Nevada Copper (TSX: NCU; US-OTC: NEVDF) has tabled a new preliminary economic assessment (PEA) suggesting an open pit mine at its Pumpkin Hollow copper project in Nevada, where the company is already part-way through constructing an underground mine.
The PEA consists of two phases. The first would cost an initial US$592 million and include a plant capable of processing 33,500 tonnes per day. It would focus on mining the project’s high-grade Northern Pit, using the South Pit as supplementary feed.
That phase would have a $567 million after-tax net present value (NPV) at a 7.5% discount rate with an 18% after-tax internal rate of return (IRR). The project would process 12.2 million tonnes per year over a 16-year mine life at all in sustaining costs of US$2.01 per lb. copper.
The PEA includes the option to expand to a second phase that would increase production to 63,500 tonnes per day in year eight for US$447 million. The second phase would increase the after-tax NPV to US$927 million at a 7.5% discount rate and the after-tax IRR to 19%. It would extend the mine life to 21 years and produce an average 177 million lb. copper per year.
Pumpkin Hollow’s proposed open pit contains 360 million measured and indicated tonnes grading 0.48% copper, 0.03 gram per tonne gold and 1.87 grams silver. The project’s proposed underground mine contains 21.6 million proven and probable tonnes grading 1.59% copper, 0.18 gram gold and 4.34 grams silver for 758.9 million lb. copper, 153,000 oz. gold and 3.33 million oz. silver.
The company expects its underground operation to begin commissioning in 2019’s fourth quarter and hit 4,500 tonnes per day by mid-2020.
Shares of Nevada Copper are currently trading at 52¢ with a 52-week range of 44¢ to 84¢. The company has a $343 million market capitalization.