Nevada Copper Corp. (TSX:NCU) ("Nevada Copper" or "Company") is
pleased to announce the results of a National Instrument 43-101
Technical Report Feasibility Study ("Feasibility Study") for its
100%-owned Pumpkin Hollow Copper Project located in Yerington,
Nevada. This Feasibility Study reports the results of a stand-alone
open pit operation (the "Stage 2 Open Pit Operation" or "Stage 2").
The Feasibility Study builds upon the previously released
feasibility studies in February, 2012 and December, 2012 which were
prepared under the direction of Tetra Tech, Inc. ("Tetra Tech"), an
industry leading international engineering firm.
The Feasibility Study confirms the technical and economic
viability of constructing and operating a stand-alone 70,000
ton-per-day open pit copper mining and processing operation. The
Stage 2 Open Pit Operation would be located approximately 4
kilometers west of our 6,500 ton-per-day Stage 1 underground
operation (the "Stage 1 Underground Operation" or "Stage 1") that
is currently under construction. Development of the Stage 1
Underground Operation is supported by a feasibility study filed on
SEDAR in December 2012. The Stage 1 Underground Operation will
initially access ore from the East deposit and, if warranted, the
E2 deposit. With all Stage 1 permits received on September 5, 2013
and a significant portion of project capital funding arranged,
Nevada Copper is advancing towards production from the Stage 1
operation and, subject to receipt of permits and project funding,
construction of the Stage 2 Open Pit Operation.
Production for the Stage 1 Underground Operation is expected to
commence in 2015 with Stage 2 Open Pit Operation targeted for 2016,
subject to the successful passage of the Lyon County Economic
Development Land Bill (the "Land Bill"). It is anticipated that the
Land Bill will be passed by Congress in 2013.
The following positive Stage 2 Feasibility Study results further
support the Company's decision to proceed with a two-staged
development of Pumpkin Hollow as reported in the Company's News
Release dated April 23, 2013.
Upon successfully establishing production from both Stage 1 and
Stage 2 operations, Nevada Copper's projected annual average
production for the first five years will be approximately 285
million pounds of copper; 45,000 ounces of gold, 1.1 million ounces
of silver resulting in annual operating cash-flow of approximately
$500 million which assumes a forward price curve reducing to a long
term price of $2.75 per pound copper.
"The completion of our Stage 2 stand-alone open pit Feasibility
Study is yet another significant milestone achieved by Nevada
Copper since the Company was formed in 2006," commented Giulio
Bonifacio, President and CEO. "We are extremely pleased with these
results as it further confirms that the Pumpkin Hollow project will
support an economically-robust, large copper mine built on a staged
basis which is unlike any other copper project currently in
construction.
Mr. Bonifacio further commented, "It is our view that cash flows
from Stage 1 will enhance the available financing alternatives for
the much larger open pit operation which, once constructed, will
transform Nevada Copper to a mid-tier copper producer. On a
combined basis, Stage 1 and Stage 2 currently represent proven and
probable mineral reserves of approximately 5 billion pounds of
copper and annualized average production in the first five years of
285 million pounds of copper on a project that has an ideal
geographic location with an extremely low risk profile."
