VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 20, 2012) - Nevada Copper Corp. (News - Market indicators) ("Nevada Copper") is pleased to provide a project update on recent developments at its Pumpkin Hollow Copper Project located in Nevada. In addition, Nevada Copper is very pleased to report that the Land Conveyance bill was passed by the House of Representatives on June 19, 2012. Activity will now move to the Senate subcommittee for review and action.
Pumpkin Hollow New Resource Estimate
Nevada Copper plans to update the project's overall mineral resource estimate. The updated resource estimate will include the results from approximately 45,000 meters of successful drilling conducted since November 2010, primarily in the North and South open-pittable deposits. The updated resource estimate is planned for release in July 2012 and will be incorporated into further feasibility study updates, as described below.
Pumpkin Hollow Current Feasibility Study Plan
In January 2012, Nevada Copper filed a comprehensive feasibility study that contemplates a single, large 67,500 copper concentrator fed by a 60,000 ton per day open pit mine operation and a 7,500 ton per day underground mine operation ("the Integrated Feasibility Study"). Initial capital costs from the Integrated Feasibility Study were estimated to be $1.04 billion.
In view of the current financial markets, Nevada Copper has decided to advance the project engineering work by completing two separate feasibility studies one of which considers a staged development process, described more fully below:
- By October 2012, a feasibility study will be released that will consider a staged development process with a review of a stand-alone 5,000 to 7,500 ton per day high-grade underground mine and mill, for which a 2,200 foot production shaft has already commenced (see project website for photos and information). Based on capital and operating cost detail from the recently published feasibility study and a previous Preliminary Economic Assessment filed on SEDAR in January 2010, the results are expected to provide an attractive production profile with a significantly reduced capital cost; and
- The Integrated Feasibility Study will be updated and will be released on or before December 2012. It will incorporate the benefits of both magnetite recovery and sales from the project's significant iron magnetite resource in addition to over 45,000 meters of drilling completed since November 2010. The current drilling program 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 drilling program are expected to have a further positive impact on project economics.
In management's view, a smaller underground project, with its greatly reduced capital funding requirements would allow retention of 100% of the project ownership. Notably, Nevada Copper has already spent or budgeted approximately $35 million of capital in 2012-13 for a production hoist, infrastructure upgrades and shaft sinking, all of which form part of the initial Stage 1 project capital requirements. Free cash flow from a successful first stage underground project would provide the necessary support for financing a large, Stage 2 open pit operation and separate concentrator.
A decision whether to stage the project development, starting with a high grade underground operation, or proceeding directly with the larger integrated project (per the Integrated Feasibility Study), will depend on a number of factors including not only the results of the feasibility studies, but also:
- project financing;
- the outcome of discussions with interested potential partners; and
- the disposition of the land conveyance bill (see below).
Shaft Sinking & Site Services
Shaft sinking is progressing well on the East deposit, which contains approximately 75% of the underground Proven & Probable copper reserves. Depth is currently 36 feet, with liner plates used for ground support for the first 99 feet of the 24 foot diameter shaft. A 110 ton crane is currently on site to provide hoisting capacity for the pre-sink shaft and erection of the hoist and headframe. Near-surface mucking is being done utilizing a small excavator at the shaft bottom.
A production-sized hoist has been acquired, refurbished and is in the process of being shipped to site from Ontario. Engineering and design drawings for the headframe, foundations and shaft collar are well-advanced to the point that bids for steel for the headframe have been received.
A new four-trailer office complex was recently placed into service to house site staff. Staff additions include a procurement manager, and an experienced mine development engineer is expected to be added shortly as shaft sinking accelerates.
A 5kV power line is being upgraded and extended to the shaft site from the NV Energy grid.
Permitting
Nevada Copper currently holds three permits from the State of Nevada ("State"). These permits allow for the construction of a 24-foot diameter, 2,200-foot deep shaft on the East deposit, and for underground exploration and mining of ore for test purposes. Mine development permit documentation will be submitted to the State on June 29, 2012 and is expected to result in the issuance of State permits for mine operations by Q1-2013. The permits would provide for a Phase 1 underground stand-alone operation and, if the Land Conveyance is successful, State permits for a larger integrated underground and open pit operation as well.
Land Conveyance Bill
Nevada Copper is extremely pleased with progress and continues to support the City of Yerington (the "City") proposal, as outlined in a land conveyance bill ("the Bill"). The Bill provides for the acquisition by the City of Federal land in and around Pumpkin Hollow and was introduced in the U.S. House of Representatives and U.S. Senate in February and March 2012 respectively. The City and Nevada Copper are in regular communication with the Nevada Congressional delegation to meet all technical and procedural aspects of the legislative process to assure its passage.
The Bill was passed by the House Natural Resources Committee on June 7, 2012, and by the House of Representatives on June 19, 2012. Now that the legislation has been passed by the House, the City understands that the Nevada Congressional Delegation is preparing sufficient information to move the Bill through the Senate subcommittee hearing process, and on to the Senate for vote, later this summer. Once a Bill has been passed by both the House and Senate, it can be signed into law by the President. The Bill, as passed by the House and introduced in the Senate would, once enacted, direct the Secretary of Interior to convey to the City, within 90 days, all right, title, and interest in the proposed lands, subject to valid existing rights and applicable existing laws.
For additional information about Nevada Copper, please visit our website at www.nevadacopper.com.
NEVADA COPPER CORP.
Giulio T. Bonifacio, President & CEO
We Seek Safe Harbour.
