Elmer Stewart has worked in uranium, base metals, gold and copper in Canada and other countries around the world. During his 38-year career, Stewart worked in various senior management positions for private and publicly traded companies. Prior to getting involved in the copper space, Stewart worked in the gold sector and personally oversaw five gold mines that went into production.
In his current role as president and CEO of Copper Fox Metals Inc., however, Stewart has left the gold sector behind in favor of a mineral that continues to grow in demand and necessity. “I liked gold, but never really understood how people valued it as much as they did,” he says. “To me, copper is a bigger part of our society; society needs it, whether we like it or not. The necessity of copper going forward, for me, seemed to be a better investment.”
Global copper consumption is growing. The world population is increasing and with that should come increased demand and higher prices. Seeing this trend, many of the world’s largest mining companies are making unprecedented investments for their share of copper mining projects.
Since becoming the Calgary-based company’s president and CEO in 2009, Stewart has overseen the development of the Schaft Creek project and the acquisition of four other significant copper projects, three in the United States and one in Canada. Cooper Fox Metals was formed in 2001 and became a publicly traded company in 2005.
Although much of the world’s copper is mined internationally and imported from countries such as Chile, China and Peru, the company is dedicated solely to North American assets. This allows the junior exploration company to avoid the logistical, political and regulatory challenges involved with international projects, Stewart notes.
Creating a future
The company last year completed a preliminary economic assessment (PEA) of its Van Dyke project, a copper deposit located on 1,312 acres of land in Miami, Ariz. Copper Fox first drilled in the area in 2014 and has conditionally approved another 10,000 meters of drilling in 18 locations to increase the size and confidence in the resource.
The PEA indicated the project is expected to sell 456.9 million pounds of copper, an estimate Stewart considers to be conservative. The gross anticipated revenue from the Van Dyke site is US $1.37 billion over its anticipated 11-year lifespan. The company can expect a discounted post-tax NPV of US $214 million based on an anticipated initial US $204 million capital investment to bring the mine into production. Recovery of the initial capital investment is expected to take between two and three years, Stewart notes.
The company’s next step at Van Dyke is to commission a preliminary feasibility study, for which it is seeking either private equity help or industry participation to pay the anticipated US $16 million cost. The mine could potentially go into production in mid- to late 2019. “We’re actively in discussion to fund that study,” Stewart says. “We’re not just sitting around waiting for something to happen; we want to create our own future.”
In addition to the Van Dyke project, which is 100 percent owned by the company, Copper Fox has operating or non-operating interests in three other projects: Schaft Creek, a joint venture with Teck Resources Ltd. located in northwestern British Columbia; Eaglehead, also located in northwestern British Columbia; and Sombrero Butte, located 44 miles northeast of Tucson, Ariz. The company this year announced its development of a Laramide porphyry copper project in the Mineral Mountain area of central Arizona.
All of the company’s projects require close partnerships with drilling providers, engineering companies, communities and native residents including First Nations communities in British Columbia, among others. “Our greatest strength is our people and our consultants,” Stewart says. “If we don’t know the answers ourselves, we know where to find them.”
Copper Fox intends to maintain its portfolio of projects moving forward, with an eye toward ultimately selling one or all of its assets. Copper Fox’s expertise is exploring and developing copper projects to the point where it is necessary to bring in an industry partner with the financial and operating expertise required to continue development of the project. The company’s strategy is to, after conducting in-depth due diligence, acquire under explored projects, advance the exploration and development of the project with the requirements of the target audience in mind. The key is to package the assets properly and know when to approach the producers.
“We have an excellent property portfolio. Our projects are at various stages, from exploration to post-feasibility study,” Stewart says. “We don’t believe in having just one asset.”