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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: PaperPerson who wrote (58781)	8/6/2006 10:37:37 AM
From: Mr. Aloha	Read Replies (1) \| Respond to of 312830

Most of those option terms are in the 2004 press release in the "955528 Alberta Ltd." (company Copper Fox acquired) paragraph, and they are also spelled out at the Copper Fox web site: copperfoxmetals.com Copper Fox's agreement with Teck is very different from the Atna Resources agreement with Barrick. All Barrick has to do to execute its clawback on Atna's Pinson is spend $30 million on the project over 3 years. On the other hand, to get majority interest, Teck would have to pay Copper Fox 4 times prior expenditures, or over $100 million (shareholder letter says prior expenditures exceeded $10 million, plus Copper Fox will spend another $15 million per their option agreement). That alone is several times Copper Fox's market cap. In addition, Teck would have to arrange all the production financing, and it has to exercise the option within 120 days of the fease completion. Unlike Atna, Copper Fox would likely rally on news that Teck would exercise the option, as Teck would then likely buy Copper Fox out completely rather than partner with them for decades. If not, $100 million in the bank plus 23.4% interest in a fully-financed world-class mine partnering with Teck is still an awesome position to be in, and still likely would make Copper Fox a 10-bagger for current shareholders. IMO, Teck's claw-back option is not something to worry about for Copper Fox investors. Despite Atna's much worse claw-back arrangement and selloff from the announcement, they're still a 7-bagger from October 2002. Teck can only exercise their option with Copper Fox after completion of a positive feasibility study, which would mean Schaft Creek would be worth many times the current cheap valuation. A claw-back exercise and probable takeover by Teck after fease completion is one of the end results Copper Fox shareholders should be hoping for.