Highlights of the Stage 2 Open Pit Feasibility Study (all
amounts are stated in United States dollars):
-- The project development consists of a nominal 70,000 ton-per-day open
pit mining and milling operation;
-- The open pit proven and probable mineral reserves increased from 3.2 to
4.1 billion pounds of copper reflecting a 29% increase. The current
mineral reserves for the precious metals are 717,530 ounces of gold and
26.7 million ounces of silver. Mineral reserves are based on drill data
up to July 2012;
-- First production targeted for 2016, with the mine life expanding from 18
to 22 years. The current open pit mine life is based on increased daily
throughput of 70,000 ton-per day, up from 60,000 ton-per-day previously;
-- The 29% increase in mineral reserves reflects a lower copper price of
$2.80 per pound copper used for the current pit design limit, versus
$3.00 per pound used in the 2012 mineral reserve. The expansion of the
mineral reserves has resulted in a merged North and South open pit. This
has had a positive impact on sustaining capital; moving South pit pre-
stripping out 4 years and reducing equipment needs;
-- Life-of-Mine ("LOM") metal production contained in concentrates totals
3.7 billion pounds of copper - an increase of 29%, 483,476 ounces of
gold and 15.0 million ounces of silver;
-- Average annual copper production in concentrates (amounts reflect
periods of full production):
Years 1 to 5: 221 million pounds per year
Years 1 to 10: 197 million pounds per year
-- Average annual gold and silver production in concentrates (amounts
reflect periods of full production):
Years 1 to 5: 24,089 ounces of gold and 849,300 ounces of silver per
year
Years 1 to 10: 23,320 ounces of gold and 808,870 ounces of silver per
year
-- Initial capital costs are estimated to be $926 million including
contingencies, excluding working capital of $23 million;
-- LOM site operating costs are $9.94 per ton of ore-milled; copper
production costs net of gold and silver credits are:
Years 1 to 5: $1.58 per pound of copper
Years 1 to 10: $1.69 per pound of copper
-- Summary of Economic Results:
1. Base Case: $3.33/lb. copper, $1,376/oz. gold and $23.07/oz. silver:
Pre-tax
Cumulative cash-flow: $3.2 billion
Net Present Value at 5%: $1.5 billion
Net Present Value at 8%: $961 million
Internal Rate of Return: 20.2%
Payback: 4.0 years
After-tax
Cumulative cash-flow: $2.6 billion
Net Present Value at 5%: $1.2 billion
Net Present Value at 8%: $726 million
Internal Rate of Return: 17.9%
Payback: 4.3 years
2. Alternate Case (1): Quoted forward prices to 2023 declining to long term
of $2.75/lb. copper; gold declining to long term $1,100/oz. and silver
declining to long term $20.00/oz.:
Pre-tax
Cumulative cash-flow: $2.2 billion
Net Present Value at 5%: $1.1 billion
Net Present Value at 8%: $733 million
Internal Rate of Return: 20.0%
Payback: 3.7 years
After-tax
Cumulative cash-flow: $1.9 billion
Net Present Value at 5%: $888 billion
Net Present Value at 8%: $550 million
Internal Rate of Return: 17.4%
Payback: 4.1 years
3. Alternate Case (2): Three year trailing average price of $3.71/lb.
copper, $1,550/oz. gold and $30.50/oz. silver:
Pre-tax
Cumulative cash-flow: $4.6 billion
Net Present Value at 5%: $2.3 billion
Net Present Value at 8%: $1.6 billion
Internal Rate of Return: 26.4%
Payback: 3.0 years
After-tax
Cumulative cash-flow: $3.6 billion
Net Present Value at 5%: $1.8 billion
Net Present Value at 8%: $1.2 billion
Internal Rate of Return: 22.9%
Payback: 3.5 years
4. Average annual operating cash-flow (Years 1 to 5):
Base Case: $346 million
Alternate Case (1): $368 million
Alternate Case (2): $426 million
Project Opportunities
Project opportunities that will further enhance the economic
value of the Pumpkin Hollow project will be included in future mine
designs and would reflect the following:
Resource/Reserve expansion
The 29% increase in mineral reserves incorporated the results of
a further 44,000 meters of drilling from the previously published
mineral reserve in February 2012. This drilling resulted in the
merging of the North and South open pits producing improvements in
pit scheduling and equipment utilization.
Subsequent drilling has encountered new mineralization and
extensions, particularly along the south border of the North open
pit deposit. Mineralization outside the North and South current pit
design limit continues to be intersected and remains open. Drill
Hole NC 12-34 which is not included in the current mineral resource
and reserve intersected 690 feet (210.3 meters) grading 1.17%
copper and is located along the southern edge of the current North
pit.
Further drilling is being planned and expected to expand the
current mineral resources and reserves at the project which will
have a further positive effect on the strip ratio and
economics.
Iron
A magnetite separation plant was not considered for the process
circuit as initially contemplated, as mining the iron-rich South
deposit has been delayed from year 8 to year 14 as a result of the
increased mineral reserves in the North Deposit. While this
represents a significant opportunity (See Iron Mineral Resource
Summary below), the Company has determined that this study will be
deferred as the North deposit still warrants additional drilling
which may further delay access to the iron-rich South deposit.
Updated costs, mine design, marketability, and additional iron
metallurgical testing will be reviewed in the future. Though not
considered in the Feasibility Study, should the inclusion of iron
in the mine operation prove to be economic it is expected to
greatly improve strip ratios and project economics as iron bearing
material is currently considered waste in the Feasibility Study
mine plan.
Permits and Land Transfer
The Pumpkin Hollow project is located on both on private land,
and on unpatented mining claims located on Bureau of Land
Management ("BLM") administered federal lands ("Federal Lands").
