to result from construction activities over the long term.
Surface Disturbance
Surface Disturbance resulting from clearing for site infrastructure will remove any actual or potential wildlife habitat within the Project area. Disturbance would result in the loss of some vegetation that may provide suitable wildlife habitat.