More on GK and EK ownershipHere are some interesting facts that may help join pieces of the puzzle.
On March 24, 2011, Copper Fox (CUU) announced strategic acquisitions to enlarge the Schaft Creek property. By saying that the acquisitions expand the Shaft property, they seem to be acknowledging that the new acquisitions are part of the agreement. Further evidence leading to this conclusion is as follows:
The acquisitions consist of
1.1. Two mineral claims of 2,786 hectares from James Greig and John Kreft (the Greig/Kreft or GK zone). CUU paid $250,000, 1.25 million CUU shares and a 2% net smelter return.
2.2. One mineral claim of 192 hectares from Pembridge Mining for $350,000 and a 2% net smelter return. Presumably this is the ES zone
3.3. 26,954 shares of Laird Copper Mines for $269,540 and 245,000 CUU shares.
At that time (March 24) CUU said they hold “title and a 100% working interest in a contiguous 21,025 hectares” and 3,947 hectares “…not subject to the Teck earn-back.” The total new hectares is 2,978.
The June 21 and 29 news releases now say that CUU s holds “title and a 100% working interest in a contiguous 24,003.5 hectares” and 3,947 hectares “…not subject to the Teck earn-back.” It is clear that the new 2,978 hectares have been added to the area subject to Teck’s earn-back. Since Teck reviews any news release, at least both companies are on the same page re the inclusion of GK and ES in the agreement.
I conclude from this that the GK and ES zones are both part of the agreement and Teck’s earn-back. Being part of the agreement, CUU does not have power unto itself to create a SpinCo for GK, ES and other zones. CUU’s only unfettered control is over the 3,947hectares not subject to the agreement. A SpinCo would have to be negotiated with Teck.
Re legal issues -- what may be at dispute is CUU’s offer price and what Teck is willing to pay for the new properties. Also possibly at issue is how much Teck pays for any new claims that are staked under the 2 km adjacency clause.
What is still not clear in my mind is whether the payment will be at a fair market value at the time of Teck’s acceptance or at the 100%,200% or 400% provision in the agreement.
One final point! On June 29, CUU reported differently – citing expenditures on new property acquisitions that are not qualifying expenditures.
“To April 30, 2011, the Company has spent $59.7 million (excluding $2.88 million in newproperty acquisitions) of qualifying expenditures toward this study. “
I am not sure about the composition of the $2.88 million. Maybe it includes the purchase costs for the 3,947hectares plus CUU’s calculation of market value for the 2,978 new hectares. Perhaps the legal issue is over the $2.88million or a portion of it.