The City of Yerington (the "City") has proposed to acquire the
Federal Lands ("Land Transfer") at fair market value. Nevada Copper
has agreed to collaborate with the City to support the Land
Transfer. If successful, the Land Transfer would convey all Federal
Lands associated with the project from BLM jurisdiction to the
City. This would allow the City to receive a portion of both
property tax and Nevada net proceeds tax. It would also provide
additional lands around the project for sustainable development,
including current and long-term, post-mining commercial and
industrial development, recreational opportunities, and expansion
of community and cultural events. Subject to successful completion
of the Land Transfer in 2013, all project permitting would come
under the jurisdiction of the State of Nevada and the City, with
receipt of permits targeted in 2014.
In the event the Land Transfer is not completed as anticipated
the project activities would require a Plan of Operations with the
BLM and compliance with the National Environmental Policy Act of
1969 ("NEPA"). NEPA compliance would entail preparation of an
Environmental Impact Statement ("EIS") pursuant to BLM
guidelines.
Regardless of the land status and permit process, the
environmental, engineering and baseline technical studies
associated with the entire project are either completed or in
progress and will conform to all Federal, State and local
standards. This will assure that the project is designed,
constructed and operated to meet those standards and that either
permitting process, including preparation of an EIS, would not be
delayed. If BLM approval is required, BLM process and State permits
for the project would be expected to be complete in 2016.
Development Schedule
For the Stage 2 Open Pit Operation, pre-stripping the North
deposit and construction of the mill and related facilities will
commence in 2015 assuming all development permits have been
obtained. Production is anticipated to commence in 2016.
The Stage 1 Underground Operation is located approximately 4
kilometers east, received all its required permits in September
2013 and is currently under construction. A 2,200 foot, 24 foot
diameter production-sized shaft is being sunk to access the East
underground deposit with further development to the E2 deposit if
warranted. Detailed engineering and ordering of key long-lead-time
mining and process equipment is currently in progress.
Mineral Resources
The project mineral resource was prepared by the mineral
resource and mining division of Tetra Tech, incorporating the
results of drilling up to July 2012 for the Feasibility Study. This
resource was an update of a previous mineral resource estimate
disclosed in September, 2012.
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Measured and Indicated Resources - Open-Pit Deposits
---------------------------------------------------------------------------
Copper
Cut- Copper Gold Silver
Category off Tons Grade Copper Grade Gold Grade Silver
---------------------------------------------------------------------------
lbs. Ozs. Ozs.
% (000's) % (000's) Oz./ton (000's) Oz./ton (000's)
---------------------------------------------------------------------------
Measured 0.20 186,037 0.48 1,793,250 0.002 331 0.056 10,465
---------------------------------------------------------------------------
Measured 0.15 237,915 0.41 1,954,874 0.002 369 0.051 12,015
---------------------------------------------------------------------------
Indicated 0.20 348,389 0.43 3,023,109 0.001 467 0.052 18,200
---------------------------------------------------------------------------
Indicated 0.15 494,141 0.35 3,493,351 0.001 568 0.046 22,651
---------------------------------------------------------------------------
---------------------------------------------------------------------------
M & I Total 0.20 534,426 0.45 4,816,359 0.001 798 0.054 28,665
---------------------------------------------------------------------------
M & I Total 0.15 732,056 0.37 5,448,225 0.001 937 0.047 34,666
---------------------------------------------------------------------------
Mineral resources that are not categorized as mineral reserves have not
demonstrated economic viability.
The mineral resource estimate was performed by or under the
direction of Rex Bryan, Ph.D, Tetra Tech's Mineral Resource
Division Senior Geostatistician. Dr. Bryan is an independent
Qualified Person as set forth by Canadian National Instrument
43-101 ("NI 43-101").
The following Inferred Resources are in addition to the Measured
and Indicated Resources:
---------------------------------------------------------------------------
Inferred Resources - Open-Pit Deposits
---------------------------------------------------------------------------
Copper
Cut- Copper Gold Silver
Category off Tons Grade Copper Grade Gold Grade Silver
---------------------------------------------------------------------------
lbs Ozs. Ozs.
