NEVADA – Nevada Copper has released a new prefeasibility study for an open pit mine at its Pumpkin Hollow project, where it is building a standalone underground operation that it expects to be in production in the fourth quarter of 2019.
The updated PFS contemplates a phased approach with an initial mining rate of 33,500 t/d with subsequent and flexible expansion to 63,500 t/d, which the company says will reduce initial upfront capital costs to about US$672 million. Expanding to 63,500 t/d will cost an additional US$473 million.
The study envisioned a mine life of 19 years with peak annual copper production of 244 million lb. of copper and a post-tax payback period of 8.1 years.
C1 cash costs are forecast to run to US$1.73 per lb. of copper net of by-product credits and all-in sustaining costs to US$2.03 per lb. The study used a long term copper price of US$3.20 per lb., and estimated a post-tax net present value at a 7% discount rate of US$829 million and internal rate of return of 21%.
The mine has been phased to minimize pre-production stripping to deliver material as soon as possible and provide a life of mine grade profile of 0.47% copper or 0.50% copper equivalent. In the first five years, the grade will average 0.65% copper or 0.69% copper equivalent.
The company plans further drilling to test the full extent of the open pit deposit and upgrade inferred resources so that they can be included in the mine plan.
The PFS was based on measured and indicated resources of 500 million tonnes grading 0.45% copper, 0.07 g/t gold and 1.85 g/t silver for 5 billion lb. of contained copper, 879,000 oz. of gold and 29.78 million oz. of silver.
The open pit project’s inferred resources add another 25 million tonnes grading 0.36% copper, 0.03 g/t gold and 0.14 g/t silver, for 197 million lb. copper, 37,000 oz. of gold and 1.09 million oz. of silver.
The project is in Nevada’s Walker Lane mineral belt and the proposed open pit mine consists of the North and South deposits. The North deposit is a copper-rich, magnetite-poor skarn breccia body hosted by hornfels of the Gardnerville Formation and will be mined first. The South deposit is a magnetite-chalcopyrite body closely associated with an intrusive contact of granodiorite into limestones of the Mason Valley Formation.
The mine will be a conventional truck and shovel operation using 15.5-metre benches.
Over the last year Nevada Copper’s shares have traded in a range of $0.33 and $0.72. At press time they were trading at $0.425. The company has about 662 million common shares outstanding for a market cap of $281 million.
This story first appeared on www.NorthernMiner.com.