Monday, August 15, 2011 (Page 2)

Copper Fox Metals (Toronto: CUU)
The company recently updated the resource estimate for its huge Schaft Creek copper/gold deposit in northwestern British Columbia. The new estimate is focused on higher-grade portions of the deposit, and that is reflected in the boost to the average grade for the deposit.

The measured and indicated resource now stands at 1 billion tonnes at 0.46% copper equivalent (0.27% copper, 0.017% molybdenum, and 0.18 grams per tonne gold). Those figures add up to 6.1 billion pounds of copper, 383 million pounds of molybdenum and 5.8 million ounces of gold.

An inferred resource of 283 million tonnes carries a copper equivalent grade of 0.39%.

I recently toured the Schaft Creek project, with a particular focus on learning more about the Paramount zone and other exploration targets. My view of the upside potential of the project has been greatly enhanced by what I learned on that site visit, and in a subsequent meeting with Elmer Stewart.

Clearly, the old geological view of Schaft Creek has been replaced by a new model that provides considerable scope for greater size—and in particular, for more of the higher-grade tonnage that will support the economics of the project.

The site visit was also useful in better understanding the logistics of the project. We flew by helicopter from the airstrip at Bob Quinn Lake, following the proposed road access route. The first part of the road has been completed as part of the Galore Creek road.

The Copper Fox share price reflects a substantial valuation for the present resource, in line with the junior’s portion of the project ownership if Teck backs in, based on the values determined in the pre-feasibility study.

However, that valuation incorporated copper and gold prices that are much lower than the current prices. Most significantly, the emerging Paramount zone and the other targets stand to add a significant, high-grade component to the project, and thereby adds substantial value to the project.

Further favorable results from drilling that supports the size potential of the Paramount zone could see further strength in the share price.

http://www.moneyshow.com/investing/article/29/Global-24139/Big-Upside-in-2-Junior-Gold-Miners/?aid=global-24139&iid=Global&page=2