% (000's) % (000's) Oz./ton (000's) Oz./ton (000's)
---------------------------------------------------------------------------
Inferred 0.20 138,149 0.40 1,103,536 0.001 134 0.044 6,134
---------------------------------------------------------------------------
Inferred 0.15 225,073 0.31 1,392,266 0.001 198 0.039 8,755
---------------------------------------------------------------------------
Mineral resources that are not categorized as mineral reserves have not
demonstrated economic viability.
Mineral Reserve
Proven and Probable mineral reserves are the
economically-mineable portions of the Measured and Indicated
mineral resources above, respectively, as demonstrated by the
Feasibility Study. The current reserves have increased the open pit
reserves from 3.2 to 4.1 billion pounds representing a 29%
increase. A base price of $2.80 per pound copper was used for the
current pit design limit as compared to $3.00 per pound copper in
2012. The proven and probable reserves at Pumpkin Hollow are
summarized below:
----------------------------------------------------------------------------
Mineral Reserves - Open Pit Deposits: As of October 2013
----------------------------------------------------------------------------
Contai- Contai- Contai-
ned ned ned Copper
Classification Ore Copper Gold Silver Copper Gold Silver Equiv.
--------------------------------------------------------------
000's Oz./ Oz./ Billion 000's
tons % ton ton lbs. Ozs. Ozs. %
----------------------------------------------------------------------------
Proven 204,182 0.409 0.0015 0.052 1.67 306,610 10,685 0.44
----------------------------------------------------------------------------
Probable 344,004 0.358 0.0012 0.047 2.46 410,920 16,009 0.39
----------------------------------------------------------------------------
Proven &
Probable 548,186 0.377 0.0013 0.048 4.13 717,530 26,694 0.40
----------------------------------------------------------------------------
The mineral reserves and mine plans for each of the open pit deposits was
determined using cutoff grades developed by Tetra Tech as appropriate for
the mining method and costs associated with the deposits. For the open pit
North and South deposits the cutoff grade used was 0.175% and 0.179% copper
respectively. The breakeven cutoff was calculated using $2.80 mining cost
while the internal cutoff was calculated using $3.00 copper. Ed Lips,
Principal Mining Engineer for Tetra Tech is the independent Qualified Person
who is responsible for the mineral reserve estimate. The copper equivalency
was determined using Base Case metals prices and metallurgical recoveries of
89.3%, 67.3% and 56.3% for copper, gold and silver respectively.
Resources Outside Current Pit Design Limit
The following table summarizes the measured and indicated
resources that remained outside the current pit design limit at the
time of the drill data cutoff for the resource calculation up to
July 2012. The resources outside the current pit design limit are
not included in the mineral reserves.
----------------------------------------------------------------------------
Measured and Indicated Resources Remaining Outside the Current Pit Design
Limit
----------------------------------------------------------------------------
Copper Gold Silver
Tons Grade Copper Grade Gold Grade Silver
----------------------------------------------------------------------------
lbs Ozs. Ozs.
(000's) % (000's) Oz./ton (000's) Oz./ton (000's)
----------------------------------------------------------------------------
Measured 39,535 0.328 259,730 0.0014 55.8 0.037 1,459
----------------------------------------------------------------------------
Indicated 180,818 0.290 1,048,013 0.0010 168.1 0.041 7,448
----------------------------------------------------------------------------
M & I Total 222,353 0.291 1,307,743 0.0011 223.9 0.040 8,907
----------------------------------------------------------------------------
Drilling has continued since the reserve and resource drill
cutoff date. Additional mineralization outside the North and South
current pit design limit continues to be intersected and remains
open.
Iron Mineral Resource
Though not considered in the Feasibility Study, the Pumpkin
Hollow project also has considerable resources of iron in the form
of magnetite. The following tables include only those iron
resources amenable to open-pit mining methods in the North and
South deposits. Possible mining, recovery and sale of a magnetite
concentrate will be considered in future studies.
If an updated feasibility study demonstrates the iron resource
to be economically viable, inclusion of iron in the open pit block
model values is expected to significantly expand the size and
tonnage of the North and South open pits, and lower waste tonnages
and strip ratio.
