With the continuing shift to renewable energy sources and lower carbon emissions, global demand for copper is rising. Some analysts predict that demand could increase by as much as 43% over the next 15 years.
But there are concerns about the sector, with sizeable deficits forecast as existing mines face reduced capacity and slowing production. For instance, producers in Chile and Peru – the two main sources for copper – have faced civil unrest, declining output and lower ore grades. To make matters worse, the current pipeline of global copper projects is at the lowest point in this century.
For Vancouver-based Nevada Copper Corp. (TSX: NCU), this makes the debut of its Pumpkin Hollow project all the more timely. The company owns and operates the mine, which is located near the community of Yerington, in western Nevada. In December 2019, Nevada Copper announced it had produced its first concentrate.
According to Matt Gili, Nevada Copper’s chief executive officer, this marks an important milestone not just for the company, but also for the United States.
“I am delighted that Pumpkin Hollow has commenced concentrate production, making it the first new copper producer in the U.S. in over a decade,” he says. “This is a transformational moment for Nevada Copper.”
When production at the project’s processing plant started on December 16, it was the culmination of an expedited business plan that saw construction of the underground mine begin less than a year and half ago.
Based on its latest prefeasibility study, Nevada Copper projects the 5,000-ton-per-day underground mine to produce 50 million lb. copper, 8,000 oz. gold and 150,000 oz. silver annually over its modelled 13.5-year mine life.
Annual output over the underground mine’s first five years is modelled slightly higher at 60 million lb. copper, 9,000 oz. gold and 173,000 oz. silver. Proven and probable reserves (for the underground mining stage) are pegged at 23.9 million tons grading 1.59% copper, with minor gold-and-silver credits.
“Commencement of production is monumental for Nevada Copper, but is just the first key milestone for the company,” Gili says. “Pumpkin Hollow has multiple avenues for growth, including an advanced-stage, large-scale open pit project and significant regional exploration targets.”
Gili points out that the underground operation has the advantage of generating cash flow that potentially can be used to advance the fully permitted, open-pit project, as well as to fund exploration activities.
Nevada Copper’s open pit project is less than 4 km from the underground operation. The company models an average output of 163 million lb. copper production annually over 19 years of the open pit mine’s operational life, with proven and probable reserves of 386 million tons grading 0.47% copper, plus minor gold-and-silver credits.
The company envisions an open-pit mine plan starting at 37,000 tons per day in 2023, followed by a potential expansion to 70,000 tons per day. The estimated initial capital build cost is US$672 million, with another US$473 million in estimated capital costs required for the expanded operation.
Concurrent with news of concentrate production, the company also announced the identification of multiple new copper targets at Pumpkin Hollow, and the intersection of shallow copper mineralization of grades up to 0.9% copper in structural reconnaissance drill results. These include indicators of a potential porphyry-style target and grab samples as high as 6.2% copper at surface. These results came from a drilling program that occurred within 2 km of the current underground mine.
“Exploration results to-date have been extremely encouraging, with multiple new targets identified across our large property,” says Gili. “Although our exploration program is at an early stage, we are very encouraged to have hit mineralization with porphyritic signatures in multiple holes.”
Guided by these regional geological analyses, Nevada Copper expanded its strategic land package across the Yerington district in 2019. The company added over 5,700 hectares to their land holdings, an increase of 30% that now encapsulates a majority of the re-emerging U.S. copper camp in the Eastern Yerington part of the state.
Nevada Copper’s success represents the dream of many juniors to make a discovery and use it to mature into a broader, more diversified entity. But according to Gili, Pumpkin Hollow is the result of a methodical business plan guided by a team of seasoned veterans and senior executives from some of the world’s largest mining companies.
“Having transitioned to producer status, our primary focus in the first half of 2020 will be ramping up to full commercial production. However, we will also continue advancing our open pit project and our regional exploration strategy,” Gili says. “It is pleasing to continue to see that our successes to date are in line with this strategy and we look forward to working closely with our community as we invest in the development of Yerington, Nevada.”
At press time in Toronto, Nevada Copper’s shares were trading at 35¢ within a 52-week range of 19¢ and 53¢. The company has 762 million common shares outstanding for a market cap of $274 million.
— The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by Nevada Copper Corp. and produced in cooperation with The Northern Miner. Visit www.nevadacopper.com for more information.