Copper Fox Metals: Spotlight on Strategic Partnerships & Arizona ISR Copper

HoldCo Markets
Jun 18
26 min read

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

We are initiating coverage of Copper Fox Metals Inc. (CUU) and establishing a C$0.60 per share, 12-month price objective. With an exclusive North American focus and at attractive valuations versus peers, we find that the company has the perfect mix of advanced stage copper development projects (potentially nearing the PFS level), along with more junior projects strategically located near established deposits and projects. The remainder of 2025 and into 2026 will be catalyst heavy for Copper Fox. Given that Teck Resources Ltd. (TECK) has already committed C$15.8M to drilling at Schaft Creek this year, management has made the choice to focus on its Arizona based projects. A PFS decision is expected over the remainder of this year for both Van Dyke and Schaft Creek. We find the timing to be perfect to advance ISR projects in Arizona given the recent positive developments surrounding SX/EW peer projects such as Florence, Gunnison and Cactus. On a lower LT copper price as used in the 2020 PEA, Van Dyke held its own compared to peer projects. We think the risk is on the upside should a new drilling campaign begin, along with an up to date PFS. 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 0.11x P/NAV valuation and at an EV of C$0.02 per booked CuEq lbs. Our price objective equates to upside of +125% from the most recent close.

COMPANY OVERVIEW

Copper Fox Metals was incorporated in 2004, with the Schaft Creek project being amalgamated into the company in 2005. The corporate portfolio expanded in 2012 when the company signed a purchase agreement for the Van Dyke ISR project and for the Sombrero Butte project (both located on Arizona). Mineral Mountain was added to the portfolio in 2015 while Eaglehead was added to the portfolio in 2021.

To date, the company boasts projects which encompass 3.00B lbs of copper in the M&I category and 2.34B lbs in the Inferred category (or 4.35B lbs CuEq M&I and 2.98B lbs CuEq in the Inferred category). Of the five portfolio projects, Van Dyke and Schaft Creek both have established Preliminary Economic Assessments while Eaglehead has an established NI43-101 compliant Mineral Resource Estimate. Numerous other factors and near-term drivers bolster our positive conviction of the company while also setting the company apart from peers:

Established JV with Teck Resources Ltd: With drilling and various technical studies currently underway at Schaft Creek as part of Teck’s C$15.8M planned 2025 expenditure, Teck (as 75% JV partner and operator) is expected to decide towards the end of the year whether or not to advance the project to the PFS stage. As per JV agreement, Copper Fox will not need to deploy any cashflow into Schaft Creek until production.
ISR Exposure at Van Dyke: In light of positive SX/EW copper project developments in Arizona – most recently from Florence (Taseko Mines), Gunnison (Gunnison Copper) and Cactus (Arizona Sonoran), additional work programs at the Van Dyke project are expected in the months ahead. Pending certain hydrogeological, mineralogical and solubility studies, a decision to advance the project to the PFS level (and with it an upcoming drilling program) is expected later this year.
Meaningful Size & Growth Potential: To date, the company boasts projects which encompass 3.00B lbs of copper in the M&I category and 2.34B lbs in the Inferred category (or 4.35B lbs CuEq M&I and 2.98B lbs CuEq in the Inferred category). Of the five portfolio projects, Van Dyke and Schaft Creek both have established Preliminary Economic Assessments while Eaglehead has an established NI43-101 compliant Mineral Resource Estimate. Though still at early stages, meaningful resource expansion potential is seen at all three additional portfolio projects.
Current Valuation: Despite the corporate partnerships, the advanced stage projects and the billions of Cu lbs booked as resource, the company is still largely unknown and as such has low liquidity. Given the most recent close, shares of Copper Fox trade at attractive levels versus peers: at a 0.11x P/NAV valuation and at an EV of C$0.02 per booked CuEq lbs.
Catalyst Heavy 2025/2026: PFS decisions are expected in the months ahead at both Schaft Creek and Van Dyke. We see the potential (or likelihood) for Teck to eventually buy Copper Fox’s 25% stake in Schaft Creek in order to consolidate its property. A Van Dyke, a decision to advance to the PFS level will trigger a large scale drilling campaign which we believe can materially extend the resource life and corresponding project economics.
Management Track Record: Led by President & CEO Elmer Stewart, current management has been instrumental with advancing and acquiring all the current portfolio assets.

VAN DYKE

Located in the Globe-Miami mining district in Gila County in east-central Arizona, the wholly-owned Van Dyke Project consists of 26 patented parcels of mineral estate lands and 35 unpatented lode mining claims. The Van Dyke project consists of 531.5 hectares (1,312.8 acres) of mineral rights and 5.75 hectares (14.02 acres) of surface rights. The Van Dyke project is primarily located within the town limits of Miami, Arizona. Sewer, water, communications, and powerlines are currently present on the property. The Project is located approximately 110km east of Phoenix. Notable porphyry copper deposits lying within a 10km radius of Van Dyke include Miami-East, Old Dominion and Copper cities (all BHP), Carlota (KGHM), Pinto Valley (Capstone Copper) and Miami-Inspiration (Freeport-McMoRan).

