Nevada Copper on track for Q4 start-up

The Pumpkin Hollow Project, near Yerington, 100 miles southeast of Reno, Nevada. Source: Nevada Copper Corp.

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Nevada Copper Corp. [NCU-TSX] on Tuesday October 8 issued a development update for its 100%-owned Pumpkin Hollow underground copper project 100 miles southeast of Reno, Nevada. In the update, the company reaffirmed the anticipated fourth quarter 2019 start-up timeline and most recent capital expenditure estimate of $211 million.

Pre-commissioning of the process plant grinding circuit is now under way. Other significant recent milestones include the completion and energization of the 120 kilovolt power line, the establishment of flow-through ventilation between the 2850 and 2770 levels, and the stockpiling of over 70,000 tons of development ore on surface.

On Tuesday, Nevada Copper shares eased 5.7% or $0.0125 to 20 cents. The shares are currently trading in a 52-week range of 21 cents and 54 cents.

Pumpkin Hollow is a high-grade skarn/iron oxide copper gold (IOCG) deposit located within a porphyry copper district within the Walker Lane mineral belt of western Nevada.

Pumpkin Hollow is host to an underground development and an open pit development.

“We are now in the final stages before entering production in the fourth quarter of this year,” said Nevada Copper CEO Matt Gili.

The announcement comes after Nevada Copper Inc. recently entered into a US$115 million credit agreement with KfW IPEX-Bank to provide an attractive, long-term project senior debt facility supported by a loan guarantee issued by the Federal Republic of Germany through Eurler Hermes for the underground mine at Pumpkin Hollow.

Net proceeds of the drawdown are being used to advance construction and development of the Pumpkin Hollow Project which is located 4 km west of a permitted open pit development project.

The underground mine hosts fully-permitted mineral reserves of 24 million tonnes of 1.74% copper equivalent, material that is expected to support average annual production of 50 million pounds of copper, 8,000 ounces of gold and 150,000 ounces of silver for 13.5 years.

Average annual cash flow for the first five years is expected to be US$80 million.

Earlier this year, the company announced a Pre-Feasibility Study (PFS) for the open pit part of the project.

The PFS is based on open pit measured and indicated resources of 553 million tonnes, grading 0.45% copper, 0.07 g/t gold, and 1.85 g/t silver per ton. That amounts to 5.0 billion pounds of contained copper, 879,000 ounces of gold and 29.78 million ounces of silver.

The PFS for the open pit foresees a mine life of 19 years, with peak annual copper production of 11,000 tonnes (244 million pounds) at a cash cost of US$1.7/lb net of by-product credits.

The initial Capex is forecast at US$672 million and envisages a phased production growth consisting of an initial production scale of 37,000 tonnes per day, rising to 70,000 tonnes and flexibility over timing of the expansion.

The company has said development options and timing for the open pit project construction and operations remain flexible.


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