Copper Fox Metals: Plans for Sombrero Butte, Eaglehead and Schaft Creek Announced

DISCLAIMER: Any written content contained herein should be viewed strictly as analysis & opinion and not in any way as investment advice. Visitors to this site are encouraged to conduct their own due diligence. As a Research Spotlight product, HoldCo Markets has received financial compensation for the written content and analysis below. Please read the full disclaimer here: holdcomarkets.com/disclaimer

Copper Fox Metals announced development plans for the Sombrero Butte Copper Project, located in Arizona. Based on an updated exploration model, the preparation for a plan of operations for drilling is currently in the works. The model incorporates data from the 2024 geophysical and mapping programs along with trace element geochemistry and airborne magnetic and radiometric surveys. Additionally, development plans for the Eaglehead Copper Project were recently announced as well (July 16). Lastly, we note that drilling at Schaft Creek has already begun south of the Liard zone.

Over the years Copper Fox management has assembled five portfolio projects (two of which are in advanced stage, nearing a PFS decision) encompassing billions of copper lbs booked as resource. Though both Van Dyke and Schaft Creek remain as the flagship assets, as evidenced by the recent news, the other portfolio projects are hardly being ignored. Copper Fox Metals is still largely unknown and as such has low liquidity. Given the most recent close, shares of Copper Fox currently trade at a 0.10x P/NAV valuation, or at C$0.02 per booked CuEq lbs. We maintain our C$0.60 per share price objective.

PORTFOLIO PROJECTS MOVING FORWARD ON ALL FRONTS

Though both Van Dyke and Schaft Creek rightfully remain as the corporate flagship assets, as evidenced by the recent news, management is hardly ignoring the other quality portfolio projects. The model-driven plan of operation for Sombrero Butte will set the groundwork for a highly anticipated exploratory drill program. At Eaglehead, the DCIP survey will complete the geophysical coverage on the mineralized corridor which forms the basis of the current resource estimate. The survey at Eaglehead will specifically serve to better define the size of the mineralized envelope. Work on both projects are on-going now. We’re glad to see that work is advancing simultaneously on all projects as management has previously emphasized a systematic approach for all projects, all in an effort to advance and de-risk, while also in an effort to allocate capital efficiently.

PLAN OF OPERATIONS FOR SOMBRERO BUTTE

Given an updated exploration model, the preparation for a plan of operations for exploratory drilling will be undertaken. Note that the updated exploration model incorporates data from 2024 geophysical and mapping programs, petrographic, mineralogical, geochronological and alteration studies, whole rock and trace element geochemistry, SWIR and high resolution airborne magnetic and radiometric surveys, and available public data. The updated exploration model supports the presence of a large, highly evolved porphyry copper system overlain by a relatively thin veneer of phyllic-altered andesitic volcanics and volcaniclastic sediments of the Glory Hole formation. Recall that Faraday Copper’s (FDY) Copper Creek porphyry copper deposit and Copper Fox’s Sombrero Butte project are located in the historically productive Copper Creek-Bunker Hill mining district, which contains breccia-pipe-hosted and porphyry-style copper mineralization. The Copper Creek deposit is located approximately 3.0km north of the Sombrero Butte project.

The updated exploration model highlighted the following features typically seen in Laramide porphyry copper deposits in Arizona:

• The southern extension of the Copper Creek granodiorite consists primarily of porphyritic and non-porphyritic hornblende-biotite granodiorite and biotite granodiorite.

• The porphyry copper target and underlying 3,200 meter (m) long by 1,300m wide chargeability anomaly (>25 mrad) occupies the same structural setting as the Copper Creek porphyry copper deposit.

• Hypogene enrichment (i.e. bornite rimming chalcopyrite) of copper mineralization and magnetite rimming pyrite indicating several superimposed high temperature hydrothermal events.

• Multiple (120) breccia pipes including magmatic hydrothermal breccia containing high grade copper +/- molybdenum-gold-silver mineralization.