The first drill hole at Van Dyke was drilled in 1916. Between 1929-1931 and 1943-1943, a total of 11.85M lbs of copper was produced. By 1975, a total of 50 holes were drilled throughout the project area. Occidental initiated an in-situ leaching (ISL), or in-situ copper recovery (ISCR) pilot program in an area due west of the Van Dyke shaft in 1976. The pilot program was concluded the following year and determined that ISR copper recovery was viable for extracting copper from the deposit. Four different resource estimates were completed during the 1970s - based on 34 drill holes, historical resource estimates produced ranges from 103.0M tons averaging 0.53% Cu to 140.9M tons averaging 0.40% Cu. The historical resource is as follows:

With drilling completed towards the end of 1975, not much happened on site afterwards. Approximately 4.0M lbs of copper cement was produced in the late 1980s however from the early 1990s until 2012, the Van Dyke property lay dormant once again. In 2012 Bell Copper Corporation purchased the property. Not long after that, in July 2012, Copper Fox signed a purchase agreement with Bell and another vendor to acquire a 100% interest in the Van Dyke Property (and the Sombrero Butte property as well). The acquisition cost amounted to $1.5M and C$0.5M and included the assumption of continuing obligations subject to certain amended terms and conditions including a 2.5% Net Smelter Return production royalty.

Geology & Mineralization

The Van Dyke Copper Project is in the Basin and Range province of east-central Arizona, and centrally within the Globe quadrangle. The Globe-Miami mining district is underlain by igneous, sedimentary, and metamorphic rocks of Precambrian, Paleozoic, Tertiary, and Quaternary age. The Van Dyke copper deposit is located within the Miami-Inspiration trend of deposits that includes five principal orebodies. The Van Dyke copper deposit lies to the east, and on the hangingwall side, of the Miami fault. The principal type of mineral deposit found to-date on the Van Dyke property is that of an enriched secondary or supergene copper deposit that is genetically and spatially tied to the well-known and well developed porphyry copper systems located adjacent to the Project and the hypogene mineralization beneath it. The deposit itself consists of an upper Oxide zone (primarily chrysocolla, malachite, azurite and native copper and 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 Van Dyke copper deposit has a drill-defined, north-easterly strike length of 1500m, a width of 1300m, and a thickness between 40m to over 230m. The deposit lies at a depth of 185m-625m. As can be seen in the exhibit below, the deposit (brown) lies in the downthrown hangingwall block of the Miami fault (red).

In 2014, Copper Fox completed a 6 diamond drillhole (PQ core diameter) drill program with an aggregate length of 3,211.7m. The holes were drilled across the Van Dyke copper deposit, covering a west-to-east distance of approximately 825m and a north-south distance of approximately 500m. The 2014 program also included 8 pressure leach tests, simulating in-situ conditions which allowed for an understanding of the copper recoveries, leach time, reagent consumption, deleterious elements in the pregnant leach solution (PLS). Additionally, baseline studies, hydrology studies, fluid mechanics, geochemical characterization of the lithologies surrounding the deposit and scoping level engineering studies were conducted to better understand the deposit. Note that prior to Copper Fox acquiring the Project in 2012, a total of 70 exploration holes and 16 ISL wells were drilled on the property.

Preliminary Economic Assessment: 2015, 2020

In 2015 Copper Fox completed an NI43-101 compliant Preliminary Economic Assessment on the Van Dyke Project (dated November 18, 2015). The PEA suggested that Van Dyke is a technically sound ISR copper project, utilizing underground access and conventional SX-EW recovery methods. Using a $3.00 per lb LT copper price and acid soluble copper recovery of 68%, given an estimated LOM of 11 years, a post-tax NPV8% of $149.5M was calculated, along with an after-tax IRR of 27.9%. These figures were estimated using an Inferred resource of 183M tonnes containing 1.33B lbs of copper at an average total copper grade of 0.33%.

A 2019 resampling program of drill core chips, rejects, and pulps from 38 historic drillholes located within the Van Dyke deposit added 2,193 new analyses for Total Copper (TCu), Acid Soluble Copper (ASCu) and Cyanide Soluble Copper (CNCu). This data, together with data collected from the company’s 2014 drill program and other historic drillhole data, was used to remodel the deposit using a Total Soluble Copper (TSCu) cut-off grade of 0.025%. An updated NI43-101 compliant resource estimate was released with an effective date of January 9, 2020. A significant portion of the Inferred resource from the 2015 estimate was able to be upgraded to the Indicated category (717M lbs grading 0.33% Cu) in the updated 2020 resource estimate.

