Email reply from Elmer
posted on Oct 01, 2021 11:24AM
CUU own 25% Schaft Creek: proven/probable min. reserves/940.8m tonnes = 0.27% copper, 0.19 g/t gold, 0.018% moly and 1.72 g/t silver containing: 5.6b lbs copper, 5.8m ounces gold, 363.5m lbs moly and 51.7m ounces silver; (Recoverable CuEq 0.46%)
q&a his reply in brackets.
How is it possible you could not get the PEA summary done for the AGM? (Not for lack of trying/number of groups involved in the approval process/ and the need to get the disclosure accurate).
Did you not want to share that as the results were not great? (Increasing the value from $US64 million in 2013 to US$842 million in 2021 is a substantial increase in value primarily due to the work completed by the SCJV.)
Is this why you’re so interested in more drilling now as the results were somewhat disappointing? (I am not disappointed in the results. As explained in news releases and at the AGM, the drilling is being completed to obtain samples for metallurgical test work with the objective to increase metal recoveries. Increased metal recoveries adds value/more metal sales/especially important in early years of project)
You want us to believe this was just a couple day miss? (Copper Fox with the help of all parties involved, worked hard to release the PEA results. People are allowed to believe what they want, I would hope that their belief is based on substance not supposition)
Was the delay on Teck’s sign off? (As indicated there were a number of independent parties involved in the preparation of the news release. Teck our 75% partner were very helpful in this process. As per the Joint Venture agreement, Teck our 75% partner has the right to review, comment and approve all disclosure prepared by Copper Fox related to the SCJV)
Why did you use $3.25 copper pricing? (conservative metal pricing pricing, Copper Fox’s decision. The tornado chart in the news release shows the the project valuation (after-tax, 100% basis) of a $US0.25/lb increase in copper price. Teck themselves are using $3.50 throughout any of their investor decks.
This left $100m annual cash flow out of the numbers. (The increase from US$3.25 to US$3.50/lb increased the after-tax discounted NPV value (100% basis) by US$250 million. The amount of the increase can easily be derived from the Tornado Chart)
Why did you not hold a management discussion on the PEA results? Can you? (Todd, I would be more than pleased to meet with you and discuss any questions, you may have regarding the Schaft Creek project/the SCJV or the other projects within Copper Fox. If you would like to meet, send an e-mail and we can arrange a time at your convenience)
This would be standard practice for major events such as this.
How the Liard shares and other royalties could be cleared up among other things (Teck is the Operator of the SCJV and dealing with Liard and other aspects of the project is their responsibility pursuant to the Joint Venture agreement. In exercising their responsibility, Teck does involve Copper Fox in discussions, but with a 75% interest, reality is, Teck controls the project) .
This is how you properly communicate with shareholders and potential investors. I am assuming you’re interested in attracting new money?
Teck will never pay what we’re worth unless you get our share price moving (if or when Copper Fox enters a sales process for its 25% interest in the Schaft Creek project, it would be based on project valuation. To arrive at this valuation Copper Fox would retain independent groups, knowledgeable in such matters to advise on the valuation/fairness)
Have you even updated our website? (in preparation, we have a few maps to update for several projects)
How hard is it to put up a Twitter post? Hire a student, you need to do some heavy promoting. $2500 a month is not adequate. (I guess we have different opinions on that)
Did you sit in on Teck’s investor day? Read the deck? Have you questioned Teck why after spending many millions on SC they have not changed their information on SC over what 10 years? (Yes, I did listen to the first part of the presentation, i have read the deck. I cannot speak for Teck)
They are still calling it a Scoping Study (The industry sometime use Scoping Study/Preliminary Economic Assessment inter changeably. Regulators use the term PEA for this level of independent study).
Why? And why have you not asked them why they continue to not tell the truth about SC? (What is it about SC that you think Teck are not telling. I would be interested in getting your input on that comment. The data used in the PEA was substantially generated by the SCJV, the resource model used in the PEA was generated by Copper Fox/Tetra Tech, reviewed by a number of Independent professionals, results/conclusions/recommendation provided)
The PEA summary was out the day before their Investors Day but nothing said. (Teck are under no obligation to discuss a report prepared by Copper Fox. In addition, I would be interested in what you thoughts on Schaft Creek)
You would be the only ones suggesting they are a good partner. (You are right I did express my opinion, and it still stands, you do not have to agree with me.)
How have you not had discussions about your interest in selling our 25% to Teck? (At what price? Ernesto made clear at the AGM the interest is for sale at fair value. The project enhancements indicate a strong possibility of adding significant value, what is your rationale for entering a sale process now.)
Ernesto said ‘Teck is moving fast’ what did he mean? ( I cannot speak for Ernesto. You could have asked him that at the AGM)
You see our share price tank after the agm and continuing? That is your loyal shareholders throwing in the towel with no hope of actually seeing any liquidity events and lost all confidence in mgmt. (It appears that some shareholders were disappointed with the information provided at the AGM, in the PEA valuation, other have a different opinion)
It’s really sad we have supported you with our hard earned money, bought into pp’s, believed what you told us for many years yet nothing you ever commit to or say comes through, and this is how we are treated. (Copper Fox discloses material news when completed. Copper Fox has been working with Teck to increase the value of Schaft Creek and the current PEA demonstrated significant increase in value with the possibility to add significant more value. I cannot predict in advance the outcome of a individual study or peoples reaction to news releases. If a shareholder decides to sell their shares or the results are not what was expected, it is the shareholders decision what to do)
To suggest you have no formal plan on liquidating assets other than we need to spend more money and drilling with no defined timeframes and the board has to meet again to make some plan? (Not sure where you are coming from on this comment. I assume, based on a comment you made above that you attended the AGM, if so you must have heard Ernesto comment on the disposition of the 25% Interest in the Schaft Creek project)
This years AGM was particularly deflating with nothing from you giving us any hope.(if adding significant value at Van Dyke and Schaft Creek, moving exploration projects to the drilling stage, acquiring a well mineralized porphyry project in BC is not sufficient for you then not sure what you/shareholders are looking for.)
It’s like your paycheque every two weeks is more important than selling an asset. (Really)
I know you have more shares than I but your actions don’t support what you say. (Yes, I might own more shares that you? The insiders hold approximately 60% of the shares and have heavily supported the company over the past few years. Actually, the strategy of the company as defined by the board has been implemented with success. Add value get the projects to fair value territory. It appears that you do not agree with this strategy)
Or is it you don’t have the experience or contacts to open a discussion with a major about our asset? Then go hire someone. (We added depth to the management team with the addition of Mark Brown. As indicated above, our major shareholder has publicly stated that when Schaft Creek reaches fair value territory it would be put up for sale which would entail engaging independent third party groups when/where necessary to commence/complete a sale process.)
You can’t put all hope in Teck’s hands (Not sure where you got that idea, nothing could be further from the truth. Teck is the operator of Schaft Creek, they own 75% and spending their money)
it’s your job to be out there promoting us and attracting other majors, this should already be happening with the US assets ( I have set out the strategy of the board and our major shareholders on valuation/timing of asset sale. The same applies to the Van Dyke project.)
So why aren’t you?
Assuming we can sell an asset to finance further exploration of another.(?)
This is a multi year story, what is the succession plan? who is the future of CF? (Based on what was stated above, two possibilities, sell assets individually or put the entire company up for sale. Depending on that decision, then a succession plan may have to be implemented.)