Nevada Copper Corp. (TSX:NCU) has announced it will proceed directly to completion of a Definitive Feasibility Study at its 100% owned Pumpkin Hollow copper project located in Nevada.
This decision is based on the success of the delineation drilling program and the substantial progress made in feasibility-related engineering studies. Additionally, this will accelerate the project development timeline and speed up the permitting process.
The results of current drilling, metallurgical, and geotechnical programs will contribute to the DFS, which will also include an updated resource estimate reflecting the results of the current 2010 drilling program of approximately 50,000 meters. The DFS will advance Pumpkin Hollow toward production by building on the results of the two previous Preliminary Economic Assessment studies (previously announced and filed on SEDAR on April 2008 and January 2010) and recent engineering studies. The DFS will also evaluate alternative project development options for the large integrated open pit & underground operation and stand-alone high-grade operation at Pumpkin Hollow.
Discussions with selected engineering firms have commenced and will detail the remaining engineering work to be completed for the DFS. Completion of the DFS is anticipated by June 30, 2011.
Mr. Giulio Bonifacio, Nevada Copper's President and CEO, commented: "This significant milestone reflects the confidence of management and the Board in the high quality of the Pumpkin Hollow project. The large high-grade copper resource combined with superior project development characteristics is expected to result in a very profitable and large North American source of copper production."
Previous Economic Studies
As we progress through DFS we will evaluate alternative project development options which will include a large 60,000 ton per day integrated open pit & underground operation and a stand-alone 7,500 per ton per day underground High-Grade case. These are discussed and summarized below:
- On March 17, 2008 Nevada Copper announced the results of a National Instrument 43-101 compliant Preliminary Economic Assessment ("PEA"). This study evaluated four development options, including the integrated open pit (52,500 tons per day) with an underground (7,500 tons per day) operation, producing up to 250 million pounds of copper per year. Initial capital costs associated with this operation were estimated at US$780 million, including contingencies and working capital. Other development options included: open pit mining only, with and without iron recovery; and underground mining only.
- On December 1, 2009 Nevada Copper announced the results of an updated PEA. This PEA evaluated two underground High-Grade Cases that included mining at 7,500 tons per day by way of decline to the East and E2 deposits, and a starter pit from the South Deposit. The High-Grade Cases incorporated resource expansion resulting from 2008 and 2009 drilling campaigns and optimization studies focused on reducing initial capital expenditure requirements. The resulting project proved to be resilient to periods of lower copper prices. Capital costs were reduced to approximately 25% of capital cost estimates for the larger 60,000 ton per day integrated open pit and underground operation that was evaluated in the 2008 PEA. Additionally, the High-Grade Cases did not compromise the large open pit project envisioned in the 2008 PEA scenarios while allowing for transition to a large integrated open-pit & underground operation on a staged basis.
The economic results of both the integrated and underground case are compared below at copper prices of $2.50 and $3.00 per pound:
Gregory French, CPG #10708, and a Qualified Person as defined in Canadian National Instrument 43-101, has reviewed and is responsible for the preparation of the technical information in this news release.