----------------------------------------------------------------------
Iron Resources
----------------------------------------------------------------------
Iron Iron Tons
Category Cut-off Tons Grade Iron
--------------------------------------------------------
% (000's) % (000's)
----------------------------------------------------------------------
Measured 20 242,957 32.8 79,738
----------------------------------------------------------------------
Measured 30 133,890 39.4 52,737
----------------------------------------------------------------------
----------------------------------------------------------------------
Indicated 20 152,265 31.0 47,216
----------------------------------------------------------------------
Indicated 30 98,065 39.0 26,566
----------------------------------------------------------------------
----------------------------------------------------------------------
M&I Total 20 395,222 32.1 126,954
----------------------------------------------------------------------
M&I Total 30 231,955 39.1 79,303
----------------------------------------------------------------------
----------------------------------------------------------------------
Inferred 20 118,334 29.0 34,270
----------------------------------------------------------------------
Inferred 30 39,392 39.5 15,556
----------------------------------------------------------------------
Mineral resources that are not categorized as mineral reserves have not
demonstrated economic viability.
Mining
The stand-alone open pit deposits will be developed sequentially
starting with 1 1/2 years of pre-stripping the North deposit. Open
pit mill feed will come exclusively from the North deposit until
year 12 when ore from the South deposit is added and is expected to
eventually replace all North ore by the end of year 14. The current
design pit limit will combine the two deposits into a single merged
pit with an initial mine life of 22 years based on the current
reserve.
The initial loading fleet will consist of three 43 to 45 cubic
yard electric cable shovels and one 27 to 31 yard shovel excavator.
The ore and waste haulage fleet will consist of 13 plus 350-ton
electric or diesel haul trucks. The ore will transported from the
pit via an in-pit crusher-conveyor system and the waste will be
hauled.
Average strip ratios for the North and South deposits
respectively 3.7 to 1, which includes the North and South deposit
pre-strip.
Total ore mined and processed from the open pits, LOM, is 548.2
million tons grading 0.38% copper, 0.0013 oz./ton (0.045 g/tonne)
gold and 0.048 oz./ton (1.65 g/tonne) silver.
Process Plant
Ore will be transported from the open pit to a nominal 70,000
tons-per-day concentrator located west of the open pits. A large
semi-mobile in-pit crusher will reduce ore size before conveyance
to the process facility. The concentration circuit is conventional
with a single, large semi-autogenous grinding mill and secondary
ball mill grinding and flotation of copper sulphide, followed by
thickening and pressure filtration to produce a final copper
concentrate grading 25.5% copper and containing payable gold and
silver. The Bond Work index ranges between 12.5 to 13.7 and the
Abrasion Index ranges between 0.230 and 0.263. Primary grind size
is 150 microns with an overall copper recovery of 89.3%. Gold and
silver recoveries to the copper concentrates are 67.3% and 56.3%
respectively.
Copper Concentrates
Projected assays for the copper concentrates produced from the
North and South deposits are summarized below. Further
metallurgical work will be performed focused on ores from the early
years of production from the North deposit. Concentrates are
expected to average 25.5% copper with payable levels of gold and
silver. The concentrates contain no deleterious elements that would
materially affect marketability.
Concentrates will be shipped by rail from to a west coast port
facility then principally to Asian markets. Union Pacific tracks
run approximately 13 miles north of the project.
Metals Production
Projected metals production to the copper concentrate is
summarized below.
--------------------------------------------------------------------------
Years 1-5 Years 1-10 LOM
Annual Annual Annual LOM
Description Units Average Average Average Total
--------------------------------------------------------------------------
Copper Concentrate 000's 434 385 337 7,239
Tons/year
Copper in Million 221 197 172 3,692
Concentrate lbs./year
Copper in 000s 110.6 98.3 85.9 1,846
Concentrate Tons/year
Gold in Cu Oz/year 24,089 23,322 22,487 483,476
Concentrate
Silver in Cu Oz/year 849,300 808,870 699,000 15,026,000
Concentrate
--------------------------------------------------------------------------
Tailings Storage
To minimize water usage, tailings will be de-watered, filtered
and conveyed to a "dry-stack" on-site tailings storage facility
("TSF"). This water is then recycled to the process plant. This
method is considered "best practice" for long term tailings storage
in dry environments with finite water resources. It also lowers
long term environmental monitoring costs. The TSF will effectively
be an expansion of the Stage 1 project TSF.
Infrastructure
The project area is well supplied with nearby local
infrastructure. Project-related infrastructure expenditures include
a new 6 mile (10km) 120kV power line and related substation. An
energy cost of $0.055/kwh was used for Feasibility Study purposes,
based on NV Energy expected rates. A 5-mile (8 km) mine access road
connects the site to state Highway 95 to the North, and a rail
load-out facility located on Union Pacific tracks. The rail tracks
run approximately 13 miles (21 km) north of the project and connect
with Union Pacific mainline tracks for connection to west coast
ports. Process make-up water will be piped 6 miles (10 km) from the
City of Yerington, county seat for Lyon County, where housing and
regional services are available and most employees are expected to
reside. The communities of Silver Springs, Smith Valley, Fernley,
Dayton, Fallon, Carson City and Hawthorne are also all within
commuting distance, and have a labor pool and existing housing,
particularly for a construction workforce.
