Study shows Pumpkin Hollow economic

A preliminary economic assessment of Nevada Copper’s (NCU-T) 100%-owned Pumpkin Hollow copper property southeast of Reno, in Nevada, predicts an internal rate of return of between 20.5% and 29.3%, the company says.

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

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 totalling 4 billion lbs. copper plus inferred resources of 3.9 billion lbs. copper, using a 0.2% copper cutoff grade.

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

At copper prices of US$1.75-3 per lb., the study predicts a net present value of US$2.6-6.3 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 at about US$780 million, including working capital and contingencies, while payback from the start of construction is expected to take between 3.1 and 4.8 years.

Total operating costs would be about US$1.02 per lb. copper, net of byproduct credits, the study noted.

The operation would likely 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 more than 590,000 ft. of drilling.

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