Ultimately, the new data produced from the re-analysis of selected historical drill core and drill core pulps correlated strongly with the original values for total copper. The new acid soluble copper values however were consistently higher than the historical values. Copper Fox followed up the updated resource estimate with a corresponding updated PEA which had an effective date of December 30, 2020. The updated PEA envisioned a copper recovery circuit designed to establish a closed system related to fluid injection and recovery. The well holes are planned to be drilled in angled fan patterns from underground galleries and follow an approximate 5-spot pattern with four recovery wells surrounding a single injection well in a repeating pattern, with the average distance between injection and recovery wells designed to be 21m. An overall 76% Cu recovery (including Plant Efficiency of 95% and Pre-conditioning of the mineralized zone to ensure a high Sweep Efficiency) was used in the PEA. The injection/recovery model at Van Dyke along with proposed wellfield pattern is displayed below:

The updated PEA incorporated permeability enhancement to induce additional fracturing around each drillhole to achieve desired leach solution saturation via injection holes and well flow rates of PLS from recovery holes. The number of wells in the PEA is 1925 with ratio of recovery wells to injection wells slightly over 1:1. As per production, the processing plant receives pregnant leach solution (PLS) from the in-situ copper recovery (ISCR) leaching operation. The plant is expected to process between 580 to 3,900 m3/hr, averaging 2,800 m3/h (flowrate) PLS and produce year 85M lbs/year (38,555t/year) as LME grade copper cathode.

The solvent extraction (SX) circuit will consist of two extract stages and a single strip stage. In the electrowinning (EW) portion of the plant, copper-rich electrolyte will be circulated through electrowinning cells that will contain a series of anode and cathode plates. The electrolyte will be subjected to a direct current passing between anode and cathode plates and the copper ions will migrate from the solution to the cathode and be electrochemically reduced to form elemental copper sheets. The proposed SX/EW flowsheet is displayed below:

In terms of economics, the updated 2020 PEA used a LT copper price of $3.15 per lb and an increased LOM now totaling 17 years. The economic analysis includes allowances for capital, operating, sustaining, royalties, reclamation, and closure costs. The initial capital cost was estimated at $290.5M, compared to the $204.4M as estimated in the 2015 PEA. Given the parameters, the after-tax NPV and IRRs went from $149.5M and 27.9% in 2015 to $644.7M and 43.4% in 2020. Though from 2020, the PEA estimates are largely in line with some of the more advanced ISR projects in Arizona (mainly, Florence). Stressing conservatism, our estimates incorporate an element of inflation for construction, procurement, labor etc. Our higher cost estimates are somewhat offset by our LT copper forecast of $4.50 per lb.

In the years since the updated PEA, much work has continued at Van Dyke with the goal being to mitigate any potential operating issues by developing a better understanding of the deposit characteristics. That said, a geotechnical assessment of the planned decline was conducted, as was the initiation of hydrogeological monitoring, mineralogical and solubility studies and various other geotechnical and hydrogeological studies. As released last summer, the results from a geotechnical study pertaining to the development of a proposed decline (conducted by an international mining consulting firm) concluded that (among others):

The current drillhole data coverage will support the completion of a Pre-Feasibility Study (PFS)
The Geotechnical parameters of the Gila Conglomerate are generally consistent, and match expected ranges of the Gila Conglomerate in other parts of the Globe-Miami Mining District.
A preliminary assessment of the rock quality of the Gila Conglomerate suggests that excavation of the spiral decline utilizing a roadheader is viable.

Ultimately, data from the hydrogeological, mineralogical and solubility studies will be incorporated into a Conceptual Site Model (CSM) which will be a significant step towards preparation of an updated hydrogeological model for the project. Work on updating the CSM and the hydrogeological/groundwater data collection is currently being prepared by Stantec Consulting Services. The CSM will be updated as new data is received and made available.

If the decision is made to advance Van Dyke to the PFS stage, an additional drilling program will likely be planed for (the first drilling campaign post-PEA). Modeling has already indicated that the Van Dyke deposit has significant potential for resource expansion. The deposit remains open to the southwest where an approximate 1.5km long exploration target has already been identified.

