Monday, February 4, 2013

Copper Fox Teck Decision in 30 Days?

BFS submitted
Teck's review to be completed by April
Financing period begins at the end of April
Long lead ordering to begin in June

Given that there are other things that require work the stated timelines indicate that the project is more advanced than is known. Part of the contract stipulates a JV has to be formed should Teck execute one of their back in options. The contract does stipulate 60 days after the BFS. However, it has been noted that the Liard royalty shares have not been transferred. This is a very important component to us.

Interestingly, the Economic Analysis was complete October 15, 2012! It is one of the last components of a BFS for obvious reasons. We also know Teck downloaded the database. This would have given them 4 months to come up with their own internal review.

As you read the document you will notice that a number of the items this author speculated about are true. At depth in certain locations we are seeing a big increase in the copper content. These specific locations are producing the mineral mix I said they would and if that continues to hold true this is going to be one hell of a deposit for decades to come.

A singular point to note. This deposit comes under 1 permit. One permit to rule them all as it were. That's a cost and time saver in was that are hard to understand for the layperson.

I can see why the negotiations have taken this long. The bare bones NR announcing a barely acceptable BFS pales in comparison to what's really there. I think CUU want's to drill. Ya, I know they keep saying they want to sell but I think we have a tougher negotiation without the assays. It's true that Teck has enough evidence to support a high price but you know my opinions on valuation.

Someone who shall not be named recently told me that Teck was buying us out and preparing to shelve the operation. They said price was a sticking point or this would already be a done deal. Once Teck owns it they can shelve it if the political scene is not suitable. The key is that they have to own it first.

If the political scene turns ugly and a deal is not struck then Teck has an uphill battle with Copper Fox. It's widely expected the NDP will take control and they will tax a number of mines out of business plus they intend to use environmental reviews to shut projects down. A quick survey of the headlines reveals what will come if they win. Considering that it's almost for certain this is coming I expect a deal will be struck shortly. Teck will have to fight for its portion. They will also have to take the political risk that comes with it too. Walking is not an option.

1 comment:

  1. In regards to the EA, Copper fox will submit in Q1 2013?
    In reviewing the FS, page 70 announces Q1, but on page 583 it says "expects to submit in Q2 or Q3 of 2012". This must be a typo
    Quarter 1 would be great for submitting the EA.