Capital Costs
The project initial capital costs are estimated at $926.6
million with an accuracy of plus/minus 15% as of September 2013,
including a contingency of $46 million. The contingency allowance
is calculated based on assessed factors for each of the major
Direct and Indirect cost categories. The major direct cost items
include North deposit pre-stripping, process plant, tailing storage
facility, site infrastructure and offsite rail load-out facility.
Indirect costs include such major areas as engineering and
procurement, construction management, freight and commissioning,
spares inventory, first fills, and owner's costs.
----------------------------------------------------------------
Initial Capital Costs
----------------------------------------------------------------
US$ Millions
----------------------------------------------------------------
Direct Costs
Pre-Strip $158.6
Surface Mine Development 127.2
Process and concentrates handling 292.8
Tailings Dewater & Dry Stack Facility 59.1
Other capitalized pre-production costs 5.2
Infrastructure 75.6
Environmental & Reclamation 8.6
Water Management 9.2
----------------------------------------------------------------
Total Direct Costs $736.3
----------------------------------------------------------------
----------------------------------------------------------------
Indirect Costs
Engineering & Procurement 26.4
Construction Management 26.4
Surface Mine Development 3.0
Process and concentrates handling 59.9
Tailings Dewater & Dry Stack Facility 5.8
Infrastructure 11.1
Environmental, Reclamation & Water 0.9
Owner's & Personnel Costs 10.8
----------------------------------------------------------------
Total Indirect Costs 144.3
----------------------------------------------------------------
Total Direct and Indirect Costs $880.6
----------------------------------------------------------------
Contingency 46.0
----------------------------------------------------------------
Total Initial Capital $926.6
----------------------------------------------------------------
Net working capital required for initial operations is estimated
to be $23 million.
LOM sustaining capital totals $758 million, of which $425
million is incurred beyond Year 5, includes development of the
South open pit deposit development costs; replacement of, and
additions to, surface mobile equipment; lease costs for the initial
mining fleet; reclamation costs; and expenditures on the tailings
storage facility.
The merging of the North and South pits, along with an expanded
North deposit reserve, has produced positive results in mine
scheduling. The South deposit pre-stripping has been pushed from
year 6 to year 10 and a second in-pit crusher has been
eliminated.
----------------------------------------------------------------
LOM Sustaining Capital
----------------------------------------------------------------
Area $Millions
----------------------------------------------------------------
Surface Mine
Mine equipment $331.3
In-pit Crushing & Conveying 79.1
General surface mobile equipment 26.4
Access, site preparation and facilities 2.5
Ore Handling 4.9
Process 183.9
Tailings 81.7
Reclamation 41.6
Hydrology / Dewatering 6.5
----------------------------------------------------------------
Total Sustaining Capital $757.9
----------------------------------------------------------------
Operating Costs
LOM site unit operating costs, net of capitalized pre-stripping
and other predevelopment costs, are $9.94 per ton-milled, as
summarized in the table below:
----------------------------------------------------------------
LOM Unit Operating Cost Summary
----------------------------------------------------------------
Area LOM
$/ton-milled
----------------------------------------------------------------
Mining $4.36
Processing 5.10
Dry-stack Tailings Facility 0.16
Reclamation, Infrastructure, Hydrology. 0.01
General & Administrative 0.31
----------------------------------------------------------------
Total $9.94
----------------------------------------------------------------
Copper production costs per pound including site operating costs
and copper smelter charges and concentrate transport, net of gold
and silver credits, and excluding royalty, are estimated to average
$1.58/lb. for Years 1 to 5 and $1.69/lb. for Years 1 to 10.
Economic Analysis Summary
The project economics were evaluated using a cash flow analysis,
whereby revenues and costs are projected into the future on an
annual basis. Annual net cash flows are then discounted at a rate
of interest to reflect the time value of money to yield a Net
Present Value ("NPV"). The analysis includes all site operating
costs, smelter charges and transport costs, royalties, estimated
local property taxes, Nevada Net Proceeds of Mining tax, and an
estimate of U.S. Federal corporate income taxes. There are no
Nevada corporate income taxes.
