Pumpkin Hollow grows for Nevada Copper

Vancouver – Nevada Copper (NCU-T) has been rewarded for its 26,600-metre drilling effort last year with a significant resource boost at its Pumpkin Hollow iron oxide-copper-gold property in Nevada.

Pumpkin Hollow’s six deposits now host 443 million measured and indicated tonnes grading 0.58% copper, 0.069 gram gold per tonne, and 2.37 grams silver per tonne. Inferred resources add 400 million tonnes averaging 0.42% copper, 0.036 gram gold, and 1.65 grams silver.

Total contained copper now sits at 9.3 billion lbs., an increase of 1.4 billion lbs. over the last estimate, which was calculated in late 2007. The gold count is now almost 1.5 million oz. and the delineated silver comes in close to 55 million oz.

Nevada Copper plans to use the new estimate to update it preliminary economic assessment (PEA) for Pumpkin Hollow. The initial came out in early 2008 and determined that, at a copper price of US$1.75 per lb., an integrated open pit and underground operation at Pumpkin Hollow carries a net present value of US$784 million (at a 5% discount rate) and a 24% internal rate of return. Work on the update has already begun.

Pumpkin Hollow sits just southeast of the small town of Yerington, in Lyon County, and is accessible by paved roads. It is an area familiar with copper mining – Anaconda Copper operated an open pit mine across the valley from Pumpkin Hollow from 1953 to 1978, producing 2 billion lbs. copper.

The property, a high-grade iron oxide-copper-gold chalcopyrite-magnetite skarn, is part of the Walker Lane mineralized trend. The blind deposits were discovered in 1959 using airborne magentics data. Prior to Nevada Copper acquiring the project in 2005, Pumpkin Hollow had already seen more than 180,000 metres of drilling. For its part, Nevada Copper has completed another 45,000 metres to date.

The company envisions a 60,000-ton-per-day operation producing 95,000 tons of copper annually. Under current design plans, the Eastern deposits will share a common underground access and the Western deposits will have a common open pit high wall. The deposits are all within 1.5 km.

Nevada Copper still sees potential to expand all of the deposits at Pumpkin Hollow. The open-pittable Western deposits comprise the North, South, and Southeast deposits. The North is the best drilled and understood deposit on the property but it is still open to the south, where step-out hole 08-20 returned 236 metres grading 1.03% copper, and to the east, where step-out hole 08-35 cut 50.8 metres of 0.45% copper.

Work at the South deposit, which was originally considered an iron target and therefore saw wide-spaced drilling, has focused on infill drilling. The deposit remains open to the north and southwest. And the Southeast deposit, a small, shallow resource, remains open to the southwest.

The Eastern deposits include that East and E2 deposits; both are underground-mining targets and carry considerably higher grades than the zones to the west. Mineralization in the East deposit occurs in large mantos that each contain several high-grade cores. Several mantos remain open and Nevada Copper says testing their extensions will be one foci in the next phase of drilling. One of the high-grade cores, for example, along the northern boundary of the East deposit returned 38 metres of 3.24% copper.

The E2 zone is very similar to the East zone except that the mantos at E2 have been rotated such that the beds dip steeply. Mineralization remains open along strike to the southwest and down dip.

Pumpkin Hollow is also home to a considerable iron ore deposit that also saw its resource updated. At a 20% iron cut-off grade, measured and indicated resources total 190 million tonnes grading 37.3% iron; inferred resources contribute 138 million tonnes grading 33.8% iron. The company says this stand-alone iron resource will enable it to assess the commercial viability of Pumpkin Hollow’s large iron by-product. The iron is found within and contiguous to the Western deposits and occurs primarily as magnetite. Historical metallurgical testwork indicates it is amenable to standard processing into pellet feed concentrate.

Nevada Copper just closed a US$2-million financing deal with Zhongtiaoshan Non-ferrous Metals, which loaned the funds by way of a convertible debenture.

The company’s share price gained 16¢ on news of the resource increase to close at 93¢. Nevada Copper has a 52-week trading range of 16.5¢ to $1.94 and has 41 million shares outstanding.