Nevada Copper reports economics on Pumpkin Hollow

A preliminary economic assessment of Nevada Copper‘s (NCU-T) 100% owned Pumpkin Hollow copper property southeast of Reno in Nevada reports an internal rate of return of between 20.5% and 29.3%, the company says.

The PEA evaluated an integrated underground and open pit mining operation with a standard milling and floatation plant that would produce high-grade copper concentrates about 20 km southeast of the small town of Yerington in Lyon County.

Described as the high grade copper/magnetite skarn associated with a cluster of copper porphyry deposits in western Nevada’s Walker Lane mineralized belt, Pumpkin Hollow contains measured and indicated resources totaling 4 billion lbs of copper and an additional inferred resource of 3.9 billion lbs copper, using a 0.2% copper cutoff grade.

The study found that annual production at the advanced development stage copper property would average 95,000 tons of copper per year over a mine life of more than 20 years.

At copper prices of $1.75 to $3.00 per lb. the PEA found a net present value of US$2.6 billion to US$6.3 billion with a 0% discount rate and a net present value of US$765 million to US$1.9 billion with an 8% discount rate.

Capital costs were estimated to come in at about US$780 million, including working capital and contingencies payback from the start of construction will take between 3.1 and 4.8 years.

Total operating costs would be about US$1.02 per lb. copper, net of by-product credits, the PEA noted.

The operation likely would have a 60,000 ton per day concentrator throughput. Metallurgical recoveries were estimated at 89% for copper, 70% for gold and 68% for silver.

Nevada Copper said the new numbers warrant a definitive feasibility study for the large, high-grade copper resource.

The deposit was discovered in 1960 by U.S. Steel using airborne magnetics. Over the next 30 years, U.S. Steel, Anaconda Copper and other major mining companies delineated a large copper and magnetite resource from over 590,000 feet of drilling.

Nevada Copper currently trades at about $2.90 a share and has a 52-week trading range of $1.55 to $3.85. The company has 37 million shares outstanding and is well financed with no debt.