The Schaft Creek Project is one of the largest undeveloped porphyry copper deposits in Northwestern British Columbia, Canada containing significant gold-molybdenum-silver by-products.

The project, an open pit mine, is managed by the Schaft Creek Joint Venture formed in July 2013. The joint venture is formed between Teck Resources Limited (75%) and Copper Fox Metals Inc. (25%). Teck Resources is the operator of the SCJV.

In May 2004, a status and resource estimate of the project was prepared. It was followed by a preliminary assessment (scoping study) of the viability of the project in September 2004 and an updated resource estimate in June 2007.

In December 2007, a Preliminary Economic Assessment (PEA) of the project was published followed by a Preliminary Feasibility Study (PFS) on the project development in September 2008.

The 2008 PFS was updated and published in May 2010 and was followed by an updated mineral resource estimate in July 2011.

A resource estimate of the project was published in June 2012 and a technical report with a feasibility study in January 2013.

The resource estimate was updated and published in January 2021 succeeded by a PEA in September 2021.

According to the September 2021 PEA, the project has a pre-tax payback period of 4.4 years and a post-tax payback period of 4.8 years for a 21-year life of mine.

The SCJV approved a C$17.2m ($12.78m) budget to advance the development of the project in 2023. The fund will be completely funded by Teck.

Schaft Creek Location and Site Details

Covering an area of 55,779.56 hectares (ha), the Schaft Creek Project is located on the eastern side of the Coast Mountains within the Cassiar/Liard Mining Division.

The project lies approximately 120km southwest of Dease Lake and 375km northwest of Smithers. Telegraph Creek is the closest population centre located approximately 61km to the north of the project.

The Highway 37 lies 45km east of the project. The project has an exploration camp 1km towards its southwest.

The project consists of 181 mining claims comprising a north block, a south block, and three isolated claims to the northeast.

The project can be accessed by a rotary or a fixed-wing aircraft through two gravel airstrips located adjacent to the project camp. The airstrips are approximately 770m long.

Schaft Creek Ownership History

BIK Syndicate, a consortium of companies incorporated as Liard Copper Mines Ltd. in 1966, staked the initial claims in 1957. The initial claims and subsequent additions were staked over the Liard Zone (Liard Property).

An option agreement was signed between Liard and Hecla Mining Company in 1968. Under this agreement, Liard earned a 70% interest in the Liard Property and retained a 30% carried Net Proceeds Interest (NPI) in the Liard Property.

Teck Resources acquired a 78% interest in Liard representing a 23.4% interest in the Liard Property.

The north claims (Paramount Claims) of the Liard Property were staked by Paramount Mining Ltd. Paramount Mining signed an option agreement with Hecla for the Paramount Claims in 1969. Subsequently, Teck acquired the tenure over an area comprising the Paramount Claims.

Hecla transferred its 70% interest in the Liard Property to Teck in 1978 and kept 5% NPI with itself yielding an effective 3.5% NPI on the Liard Property for Hecla.

Teck signed an option agreement with Guillermo Salazar in January 2002 under which Salazar received a 70% direct participating interest of Teck in the Liard property. Salazar also received 23.4% indirect carried interest of Teck in the Property by completing a positive bankable feasibility study.

The Paramount Claims were included in the agreement. Teck could acquire up to 75% interest through back-in right in the property.

In February 2003, the option agreement was assigned to 955528 Alberta Ltd. by Salazar. In 2004, Alberta merged with Copper Fox which conducted further work on the project from 2005 to 2012.

Copper Fox and Teck signed an agreement in July 2013 and formed SCJV. The SCJV included a 78% interest of Teck in Liard Property.

The SCJV entered into an agreement in December 2015 and acquired an additional 7.4% of the issued and outstanding shares of Liard Property. Thus, the total ownership of the Liard Property became approximately 85.5%.

Geology and Mineralisation

Predominantly, the Schaft Creek Project is underlain by rocks representing the Hickman Batholith and the Stuhini Group volcanic rocks (lithological domains).

The boundary of these domains is obscured by colluvial and alluvial covers in the Schaft Creek valley. The mineralisation hosts the boundary between the batholith and volcanic rocks within the deposit area.