HoldC Markets Van Dyke Estimates:

As per our estimates for Van Dyke, we acknowledge the inflationary environment which certainly since the 2020 PEA has increased materially. Cost inflation since the 2020 PEA will certainly impact everything from labor to procurement of materials to contracting. Its worth noting that using Taseko’s Florence ISR project as a guide (a Technical Report was published in 2023), we’ve seen that as construction has progressed, costs have been relatively accurate while timelines have not shifted - initial ISR production from Florence is still expected by Q4/2025. That said, we model a 16 year LOM operation at Van Dyke with a total of 1.05B lbs of copper being produced (average of 66M lbs Cu per year with peak production near 85M lbs per year). As per economics, we use a $4.50 per lb LT copper price and a $1.58 per lb C1 cash cost. Ultimately, estimating initial capex at $335M we calculate an after-tax NPV8% of $747.2M and an after-tax IRR of 34.6%. Our production and cost estimates, along with comparisons to the previous Van Dyke PEAs (2015 & 2020) are displayed below:

ARIZONA SX/EW COPPER RECOVERY; NOW THE FOCUS OF MUCH ATTENTION

Whether a heap leach project or ISR, as evidenced by Florence, Cactus and Gunnison/Johnson Camp, there has recently been numerous positive developments and project validations with those respective, Arizona-based projects.

In-Situ Recovery (ISR) mining is characterized as an entirely underground closed loop system consisting of fluid injection wells and recovery wells. Well holes are typically drilled in angled fan patterns from underground galleries and follow an approximate 5-spot pattern with four recovery wells surrounding a single injection well in a repeating pattern. In Van Dyke’s case, the average distance between injection and recovery wells is estimated to be ~21m.

Though copper ISR recovery is having its time in the spotlight just recently, we note that this very same method has been used for decades already for uranium recovery. Some of the largest uranium companies employ these very same recovery methods involving injection and recovery wells for some of their amenable uranium deposits located in the US (Cameco (CCJ), enCore Energy (EU), Ur-Energy (URG), among others) and Kazakhstan (Kazatomprom (KAP)). Whether uranium or copper, the process follows a very similar (and simple) playbook:

Step 1: Injection and recovery wells are drilled into the oxide zone where the ore is situated.
Step 2: Wells are concrete encased and sealed above the oxide zone to protect water quality.
Step 3: A lightly acidic solution (similar in pH to common household vinegar) is injected via injection wells into the oxide zone to dissolve copper minerals.
Step 4: Copper rich solution is pumped to surface through recovery wells for processing into pure copper cathode sheets.
Step 5: Observation wells are monitored continuously to ensure hydraulic control of fluids (closed loop system) is maintained at all times and water quality is protected.

Copper production by way of Solvent Extraction and Electrowinning (SX/EW) plant is nothing new in Arizona – similarly to Copper Fox’s proposed ISR Van Dyke project, Taseko Mines’ (TKO, TGB) Florence ISR project (located 145km from Van Dyke) is on track for large scale recovery (commercial ISR copper cathode production) expected in Q4/2025 as process facilities are nearing the end of construction. Note that a production test facility at Florence began operation in 2019. Other projects employing SX/EW production include Arizona Sonoran (ASCU) advancing its heap leach project at Cactus (located 145km from Van Dyke) and Gunnison Copper’s (GCU) Gunnison & Johnson projects (located 240km from Van Dyke).

We note that the SX/EW copper development companies mentioned above (and circled in Exhibit 12) have all re-rated higher as construction milestones have been met and/or financial partnerships have been signed. These recent re-rates have included milestone corporate events such as:

Taseko Mines (TKO): January 16, 2024 – Financing secured, earthworks and site prep pretty much completed. ISR construction set to begin. Guidance for Q4/2025 production. Shares +106% since.
Arizona Sonoran Copper (ASCU): January 9, 2025 - Hudbay Minerals (HBM) announced a C$19.9M strategic private placement. Shares +47% since.
Gunnison Copper (GCU): March 3, 2025 – Financial transaction with Nuton, a Rio Tinto (RIO) venture, for viability testing at Gunnison. Shares +50% since.

As can be seen in the exhibit above, Copper Fox shares have underperformed its SX/EW peer group over the past two years. Though progress is on-going at Van Dyke, we believe that this underperformance is largely due to the lack of game changing project announcements. This narrative can change however should the project advance to the PFS stage and with it, the resumption of drilling for potential resource expansion and further resource confirmation.

Ultimately, the respective SX/EW projects from the above mentioned companies stack well against each other. Taseko’s Florence has the head start seeing as a test ISR production facility was built early on in 2019. The company is maintaining its guidance for the start of full scale ISR production by year end. Looking at the various Technical reports, one metric we like looking at is LOM project value divided by initial capital intensity (essentially after-tax NPV / initial capex). As can be seen below, the SX/EW projects are higher than the underground projects in that department. Moreover, though Van Dyke ranks with a 2.2x ratio (below Florence’s 4.0x and Cactus’ 3.0x) we note that the economics from the Van Dyke PEA was driven by a relatively low $3.15 per lb LT copper price. This amount is considerably lower than Florence and Cactus – their respective reports used a LT price of $3.75 and $3.90 respectively.

