VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 23, 2012) - Nevada Copper Corp. (News - Market indicators) ("Nevada Copper") is pleased to announce the results of its definitive Feasibility Study for its 100% owned Pumpkin Hollow Copper Project located in Yerington, Nevada. The Feasibility Study was prepared under the direction of Tetra Tech, Inc. ("Tetra Tech"), an industry leading international engineering firm, with substantial input from Merit Consultants International Inc. ("Merit"), which compiled and reviewed the initial capital cost estimate. The Feasibility Study, with capital costs defined to within plus/minus 15%, builds upon two previous Preliminary Economic Assessments prepared by Tetra Tech, and significant metallurgical and geotechnical work completed in 2010 and 2011. The Feasibility Study confirms the technical and financial viability of constructing and operating a 67,500 ton-per-day copper mining and processing operation at Pumpkin Hollow. 

Highlights of the Feasibility Study (all amounts are stated in United States dollars):

• The project development consists of a 60,000 ton-per-day open pit operation; and a 7,500 ton-per-day underground operation, feeding a single 67,500 ton-per-day concentrator;

• First production targeted for mid-2015, with a current mine life of 18 years;

• Proven and Probable Mineral Reserves of 4.29 billion pounds of copper; 952,000 ounces of gold and 27.3 million ounces of silver on the basis of drill data up to October 2010;

• Life-of-Mine ("LOM") metal production contained in concentrates totals 3.83 billion pounds of copper, 641,917 ounces of gold and 15.37 million ounces of silver;

• Average annual copper production in concentrates:

            Years 1 to 5: 274 million pounds per year 
            Years 1 to 10: 254 million pounds per year
            LOM: 226 million pounds per year

• Initial capital costs are estimated to be $1.04 billion including contingencies, excluding working capital of $48.9 million;

• LOM site operating cash costs are $12.33 per ton of ore-milled; copper production costs net of gold and silver credits are:

            Years 1 to 5: $1.28 per pound of payable copper
            Years 1 to 10: $1.37 per pound of payable copper
            LOM: $1.43 per pound of payable copper

• Summary of Economic Results:

1. Base Case: Three year trailing average price of $3.24/lb. copper, $1,252/oz. gold and $23.19/oz. silver:

            Net Present Value at 5% is $1.91 billion, pre-tax. 
            Net Present Value at 8% is $1.26 billion, pre-tax. 
            Internal Rate of Return is 23.1% and payback is 3.6 years.

2. Alternate Case (1): Quoted forward prices to 2021 declining to long term of $2.50/lb. copper; gold and silver same as Base Case:

            Net Present Value at 5% is $1.49 billion, pre-tax. 
            Net Present Value at 8% is $1.02 billion, pre-tax.
            Internal Rate of Return is 23.5% and payback is 3.3 years.

3. Alternate Case (2): $3.75/lb. copper; gold and silver same as Base Case:

            Net Present Value at 5% is $2.93 billion, pre-tax. 
            Net Present Value at 8% is $2.05 billion, pre-tax.
            Internal Rate of Return is 30.8% and payback is 3.0 years.

4. Average annual operating cash-flow (Years 1 to 5):

            Base Case: $450 million
            Alternate Case (1): $494 million
            Alternate Case (2): $570 million

"The completion of the definitive Feasibility Study is a significant milestone in Nevada Copper's development," commented Giulio Bonifacio, President & CEO. "We are extremely pleased with the results as it further validates our expectations for the project while providing independent confirmation that the Pumpkin Hollow project will support a low-risk, and economically robust, copper mine with an initial mine life of 18 years. The Board of Directors has approved a positive production decision, subject to completion of project financing arrangements and receipt of required permits. With the Feasibility Study results in hand, we will now move to secure a strategic partner in 2012. A number of companies have expressed interest in the project and have been conducting due diligence while awaiting the Feasibility Study.

"Additionally, the Feasibility Study will be updated by mid-2012 to incorporate the benefits of magnetite recovery and sales from the iron magnetite resource. If the iron values are incorporated into the future mining plans, the size and tonnage of the North and South open pit deposits are expected to increase significantly while lowering the waste tonnage and strip ratio. Also, since late 2010 drilling has demonstrated extensions to the mineralized zones in the North and South deposits and these extensions will be incorporated into an updated mineral resource, mineral reserve and related mining plans. The dual benefits of the iron resource and results from the current 50,000 meter drilling program are expected to have a further positive impact on already robust economics."

