Early construction works continue to ramp up at the Pumpkin Hollow underground project, while an optimisation study for the openpit is progressing and is expected to be released in the coming months.
In an operations update on Tuesday, TSX-listed Nevada Copper reported that work was continuing on the completion of the final 237 ft of the existing 1 900 ft shaft and that contractor Cementation was preparing for the ramp up of development mining.
The delivery of the 5 000 t/d underground project, targeting first copper production in 2019, will be the first step in Nevada Copper executing its strategy of “sustainable cash generation with capital efficiency and high project returns, while also maximising options for phased production expansion”, president and CEO Matt Gili commented.
The $182-million underground project will produce 60-million pounds of copper in the first five years of operations, including 9 000 oz of gold and 173 000 oz of silver. Over the entire 13.5-year mine life, yearly output will average 50-million pounds of copper, as well as 8 000 oz of gold and 150 000 oz of silver. The underground operation is expected to generate yearly free cash flow of $80-million a year over the initial five-year period.
Gili reported that the openpit optimisation study, which would be released in the coming months, showed the strong potential benefits of a phased approach to openpit development at an “appropriate time in the future”.
The study, which Golder Associates is working on, targets a reduced capital, higher-return initial openpit phase. Nevada Copper is likely to focus initially on a 30 000 t/d to 40 000 t/d openpit operation and a smaller mining fleet, which will reduce capital expenditure to about half of the amount contemplated in the existing technical study.
Additional pit shell engineering design work would prioritise project returns over scale, including a reduced stripping ratio which, if successful, would allow for significant improvements to preproduction capital and related operating costs.
Meanwhile, Nevada Copper also reported that the 2018 drilling programme was already yielding positive results, including potential further extension of the north pit deposit.