SCHAFT CREEK

Located in northwestern British Columbia, Schaft Creek is a large copper-moly-gold porphyry deposit located approximately 60 km south of the village of Telegraph Creek, 120 km southwest of Dease Lake and 375 km northwest of Smithers, within Tahltan Territory. Access to the project is via helicopter from either Dease Lake or Smithers. The project is managed by the Schaft Creek JV. Formed in 2013, the JV involves Teck Resources (TECK) as operator at 75% and Copper Fox at 25%. The project itself covers ~60,000 hectares of mineral concessions located in Tahltan Territory. Notable mines and projects near Schaft Creek include Galore Creek (owned by TECK and Newmont Mining, 50:50) located 47 km to the southwest, Brucejack (owned by Newmont Mining (NEM)) and finally Iskut and KSM (both owned Seabridge Gold (SEA)).

The history of Schaft Creek dates back to 1957 when initial claims were staked. In the mid-1960s, a consortium of mining companies incorporated as Liard Copper Mines Ltd, shortly after in 1968, Liard entered into an option agreement with Hecla Mining Co. under which Hecla earned a 70% interest in the Liard property while Liard would retain a 30% carried NPI in the Liard property. Subsequently, Teck acquired a 78% interest in Liard which represented a 23.4% interest in the Liard property. Until the early 2000s, various other companies were somewhat involved with ownership, including Royal Gold Inc. given its acquisition of International Royalty Corp. In 2002, TECK signed an agreement with Guillermo Salazar which allowed Salazar to earn Teck’s 70% direct participating interest in the Liard property, by incurring certain exploration expenditures, along with TECK’s 23.4% indirect carried interest in the Liard property provided completion of a bankable Feasibility Study. Copper Fox earned 100% of Teck’s interest in the project, subject to Teck’s back-in right for up to 75%. Salazar’s option agreement was amalgamated into Copper Fox in 2005.

Copper Fox worked on the property culminating with the publication of a Preliminary Economic Assessment (PEA) in 2007, a Pre-Feasibility Study (PFS) in 2008 and then a Feasibility Study (FS) in 2012 (filed in 2013). In July 2013 Teck and Copper Fox entered into an agreement for the Schaft Creek JV whereby Teck holds a 75% interest and operatorship in the project while Copper Fox holds a 25% interest. Ultimately, the Schaft Creek JV dictates that Teck will be providing all funding until actual production. This means that Copper Fox wil not be relied upon for any cash flow or dilution until production.

Schaft Creek Mineralization

Mineralization at Schaft Creek has been described in terms of three separate zones: the Liard zone, the Paramount zone and the West Breccia zone. The Schaft Creek deposit has been characterized by workers as a calc-alkaline Cu-Mo-Au porphyry deposit. The deposit itself is situated within a 12km long trend of mineralization which straddles between intrusive rocks of the batholith and the adjacent volcanic host rocks.

Preliminary Economic Assessment: 2021

The 2012 Feasibility Study was estimated given a total of 449 holes drilled on the property, totaling approximately 108,041m. Specifically, 197 holes (41,524m) were drilled by Copper Fox between 2005-2012. Much of this work included the re-sampling and re-logging of historical holes drilled between 1956-1981. After the Feasibility Study was filed in 2013, a total of 14 holes (6,087m) were drilled on the property. The 2015 drilling campaign focused on the LaCasse zone, an area located 3km to the northwest of the Schaft Creek deposit area and characterized by a zone containing outcropping chaclcopytite-pyrite mineralization associated with hydrothermal-intrusive breccias and sheeted quartz veins. A resource estimate for Schaft Creek was estimated in January 2021 within a conceptual constraining pit shell.

Based on the above resource estimate, a 21-year LOM mining operation was estimated producing a total of 5.0B lbs of copper (Cu), 3.7M ounces of gold (Au), 226M lbs of molybdenum (Mo) and 16.4M ounces of silver (Ag). Project economics were estimated using LT base case pricing of $3.25 per lb Cu, $1,500 per ounce Au and $10 per lb Mo. Factoring in a C1 cash cost of $1.00 per lb and pre-production capital of $2.65B (including indirect costs and a 28% contingency), an after-tax NPV8% of $842M, along with an after-tax IRR of 12.9% was calculated. Of note are the corresponding commodity sensitivities:

Copper: A $0.25 per lb increase in Cu results in a $240M increase in after-tax NPV. At $4.25/lb Cu the implied after-tax NPV would increase to $1.8B ($842 + $960 = $1.8B) based on Cu alone
Gold: A $100 per ounce increase in Au results in a $80M increase in after-tax NPV. At $2,200/oz Au the implied after-tax NPV would increase to $1.4B ($842 + $560 = $1.4B) based on Au alone
Molybdenum: A $1.00 per lb increase in Mo results in a $40M increase in after-tax NPV. At $25.00/lb Mo the implied after-tax NPV would increase to $1.4B ($842 + $600 = $1.4B) based on Mo alone

