Patience pays off for Copper Fox investors

BC Environment Minister Murray Coell (above) and Forests, Mines and Lands Minister Pat Bell granted the environmental assessment certificate to the Northwest Transmission Line, which terminates 90km from Copper Fox's Schaft Creek property.
BC Environment Minister Murray Coell (above) and Forests, Mines and Lands Minister Pat Bell granted the environmental assessment certificate to the Northwest Transmission Line, which terminates 90km from Copper Fox's Schaft Creek property.

Copper Fox (TSXV:CUU) investors are use to playing the waiting game, but the company’s management just might be experts. Copper Fox listed on the TSX Venture in June 2004 to explore the potential of Schaft Creek, which the company believes is one one of the largest undeveloped copper deposits in North America. Guillermo Salazar, the company’s founding president and CEO actually secured the rights to the project in 2002.

Most of the uncertainty around Copper Fox has revolved around infrastructure. Shares of the company fell as low as $0.05 in late 2008 as investors were no doubt leery that the success of the company’s project was entirely dependent upon the BC Government’s approval of the Northwest Power Line, an approximately 344 km, 287 kV that terminated at Bob Quinn Lake, about 90km from Schaft Creek.

The approval of the Northwest Power Line was no slam dunk. BC Hydro had performed technical studies on the project for years and, although they said the new line would provide a reliable supply of clean power to potential industrial developments in the area, environmental opponents were vocal.

And then, on February 23rd, 2011 Copper Fox’s wait was over. The BC Environmental Assessment Office announced that the Northwest Transmission Line was finally granted an Environmental Assessment Certificate. Copper Fox put out a press release applauding the decision. Investors, in turn, applauded Copper Fox; shares of the company moved from $.96 cents on February 11th to $1.75 today.

The approval was a major win for Copper Fox, and long time investors must now feel like they were paid to wait. In 2002 the price of copper was $.60 cents a pound. On Friday, March 4th the base metal closed at $4.48 a pound.

Copper may be the textbook case for Chinese demand moving markets around the world; experts now estimate expecting a supply shortfall of about 500,000 tonnes next year. As CIBC World Markets analyst Ian Parkinson told the Globe and Mail last September 14th “In very simplistic terms, we believe if you’re long what China’s short, you’re in a good position.”

Cooper is in high demand in China because it has a wide range of applications in the construction and electronics industries. The metal is used in circuitry, wiring and contacts for computers, televisions and phones. Cooper Fox estimates that there are 7.8 billion of lbs measured and indicated copper at Schaft Creek.

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