The most significant input which affects project economics are
projected future metals prices. The following three metal price
scenarios were used:
1. Base Case: This assumed spot metals prices as of August 22, 2013
a. Copper: $3.33 per pound
b. Gold: $1,376 per ounce
c. Silver: $23.07 per ounce
2. Alternate Case (1):
Copper: Long term forward prices as of August 22, 2013, supplied
by LME, were used. These forward prices are available to 2023, and
thereafter copper prices were reduced to a long term price of $2.75
per pound - See table below.
---------------------------------------------------------------------------
Year 2016 2017 2018 2019 2020 2021 2022 2023+
---------------------------------------------------------------------------
Copper Price $3.41 $3.43 $3.43 $3.44 $3.44 $3.44 $3.24 $2.75
---------------------------------------------------------------------------
Gold Price $1,433 $1,467 $1,521 $1,569 $1,457 $1,338 $1,100 $1,100
---------------------------------------------------------------------------
Silver Price $24.44 $24.71 $24.99 $23.80 $22.53 $21.27 $20.00 20.00
---------------------------------------------------------------------------
3. Alternate Case (2):
Three year trailing average London Metal Exchange ("LME") prices
were used determined as of mid-August, 2013 and are as follows:
a. Copper: $3.71 per pound
b. Gold: $1,550 per ounce
c. Silver: $30.50 per ounce
Summary of Economic Results
Key economic indicators extracted from the Feasibility Study are
summarized below:
--------------------------------------------------------------------------
Alternate Alternate
Base Case Case (1) Case (2)
---------------------------------------------
US$ Millions US$ Millions US$ Millions
--------------------------------------------------------------------------
Cumulative pre-tax cash-flow $3,233 $2,243 $4,594
NPV@ 5%, pre-tax $1,524 $1,124 $2,314
NPV@ 8%, pre-tax $961 $733 $1,557
--------------------------------------------------------------------------
Cumulative after-tax cash-
flow $2,606 $1,851 $3,612
NPV@ 5%, after-tax $1,196 $888 $1,784
NPV@ 8%, after-tax $726 $550 $1,172
--------------------------------------------------------------------------
Average annual operating
cash-flow (Years 1 to 5) $346 $368 $426
--------------------------------------------------------------------------
Internal rate of return, pre-
tax after tax 20.2% 20.0% 26.4%
Internal rate of return,
after-tax after tax 17.9% 17.4% 22.9%
Payback pre-tax (years from
first production) 4.0 3.7 3.0
Payback after-tax (years from
first production) 4.3 4.1 3.5
--------------------------------------------------------------------------
Royalties and Nevada Mining Taxes - The economic results include
the costs of all third party royalties, and an estimate of local
property taxes and Nevada Net Proceeds Tax payable on income from
operations. Nevada has no corporate income taxes. Federal corporate
income taxes are estimated for a fully taxable company with a
single, standalone project.
Qualified Persons
The scientific and technical information in this release has
been reviewed and approved by Ed Lips, P.E., of Tetra Tech, overall
manager for the Feasibility Study. Mr. Lips is an Independent
Qualified Person within the meaning of NI 43-101.
This release was also reviewed by Gregory French, P.G.,
Vice-President & Senior Project Manager of Nevada Copper and
Robert McKnight, P. Eng., Executive Vice-President and CFO of
Nevada Copper, both of whom are Non-independent Qualified Persons
within the meaning of NI 43-101.
Readers should refer to the Feasibility Study NI43-101 Technical
Report for further details of the project development. The
Feasibility Study Technical Report will be filed in accordance with
NI 43-101 on SEDAR (www.sedar.com) within the required 45 day
statutory period and will be made available on Nevada Copper's
website (www.nevadacopper.com).
An updated PowerPoint presentation will be available on the
Nevada Copper website.
NEVADA COPPER CORP.
Giulio T. Bonifacio, President & CEO
We seek safe harbor.
Contacts: Nevada Copper Corp. Eugene Toffolo VP, Investor
Relations & Communications 604-683-8266 or Toll free:
1-877-648-8266etoffolo@nevadacopper.com Nevada Copper Corp. Robert
McKnight, P.Eng., MBA Executive Vice President & CFO
604-683-1309bmcknight@nevadacopper.com
Nevada Copper (TSX:NCU)
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