GEOPHYSICAL SURVEY FOR EAGLEHEAD

Dias Geophysical Ltd. was recently contracted to complete a 3D pole-dipole distributed DCIP survey. The planned survey, over approximately 6 sq km, completes the geophysical coverage of that portion of the mineralize corridor that hosts four closely spaced, open-ended deposits of porphyry copper mineralization which forms the basis for the current mineral resource estimate. Recall that there are four open-ended zones of porphyry style mineralization included in the current MRE are located along the apex of a partially defined continuous 6km long chargeability anomaly. As mentioned by management, the locations of the mineralized zones are a function of the historical drilling completed prior to the more current deep penetrating geophysical surveys that resulted in large portions of the updated chargeability anomaly being untested. The strong spatial correlation between the mineralization and the chargeability anomaly provides an opportunity to better define the size of the mineralized envelope and a crude indication as to the porphyry potential of the Eaglehead Project.   

Located close to Schaft Creek, the Eaglehead project is an advanced exploration stage polymetallic porphyry copper project comprised of eleven contiguous mineral claims that cover 15,712.9 hectares (15km2) of land in the Liard Mining Division, approximately 50 km east of Dease Lake in British Columbia, within Tahltan and Kaska territory. A 100% working interest in the property was acquired by Copper Fox in 2021 in exchange for $1.0M in various installments. The mineralized area at Eaglehead covers an area measuring 8km x 3km and contains four open-ended porphyry copper deposits, two areas of widespread mineralization and 173 additional copper showings.

The planned geophysical survey area is located to the north of the existing geophysical coverage and overlaps the northern edge of previous geophysical surveys to enable preparation of significantly longer, updated chargeability and resistivity signature profiles based on the previous and current geophysical data. Dias will carry out a rolling distributed array 3D survey in common voltage reference mode in which the DIAS32 receivers are deployed across several survey lines, and current injections are injected within the active array of receivers. The survey comprises of 5 receiver lines and 4 current injection lines.

From previous drilling at the East Zone, highlight intercepts included:

• DDH 82B: drilled from 30.48m to 374.90m (interval of 344.42m) returned 0.32% Cu, 0.052% Mo, 0.09 g/t Au and 1.479 g/t Ag.

• DDH 121: drilled from 96,00m to 254.00m (interval of 158.00m) returned 0.21% Cu, 0.003% Mo, tr g/t Au and tr g/t Ag and drilled from 306.00m to 551.08m (interval of 245.08m) returned 0.27% Cu, 0.025% Mo, 0.09 g/t Au and 1.35 g/t Ag.

Using 120 of the 126 drillholes completed on the project, in October 2023 a NI43-101 compliant technical Report was filed (with an effective date of August 21, 2023).  

SCHAFT CREEK DRILLING ALREADY UNDERWAY

The 2025 drilling program has commenced south of the Liard zone. The intent of the campaign is to collect data in an area proposed for rock storage. Moreover, coarse particle flotation testwork has been added to the geometallurgical studies, to better characterize the geometallurgical response from the Liard zone. With Teck Resources (TECK) as 75% owner and operator, the work is being completed by Teck at its facilities located in Trail, British Columbia under the direction of the metallurgical division of Teck. Upgrades to camp facilities are also underway, the installation of solar arrays for electrical power use is currently underway. Ultimately, the 2025 Schaft Creek program is designed to complete a field program consisting of drilling and geophysical surveys to further investigate the areas designated for the rock storage facility and to conduct archaeological and baseline environmental data collection.

CONCLUSION & VALUATION

We look forward to the additional data expected from the current campaigns at Sombrero Butte, Eaglehead and Schaft Creek. Moreover, for both Van Dyke and Schaft Creek, we look forward to a potential PFS decision in the near term. That said, we maintain our C$0.60 per share, 12-month price objective. Driven by a $4.50 per lb LT copper forecast, we use a NAV8% DCF derived price objective for Van Dyke.

Given the most recent close, shares of Copper Fox trade at attractive levels versus peers: at a 0.10x P/NAV valuation and at an EV of C$0.02 per booked CuEq lbs. Our price objective equates to upside of +140% from the most recent close. For more specific information on all the company assets, refer to our June 18, 2025 initiation of coverage piece.