Permits and Land Transfer

The Pumpkin Hollow project is located on private land and unpatented mining claims located on Bureau of Land Management ("BLM") administered federal lands ("Federal Lands"). The City of Yerington (the "City") has proposed to acquire the Federal Lands ("Land Transfer") and transfer the Federal Lands to the City. Nevada Copper has agreed to collaborate with the City to support the Land Transfer. If successful, the Land Transfer would convey all Federal Lands associated with the project from BLM jurisdiction to the City. This would allow the City to receive a portion of both property tax and Nevada net proceeds tax. It would also provide additional lands around the project for sustainable development, including current and long-term, post-mining commercial and industrial development, recreational opportunities, and expansion of community and cultural events. Subject to successful completion of the Land Transfer, all permitting would come under the jurisdiction of the State of Nevada and the City, with receipt of permits targeted for early 2013.

The Nevada Congressional delegation is planning to introduce legislation in Congress as soon as Congress returns to a full schedule on January 24, 2012. The City is requesting that hearings be scheduled as soon as possible to assure timely hearing and passage of this legislation that is critically important to the City. In the event the Land Transfer is not completed as planned, the project activities would require a Plan of Operations with the BLM and compliance with the National Environmental Policy Act of 1969 ("NEPA"). NEPA compliance would entail preparation of an Environmental Impact Statement ("EIS") pursuant to BLM guidelines.

Regardless of the land status and permit process, the environmental, engineering and baseline technical studies associated with the entire project are in progress and will be completed in conformance with all Federal, State and local standards. That assures that the project is designed, constructed and operated to meet those standards and that either permitting process, including preparation of an EIS, would not be delayed. If BLM approval is required, BLM process and State permits for the project would be expected to be complete in early 2015.

Development Schedule

An underground contractor was selected in December 2011 for purposes of sinking of a 2,200 foot, 24 foot diameter production-sized shaft to access the East underground deposit. The contractor is in the process of mobilizing to site. All permits to allow for shaft sinking and construction are in hand. Engineering work will start shortly on the design and installation of hoist and head frame facilities at the shaft location. A production hoist has been secured and will be refurbished prior to shipment to site.

Detailed engineering and ordering of key long-lead-time mining and process equipment will start by mid-2012. Pre-stripping the North deposit and construction of the mill and related facilities will occur in 2013-14 once permits are obtained. Production is anticipated to commence in the second quarter of 2015.

Project Opportunities

Project opportunities in the near term to further enhance the economic value of the Pumpkin Hollow project will be included in an updated feasibility study which is targeted for completion in mid-2012 and would reflect the following:

Iron

Work has been initiated to further assess the metallurgy and marketability of the Pumpkin Hollow iron magnetite resources, to incorporate the iron values into the project block models, to revise the current mining plans to generate an iron production schedule and to include the additional revenues from this source in the revised project cash flows. The inclusion of iron values in the block model is expected to greatly improve strip ratios since much of what is now considered open pit waste material would have sufficient value to be processed through the mill facility.

Resource expansion

Drilling since late 2010 demonstrated material extensions to the known mineral inventories at Pumpkin Hollow, particularly the North open pit deposit. Updating the mineral resource inventory to reflect this drilling, along with updated mining plans, is expected to expand the mineral resources and reserves at the project.

Pit expansion

Whittle pit analysis using the recent drilling and marketable iron product is expected to produce a mine design where the North and South pits will intersect. A merged pit configuration is expected to have a positive effect on the strip ratio, as well as improvements in pit scheduling and equipment utilization.

Mineral Resources

The project mineral resource was prepared by the mineral resource and mining division of Tetra Tech, incorporating the results of drilling to the end of October 2010, as previously disclosed in a news release on March 31, 2011. This resource was an update of a previous mineral resource estimate disclosed in July 2009 and filed on SEDAR on August 24, 2009.

The mineral resource estimate was performed by or under the direction of John Rozelle, PG, Tetra Tech's Mineral Resource Division Principal Geologist at the time of this estimate, an independent Qualified Person as set forth by Canadian National Instrument 43-101 ("NI 43-101").

The following Inferred Resources are in addition to the Measured and Indicated Resources:

Mineral resources that are not categorized as mineral reserves have not demonstrated economic viability.

Mineral Reserve

Proven and Probable mineral reserves are the economically-mineable portions of the Measured and Indicated mineral resources above, respectively, as demonstrated by the Feasibility Study. The proven and probable reserves at Pumpkin Hollow are summarized below:

The mineral reserves and mine plans for each of the underground and open pit deposits were determined using cutoff grades developed by Tetra Tech as appropriate for the mining method and costs associated with the deposits. For the open pit western deposits the cutoff grade used was 0.18% copper and 0.8% copper for the eastern underground deposits. A copper price of $3.00 per pound was assumed. Tetra Tech is the independent Qualified Person who is responsible for the mineral reserve estimate. The copper equivalency was determined using Base Case metals prices and metallurgical recoveries of 89.3%, 67.3% and 56.3% for copper, gold and silver respectively.