From oldest to youngest, the types of rocks of the Hickman Batholith hosted within the project area are ultramafic dunite, clinopyroxenite, hornblendite, equigranular to weakly porphyric granodiorite to granite, porphyric monzonite to monzodiorite, and different feldspar-quartz porphyritic monzodiorite dikes.

The rocks of the Stuhini Group within the project area include augite, plagioclase phyric coherent volcanic flows, basaltic to andesitic volcaniclastic tuffs and breccias, gabbroic sills, and augite-phyric subvolcanic dikes.

The minerals are hosted within three zones: the Main (Liard) Zone, the Paramount Zone, and the West Breccia Zone.

The Liard Zone hosts various types of vein-hosted mineralisation: the copper-gold-molybdenum mineralisation, the overprinting copper-gold mineralization, and late molybdenum mineralization.

The Paramount Zone hosts different breccia cement minerals with different mineralization styles: the copper-molybdenum mineralization associated with K-feldspar-quartz-biotite-chalcopyrite-molybdenite ± bornite veins and breccias with potassic alteration.

The copper-gold-molybdenum mineralization associated with chalcopyrite-bornite-anhydrite ± molybdenite veins and associated albitic alteration, and the copper-gold-molybdenum mineralization associated with quartz-carbonate-tourmaline-chalcopyrite ± bornite ± molybdenite veins and breccias with associated silicic alteration.

The West Breccia Zone mineralization is similar to the Paramount Zone and dominated by low-medium temperature breccia mineralogy with three prominent mineralization styles.

The copper-molybdenum-gold mineralisation associated with molybdenite ± tourmaline-chalcopyrite-pyrite-carbonate veins and breccias with silicic alteration.

The copper-molybdenum mineralization associated with pyrite-calcite-chlorite veins and breccias with propylitic alteration and the high-grade copper-molybdenum-gold mineralization associated with calcite-tourmaline-actinolite-chlorite breccia cement.

Schaft Creek Mineral Resource Estimate

The measured mineral resource estimate for the Schaft Creek Project is 176Mt containing 1,262mlb copper at a grading of 0.32%, 1.28mtoz gold at a grading of 0.22g/t, 71mlb molybdenum at a grading of 0.018%, and 8.26mtoz silver at a grading of 1.46g/t.

The indicated mineral resources are 1,169Mt containing 6,503mlb copper at a grading of 0.25%, 5.69mtoz gold at a grading of 0.15g/t, 440mlb molybdenum at a grading of 0.017%, and 46mtoz silver at a grading of 1.22g/t.

The total (measured + indicated) mineral resource estimate for the project is 1,346Mt.

The inferred mineral resource estimate of the project is 344Mt containing 1.303mlb copper at a grading of 0.17%, 1.18mtoz gold at a grading of 0.11g/t, 96mlb molybdenum at a grading of 0.013%, and 9.28mtoz silver at a grading of 0.84g/t.

Mining Methods and Processing

A 20*20*15m block model has been used for the updated mine plan for pit shell generation, pit design, and production scheduling.

The plan of mining is based on a conventional open pit truck-and-shovel method.

Under the method, the electric rope shovels with 45m3 buckets will be used as primary loading units. Hauling will be conducted using 360t haul trucks.

The waste rock will be stored in the east and west Rock Storage facilities (RSFs) with a total storage capacity of 571.1 million m3. A portion of the waste rock will be used for the construction of the embankment.

The project will produce 1.03 billion tonnes (Bt) of waste rock and 1.03Bt of mill feed over the 21-year life of mine at average grades of 0.26% copper, 0.16g/t gold, 0.017% molybdenum, and 1.23g/t silver with an overall life of mine strip ratio of approximately one.

The ore will be processed in a proposed processing plant with a nominal throughput of 133,000 tonnes per day (t/d) and an availability of 92%.

The run of mine will undergo crushing in the primary crushing circuit resulting in the reduction in the particle size to approximately 80% passing 120mm or finer.

The crushed mill feed will be transferred to a stockpile of 120,000t live capacity and then reclaimed in two parallel lines to two SAG mills, four Ball mills, and three Pebble Crushers (SABC) circuits of the primary grinding circuit. The SABC circuits will further reduce the particle size to 80% passing 150μm.