Recent Drilling Work

A total of six geotechnical drill holes totaling 2,472m were drilled in 2024 by Teck. Three of the six holes intersected significant intervals of porphyry style mineralization and extended the mineralization in the Paramount zone approximately 250 m to the north. As announced in January 2025, highlights included:

DDH SCK-24-471: intersected a core interval of 134.60m (21.60 to 156.20m) that averaged 0.338% copper, 0.037% molybdenum, 0.058 g/t gold and 0.78 g/t silver that included a 63.80m core interval (59.20 to 123.00m) that averaged 0.437% copper, 0.066% molybdenum, 0.050 g/t gold and 1.11 g/t silver.
DDH SCK-24-472: intersected a core interval of 208.64m (406.10 to 614.74m) that averaged 0.253% copper, 0.014% molybdenum, 0.115 g/t gold and 0.88 g/t silver.
DDH SCK-24-476: intersected a core interval of 202.60m (189.70 to 392.30m) that averaged 0.324% copper, 0.023% molybdenum, 0.044 g/t gold and 1.68 g/t silver that included a 14.40m core interval (196.80 to 211.20m) that averaged 0.634% copper, 0.104% molybdenum, 0.092 g/t gold and 3.48 g/t silver.

These latest six drill holes follow the ten holes (3,288m) drilled on site in 2023. Recall that cumulative expenditures by Teck from 2013 until December 2024 has been approximately C$98M. Last year alone, Teck spent C$24.7M. Over the course of this year, Teck has earmarked C$15.8M for Schaft Creek as the project transitions from the scoping phase to the Prefeasibility Stage.

Schaft Creek – Located in Gold/Copper Elephant Country (the “Golden Triangle”)

Galore Creek, KSM and Brucejack are major mines and/or projects all located in close proximity to Schaft Creek. Newmont’s Brucejack operation is one of the highest grade gold mines in the world and a core property for Newmont. In operation since 2017, Brucejack is expected to produce 255,000 gold ounces in FY/2025. As per gold/copper projects, Seabridge Gold’s KSM Project is considered to be one of the world’s largest undeveloped gold and copper projects given it’s estimated 47.3M ounces of gold and 7.3B lbs of copper in the Proven & Probable (2022 PFS). Lastly, TECK/Newmont’s nearby Galore Creek Project has a resource estimate of 12.2B lbs of copper and 9.4M ounces of gold. Schaft Creek is located just 47 km northeast of the Galore Creek property.

As part for Teck’s C$15.8M program for Schaft Creek (entirely funded by Teck), a metallurgical testwork program is currently underway as are updates to the resource, geologic, structural and slope stability models. We believe that once Teck decides to move the project to the PFS stage, it will then be a matter of time before Teck consolidates 100% of Schaft Creek. The PFS decision may come by year-end.

EAGLEHEAD

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.

Mineral exploration on the Eaglehead project primarily took place during three periods: from discovery in 1963 to 1965, from 1970 to 1982, and from 2005 to 2018. Diamond drilling completed on the Eaglehead project from 2006-2015 totaled 24,362.5m in 67 holes. The drilling targeted the Far East, East, Bornite and Pass zones, and intersected broad intervals of copper mineralization, some of which are accompanied by significant concentrations of molybdenum gold-silver, including: 551.08m averaging 0.23% Cu, 0.013% Mo, 0.060 g/t Au, and 0.9 g/t Ag in hole 121 drilled in the East zone (NI43-101 MRE, August 21, 2023). In 2022, Copper Fox completed a field program consisting of re-logging 34 historical drill holes, sampling 20 mineralized intervals in 11 drill holes, re-analyzing 270 sample pulps and undertaking the review of 54 historical drill holes. From 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).

The deposit itself was found to consist of four distinct mineralized zones as described below:

East and Bornite: These zones are underlain by porphyritic biotite granodiorite intruding quartz porphyry and hornblende quartz diorite. The mineralization outcrops below the glacial overburden and is open at depth and both across and along strike.
Pass and Camp: These zones are underlain by porphyritic biotite granodiorite and quartz porphyry intruded by generally thin, 2m-5m crowded quartz feldspar and quartz feldspar porphyry dikes. In general, these zones were drill tested by shallow drilling (~150m vertical) with only two drill holes located on the south side of the Pass zone extending to significant depth (~500m).

Note as well that preliminary metallurgical test work yielded 89.9% Cu, 71.1% Mo, 78.6% Au and 78.1% Ag in three stages of cleaner flotation testing.