Drilling has been continuous since November 2010 with 3 drill rigs that, to date, have completed 28,000 meters of the expanded 50,000 meter drilled program. These drill results have not yet been incorporated into the above mineral resource or reserve numbers. Nevada Copper intends to update its mineral resource and reserve in 2012.

Iron Mineral Resource

Though not considered in the Feasibility Study, the Pumpkin Hollow project also has considerable resources of iron in the form of magnetite. The following tables include only those iron resources amenable to open-pit mining methods in the Western deposits. Possible mining, recovery and sale of a magnetite concentrate will be considered in an updated feasibility study. The updated definitive feasibility study will build off the current Feasibility Study and is targeted for completion by mid-2012.

Mineral resources that are not categorized as mineral reserves have not demonstrated economic viability.

This iron mineral resource estimate was disclosed in Nevada Copper's March 31, 2011 News Release and was updated from a previous iron resource estimate disclosed in a Technical Report dated August 20, 2009 and filed in accordance with NI 43-101 on SEDAR. 

If an updated feasibility study demonstrates the iron resource to be economically viable, inclusion of iron in the open pit block model values is expected to significantly expand the size and tonnage of the North and South open pits, and lower waste tonnages and strip ratio.

Mining

Both underground and open pit mining methods were selected in order to maximize the overall recovery of copper from the Pumpkin Hollow deposits. The East underground deposit will be developed first via a 24 foot diameter production-sized shaft. All underground production (7,500 ton-per-day) will come initially from the East deposit only. Development of the E2 deposit will occur after development of the East deposit is completed. E2 development will occur from underground via a 4,800-foot conveyor-equipped decline from the East zone. Vent and secondary egress shafts will be constructed for both East and E2 zones as required. 

The open pit deposits will be developed sequentially starting with pre-stripping the North deposit. Open pit mill feed will come exclusively from the North deposit until year 8 when ore from the South deposit is added and is expected to eventually replace all North ore by year 13.

Total ore mined and processed from open pit and underground sources, LOM, is 405.4 million tons grading 0.53% copper, 0.002 oz./ton (0.081 g/tonne) gold and 0.067 oz./ton (2.31 g/tonne) silver.

Process Plant

Ore will be transported from the open pit and underground mines to a nominal 67,500 ton-per-day concentrator located west of the open pits. For open pit ores, a large semi-mobile in-pit crusher reduces ore size before conveyance to the process facility. Underground ore is crushed underground, hoisted to surface via a 24-foot diameter production shaft and transported overland approximately 2 miles by truck to the process facility. 

The concentration circuit is conventional with a single, large semi-autogenous grinding mill and secondary ball mill grinding and flotation, followed by thickening and pressure filtration to produce a final concentrate grading 25.5% copper and containing payable gold and silver. Primary grind size is 150 microns with an overall copper recovery of 89.3%. Gold and silver recoveries to the copper concentrates are 67.3% and 56.3% respectively.

Metals Production

Projected metals production to the copper concentrate is summarized below. LOM copper production in concentrates is estimated to be 3.83 billion pounds (1.9 million tons).

Tailings Storage

To minimize water usage, tailings will be de-watered, filtered and conveyed to a "dry-stack" on-site storage facility. This water is then recycled to the process plant. This method is considered "best practice" for long term tailings storage in dry environments with finite water resources. It also lowers long term environmental monitoring costs.

Infrastructure

The project area is well supplied with nearby local infrastructure. Project-related infrastructure expenditures include a new 6 mile (10km) 120kV power line and related substation. An energy cost of $0.065/kwh was used for Feasibility Study purposes, based on NV Energy expected rates. A 5-mile (8 km) mine access road connects the site to state Highway 95 to the North, and a rail load-out facility located on Union Pacific tracks. The rail tracks run approximately 13 miles (21 km) north of the project and connect with Union Pacific mainline tracks for connection to west coast ports. Process make-up water will be piped 6 miles (10 km) from the City of Yerington, county seat for Lyon County, where housing and regional services are available and most employees are expected to reside. The communities of Silver Springs, Smith Valley, Fernley, Dayton, Fallon, Carson City and Hawthorne are also all within commuting distance, and have a labor pool and existing housing, particularly for a construction workforce.

Capital Costs

The project initial capital costs are estimated at $1.04 billion with an accuracy of plus/minus 15% as of January 2012, including a contingency of $64.1 million. The contingency allowance is calculated based on assessed factors for each of the major Direct and Indirect cost categories. The major direct cost items include development of the East underground mine, the North deposit pre-stripping, process plant, tailing storage facility, site infrastructure and offsite rail load-out facility. Indirect costs include such major areas as engineering and procurement, construction management, freight and commissioning, spares inventory, first fills, and Owners Costs.