The material from the primary grinding circuits will enter rougher/scavenger flotation circuits consisting of two trains of copper-molybdenum rougher/scavenger flotation. The circuits will produce a low-grade rougher/scavenger concentrate and a high-grade rougher concentrate.

Both concentrates will be reground separately and upgraded in three stages of cleaner flotation producing a copper-molybdenum bulk flotation concentrate.

The further treatment of the bulk flotation concentrate will produce a molybdenum concentrate containing approximately 50% molybdenum after leaching with chloride and a copper concentrate containing 28% estimated copper with gold and silver.

The final flotation concentrates will undergo thickening and pressure filtration to a moisture content of approximately 9%.

The molybdenum concentrate will undergo dewatering by drying to a moisture content of approximately 4% to 5%.

The dried molybdenum concentrate will be stored in bags before trucking to Fairview Terminals in Prince Rupert for international shipment to the smelter.

The copper concentrate will be stockpiled and trucked via Highway 37 to the Port of Stewart for storage and export to foreign markets.

Schaft Creek Infrastructure

The onsite infrastructure will consist of a Galore Creek access road linking the Schaft Creek turnoff, More Canyon Bridge, a network of site haul roads, and access roads, including the 40km new road, linking the Schaft Creek turnoff north via Mess Creek Valley to the project site.

The other onsite infrastructure will include a tailing storage facility, a water supply and distribution system, a sewage disposal plant, and processing and associated facilities.

The off-site infrastructure will consist of an upgraded Bob Quinn Lake Airport (BQLA) located approximately 120km from the site and a concentrate storage facility at Port Stewart in British Columbia.

The BQLA will be upgraded by installing a navigation/instrument landing system and a terminal.

Power Supply and Distribution

The site of the Schaft Creek Project will receive power from BC Hydro via a new private 95km and 287kV transmission line connecting the site to the BC Hydro Bob Quinn Substation.

The substation will include a main incoming disconnect switch, a main circuit breaker (SF6), four circuit breakers with line side disconnects, and four main stepdown transformers each with rated 60/80MVA, ONAN/ONAF, 287kV to 35kV nominal 10% impedance and high and low voltage delta with zigzag transformers with resistance grounding.

The 38kV switchgear will be located within the substation area. The switchgear will contain 33 feeder breakers which will distribute power to the site.

The oil-filled transformers to convert power from 35kV to 4.16kV will be located outdoor and adjacent to the electrical rooms on the side of the concentrator.

The dry type transformers to convert power from 35kV to 600V will be located indoor within the electrical rooms.

The remote loads will receive power via a 35kV overhead transmission line.

Important Contractors

A team of engineering consultants were commissioned by Copper Fox to prepare the PEA of the Schaft Creek Project in 2020. The team included the following companies:

Tetra Tech was selected for overall project management, mining methods, mineral processing and recovery methods, infrastructure, capital, and operating cost estimates with economic analysis.

Red Pennant Communications supported in preparing project description, location, accessibility, history, geological setting, deposit types, exploration, drilling, mineral resource estimate, and adjacent properties.

Greenwood Environmental prepared environmental studies, permitting, and social or community impact of the PEA.

Ruskin Construction/ Allnorth Consultants Ltd. was selected for preparing Galore Creek Access Road and More Canyon Bridge sections, McElhanney Consulting Services Ltd. for Mess Creek Access Road, and

Knight Piésold for tailings and waste rock management and power transmission including capital costs.

Tetra Tech prepared the January 2013 FS and June 2012 resource estimate of the project.

The July 2011 mineral resource estimate of the project was prepared by AMEC Americas Limited.

Samuel Engineering prepared the amended PFS (May 2010), September 2008 PFS, and December 2007 PEA of the project.

Associated Geoscience. prepared the updated mineral resource estimate of June 2007.

Associated Mining Consultants and HATCH were selected to prepare September 2004 preliminary assessment (scoping study) of the project.

Giroux Consultants was engaged to prepare the resource estimate (May 2004) of the project.