MINERAL MOUNTAIN

Located in Arizona, just 25km east of Florence, Mineral Mountain is a drill ready Laramide age, porphyry copper project located in the Mineral Mountain Mining District. A Plan of Operations to conduct a proposed four hole 2,500m maiden drilling program has been approved by the Bureau of Land Management (BLM). The wholly-owned project consists of two Arizona Mineral Exploration Permits and 260 BLM mining claims covering approximately 2,633.8 ha (6,508.2 acres).

Located in the heart of the action for copper mining in Arizona, the project sits within a northeast trending porphyry copper belt that hosts some of the largest porphyry copper deposits in Arizona including Santa Cruz and Resolution. The project is located approximately 25km southwest from Rio Tinto and BHP’s giant Resolution porphyry copper-molybdenum deposit and approximately 25km northeast of Taseko’s Florence porphyry copper deposit. The 2023 geophysical survey mapped the depth of the chargeability and resisitivity signatures underlying the copper ‘footprint’ identified in previous mapping programs. The survey outlined an open-ended northeast trending 3,200m long by 1,200m wide positive (>18mrad) chargeability/resisitivity anomaly within which three areas of higher chargeability occur designated Targets 1, 2 & 3.

The porphyry footprint measures approximately 3,500m long by 1,000m wide and is characterized by a copper-magnetite (now hematite) association with enhanced gold-molybdenum concentration hosted in phyllic (sericite-chlorite) and potassic altered porphyritic granodiorite and quartz monzonite. In February 2024, Copper Fox submitted a Plan of Operations to the BLM to complete a four hole (2,500m) drilling program to test Targets 1 and 2. The approval for the Plan of Operations was received on May 23, 2025. Operations under the plan will be able to commence once the BLM accepts a suitable reclamation bond.

SOMBRERO BUTTE

The Sombrero Butte Project is a 100% owned, early-stage porphyry copper exploration target located in the Bunker Hill Mining District, Pinal County, Arizona, approximately 3km south of Faraday Copper’s Copper Creek porphyry copper project, a development-stage asset with a large copper resource and a robust PEA (see Exhibit 14). Sombrero Butte shares a nearly identical geological setting to Copper Creek, including Laramide age multiphase intrusives, widespread breccia pipe hosted mineralization (with over 120 pipes mapped) and similar structural controls. Historical drilling has encompassed 34 drill holes totaling 6,435m with a highlight from DDH SB-07-14 which intersected 1.15% Cu over an 86m core interval starting from surface.

Copper Fox has been involved with Sombrero Butte since 2012. Following the final option payment in 2021, Copper Fox has held a 100% working interest in the project. During 2024 and early 2025, Copper Fox focused on evaluating the porphyry copper potential of the project. The program included mapping, alteration and geochemical data and geophysical surveys. The program defined a large, highly evolved, deep, porphyry copper target.

CONCLUSION

Though still relatively under the radar, there is so much to like with Copper Fox’s North American focused portfolio with projects boasting both exploration upside and near term development catalysts. Whether it’s an advanced stage ISR project in Arizona (Van Dyke) or a near PFS level, long-lived copper-moly-gold porphyry deposit (Schaft Creek), the meaningful catalysts will be many over the next 12 months. Overall, not many companies can boast a portfolio consisting of 3.0B lbs Cu in the M&I category (or 4.3B CuEq) along with 2.3B lbs Cu in the inferred category (or 3.0B CuEq). At essentially C$0.03- C$0.03 on an EV/resource basis (CU and CuEq), Copper Fox trades considerably lower than the average C$0.22-C$0.14 from North American development peers.

Though we acknowledge that various PEAs and PFS’ from peer projects have been conducted at different periods while utilizing different LT copper prices for analysis, both Van Dyke and Schaft Creek hold their own when compared to peer projects in the Americas on both a volume of production standpoint and on an after-tax IRR basis (among others).

We find it hard to find another company with a similar type quality portfolio trading at similar valuation metrics. Moreover, given the Schaft Creek JV with Teck Resources, we’d be hard pressed to find another junior company with similar such ties to one of the major global copper miners. Far from being a dormant partner, Teck has been actively spending $98M since 2013 on the Schaft Creek property. We see a consolidation of the property a likely eventuality.

VALUATION & SENSITIVITIES

We initiate coverage of Copper Fox while establishing a C$0.60 per share price objective. Driven by a $4.50 per lb LT copper forecast, we use a NAV8% DCF derived price objective for Van Dyke. A mine plan, capital costs and operating cost assumptions are estimated and applied in our DCF model. Estimates and assumptions are based on published technical reports and/or peer projects. Our pro-rata valuation for Schaft Creek is based on the 2021 Preiminary Economic Assessment.

Given the most recent close, shares of Copper Fox trade at attractive levels versus peers: at a 0.11x P/NAV valuation and at an EV of C$0.02 per booked CuEq lbs. Our price objective equates to upside of +125% from the most recent close.

