Nevada Copper hits deeper copper at Pumpkin (May 18, 2010)

Vancouver – Step-out drilling by Nevada Copper (NCU-T) at its Pumpkin Hollow copper project in Nevada has expanded mineralization at the extensively-explored property.

The recent drill results are part of a 36,000-metre drill program designed to both expand and infill the known resource at Pumpkin Hollow for Nevada Copper’s upcoming pre-feasibility study. The property has already seen 223,000 metres of drilling from 530 holes since 1960.

Nevada Copper released an updated scoping study in late 2009 that included a high-grade underground scenario to start the project before possibly moving to the larger open-pit plan. Of the five zones identified on the project so far, the East and E2 deposits are considered to have underground potential while the North, South and Southeast deposits have open-pit potential.

The latest drilling has encountered new zones of copper mineralization at the North deposit and the East deposit. Varying amounts of gold, silver and iron also continue to be found throughout the property.

On the southwest edge of the North deposit, hole 31 intersected four zones of mineralization, including two new deeper zones. From 367 metres it hit 83.8 metres grading 0.98% copper and from 468 metres the hole hit 14.2 metres carrying 0.82% copper, both true lengths.

Hole 27, in the northwest corner of the North deposit, confirmed the more shallow mineralization found in previous holes in the area. The hole cut a true length of 5.9 metres grading 0.45% copper from 181 metres and then 8.3 metres carrying 0.55% copper from 226 metres. Hole 19, cut near the centre of the deposit, hit a true width of 52.5 metres averaging 0.42% copper from 269 metres.

In the East deposit, hole 18 expanded the higher grade mineralized zones, cutting 17.5 metres averaging 2.04% copper from 474 metres and then 14 metres carrying 2.5% copper from 582 metres. Other recent results from the East zone include hole 12 that cut 12.5 metres grading 2.4% copper from 582 metres and hole 1 that hit 29.7 metres grading 4.18% copper from 469 metres.

In the South deposit, drilling confirmed known shallow mineralization. Hole 28 cut a true length of 56.4 metres grading 0.79% copper from 116 metres. Hole 13 cut true lengths of 56.4 metres grading 0.72% copper from 151 metres, 66.9 metres carrying 0.7% copper from 320 metres and 29.5 metres averaging 1.38% copper from 414 metres.

The 57-sq.-km project is 13 km southeast of Yerington and a one-hour drive southeast of Reno. The area has been extensively explored since 1960 by the likes of US Steel (X-N) and Anaconda Copper.

The current preliminary economic assessment figured a 7,500-ton-per-day operation would have US$192 million in capital costs using a small high-grade starter pit during the first three years of the 14-year mine life. With a US$2.50 per lb. copper price, the internal rate of return was estimated at 44% and the net present value at US$498 million at an 8% discount rate. Payback on capital costs would take 2.4 years.

The study also envisioned a smaller operation without an open pit that would cost US$162 million to develop and have a 12-year mine life.

An earlier 2008 study looked at a 60,000-ton-per-day open pit and underground operation, with much higher capital costs of US$780 million.

As of June 2009 the measured and indicated resource stood at 488 million tons grading 0.58% copper and the inferred resource was 441 million tons grading 0.42% copper, both using a 0.2% copper cut-off and both containing gold and silver byproduct.

For contained iron, the measured and indicated resource stands at 306 million tons grading 30.04% iron and the inferred resource stands at 440 million tons grading 20.67% iron, both using a 10% iron cut-off.

The company expects to have a pre-feasibility study complete by the third quarter.

Nevada Copper recently raised $23.7 million through a bought-deal private placement of 7.8 million shares at $3.05 per share. The company will have 53.1 million shares outstanding once the deal closes. The company now has $28 million in cash that it says should fund expenses well into 2011.

Nevada Copper’s share price was up 12¢ or 5.6% on the day to close at $2.25. The company has a 52-week share price range between 40¢ and $3.57.