Working capital required for initial operations is estimated to be $48.9 million. 

LOM sustaining capital totals $1.0 billion and includes development of the E2 underground deposit and related equipment; South open pit deposit development costs; replacement of, and additions to, surface mobile equipment; lease costs for the initial mining fleet; reclamation costs; and expenditures on the tailings storage facility.

Operating Costs

LOM site unit operating cash costs, net of capitalized pre-stripping and other predevelopment costs, are $12.33 per ton-milled, as summarized in the table below:

Open pit mining cash costs average $4.79 per ton of ore mined, including waste and ore mining costs. Average strip ratios for the North & South deposits respectively are 3.5 and 3.0 to 1, including the North deposit pre-strip. Underground mining costs average $27.98 per ton of ore mined. 

Copper production cash costs per payable pound including site operating costs and copper conversion costs such as smelter charges and concentrate transport, net of gold and silver credits, are estimated to average $1.28/lb. for Years 1 to 5 and $1.37/lb. for Years 1 to 10.

Economic Analysis Summary

The project economics were evaluated using a cash flow analysis, whereby revenues and costs are projected into the future on an annual basis. Annual net cash flows are then discounted at a rate of interest to reflect the time value of money to yield a Net Present Value ("NPV"). The analysis includes all site operating costs, smelter charges and transport costs, royalties, estimated local property taxes, and Nevada Net Proceeds of Mining tax, but excludes corporate income taxes. 

The most significant input which affects project economics are projected future metals prices. The following three metal price scenarios were used:

1. Base Case: Three year trailing average London Metal Exchange ("LME") prices were used as at December 22, 2011 and are as follows: 

1. Copper: $3.24 per pound.
2. Gold: $1,252 per ounce.
3. Silver: $23.19 per ounce.

2. Alternate Case (1):

1. Copper: Long term forward prices as at December 8, 2011, supplied by Barclays Capital, were used.

These forward prices are available to 2021, and thereafter copper prices were reduced to a long term price of $2.50 per pound - See table below.

2. Gold: Same as Base Case.
3. Silver: Same as Base Case.

3. Alternate Case (2):

1. Copper: $3.75 per pound
2. Gold: Same as Base Case
3. Silver: Same as Base Case

The cash LME copper price on January 19, 2012 was $3.78/lb.

Summary of Economic Results

Key economic indicators extracted from the Feasibility Study are summarized below:

Royalties and Nevada Mining Taxes - The economic results include the costs of all third party royalties, and an estimate of local property taxes and Nevada Net Proceeds Tax payable on income from operations.

Corporate Income Tax - Corporate income taxes were excluded for the purposes of the economic analysis. Income tax calculations related to mining income can be complex in the United States with nominal tax rates on mining income in the United States being lowered by the net effects of percentage depletion and other adjustments.

Conference Call Details

A conference call to discuss the results of the Pumpkin Hollow Project Feasibility Study has been scheduled for Thursday, January 26, 2012 at 11:00am ET (8:00am PT). Dial-in numbers for North America are: toll free 866-696-5910 or 416-340-2217; for International 800-8989-6336 - Participant Pass Code No. 4343242. An instant replay will be available for two weeks following the conference call as follows: toll free 800-408-3053 or 905-694-9451; for International 800-3366-3052 - Participant Pass Code No. 8818300.

Qualified Persons

In November 2011 Nevada Copper commissioned Tetra Tech to complete the Pumpkin Hollow Project Feasibility Study in accordance with NI 43-101. The initial capital costs estimates for the Pumpkin Hollow Project in the Feasibility Study were compiled and reviewed by Merit under the direction of Jay Collins, P. Eng. The scientific and technical information in this release has been reviewed and approved by Erik Spiller, Q.P., Vice President, of Tetra Tech, and overall manager for the Feasibility Study, and by Mr. Collins both of whom are Independent Qualified Persons within the meaning of NI 43-101. 

This release was also reviewed by Gregory French, P.G., Vice-President & Project Manager of Nevada Copper and Robert McKnight, P. Eng., Executive Vice-President of Nevada Copper, both of whom are Non-independent Qualified Persons within the meaning of NI 43-101.

Readers should refer to the Feasibility Study Technical Report for further details of the project development. The Feasibility Study Technical Report will be filed in accordance with NI 43-101 on SEDAR (www.sedar.com) within the required 45 day statutory period and will be made available on Nevada Copper's website (www.nevadacopper.com). An updated PowerPoint presentation will be available on the Nevada Copper website.

NEVADA COPPER CORP.

Giulio T. Bonifacio, President & CEO

We seek safe harbour.