NEAR-TERM TIMELINE & POTENTIAL CATALYSTS

On-going: Surface sampling, mapping and permitting.
2H/2025: PFS decision at Van Dyke. If positive a large scale drilling campaign may commence as well.
2H/2025: Further drilling at Schaft Creek given Teck’s committed C$15.8M budget for the year.
2025/2026: PFS decision at Schaft Creek

OWNERSHIP

Management, insiders and Board members own a combined ~59.8% of the issued & outstanding Copper Fox shares. The balance is largely held by retail investors.

APPENDIX 1 – MANAGEMENT & BOARD

President, Chief Executive Officer & Board Member – Elmer B. Stewart, P.Geol, MSc. Mr. Stewart has over 45 years of domestic and international experience in mining and exploration for gold, uranium, base metals and copper. During his career, Elmer has been involved in the financing, acquisition and exploration of base metal and gold projects as well as the development and construction of two underground mines and the construction and operation of three open pit gold mines. Elmer was instrumental in diversifying the Company’s project portfolio throughout North America, led the 2013 Feasibility Study on the Schaft Creek project and was directly involved with negotiating the Schaft Creek Joint Venture Agreement with Teck Resources Limited. Elmer negotiated the acquisition of the Van Dyke and Sombrero Butte projects and supervised the work to advance the Van Dyke project from an exploration to a development stage project. More recently, Elmer recognized the mineral potential of the area comprising the Mineral Mountain project and negotiated the acquisition of the Eaglehead porphyry copper project. In 2020 and 2021 Elmer led the Preliminary Economic Assessments of the Van Dyke and Schaft Creek projects that resulted in substantial increased project valuations on both projects.

Chief Financial Officer – Mark T. Brown, CPA, CA. Mr. Brown is the President of Pacific Opportunity Capital Ltd., headquartered in Vancouver, British Columbia. Pacific Opportunity is a financial consulting and merchant banking firm active in venture capital markets in North America. Mark brings over 25 years of executive management experience in the mining sector to the Company. His corporate activities include merger and acquisition transactions, financing, strategic corporate planning, and corporate development. Mark received a Bachelor of Commerce Degree from the University of British Columbia in 1990 and is a member of the Institute of Chartered Accountants of British Columbia. Mark is an officer and director of a number of public and private companies.

VP Corporate Affairs – Lynn Ball. Mrs. Ball has been involved in the mineral exploration industry since joining Copper Fox Metals in 2005 providing a variety of administrative and corporate support. Lynn reports directly to the CEO and CFO of the Company and her experience includes management of corporate and financial reporting requirements, maintaining the projects mineral tenures, engaging with project stakeholders as well as ensuring there are strong ESG policies in place. Lynn also assists with investor relations.

Board of Directors – R. Hector Mackay-Dunn, KC. Mr. MacKay-Dunn is a Senior Partner at Farris LLP with 30+ years of experience providing advice to high-growth public and private companies and public institutions, over a broad range of industry sectors including life sciences, technology, health, mining and clean tech. Hector has extensive experience in advising on corporate domestic & cross-border public & private securities offerings, M&A, international partnering & licensing transactions, and to boards of directors and independent board committees on corporate governance matters. Hector is recognized by Lexpert® as being among the Top 100 Canada/US Cross-Border Corporate Lawyers in Canada and Leading 500 Lawyers in Canada; by Best Lawyers as 2020 Lawyer of the Year in Biotech, 2021 M&A tech, and corporate & securities; Chambers Canada 2021.

Board of Directors – Ernesto Echavarria, CPA. Mr. Echavarria is a Certified Public Accountant and has extensive experience both at the executive and board levels of large corporations. Ernesto is a significant investor with several major corporations in Mexico and is a controlling shareholder, executive and director of Franks Distributing which is a major international distributor of fruit and vegetable produce, as well as being an investor and director of numerous other entities including mining companies.

Board of Directors – Mark Brown, CPA, CA. Mr. Brown is the President of Pacific Opportunity Capital Ltd., headquartered in Vancouver, British Columbia. Pacific Opportunity is a financial consulting and merchant banking firm active in venture capital markets in North America. Mark brings over 25 years of executive management experience in the mining sector to his role with the Company. His corporate activities include merger and acquisition transactions, financing, strategic corporate planning, and corporate development. Mark is an officer and director of a number of public and private companies.

Board of Directors – Manuel Gomez, CFA. Mr. Gomez holds a Bachelor of Accounting degree from Instituto Tecnologico y de Estudios Superiores de Monterrey, Mexico and an MBA from City University in Zurich, Switzerland. Mr. Gomez received his CFA in 1993 and during his career has held the positions of Fund Manager with United Bank of Switzerland (‘UBS’) and Senior Vice President with Credit Suisse Group. Mr. Gomez is a member of the Institute of Directors (London) and serves as a director in another public company.