Nevada Copper Corp.

Nevada Copper—Near-Term Production of Large-Scale Copper Project in Nevada

This profile is part of a paid investor education campaign.*

Overview

Nevada Copper (TSX:NCU) owns the  Pumpkin Hollow copper project in Nevada, USA – one of the World’s top-rated mining jurisdictions. Pumpkin Hollow is the only large-scale copper project in the US that is fully permitted within the US and initial production is expected in 2019. The property hosts two deposits – one underground and one open pittable. Nevada Copper is fully-funded and is well positioned to become the World’s next copper producer and expects to enter a copper market with a looming supply deficit and rising prices.

The Company has re-engineered the underground development to reduce CAPEX and bring the project into production faster. The open pit development is also undergoing re-engineering.

Nevada Copper is run by a management team of highly-experienced mine builders, led by Matt Gili, and is supported by a team of board members that includes Tom Albernese, former CEO of Rio Tinto, and Ernie Nutter, former managing director of RBC Capital Markets. The company is also supported by a number of institutional investors including Pala Investments Limited, a long-term cornerstone investor of the company.

The property’s two copper-gold-silver assets are outlined in the company’s 2017 NI43-101 Technical Report.  This TR discloses: A) a Prefeasibility level Study (PFS) on a 5,000 tons/day underground operation; and, B) a Feasibility-level Study (FS) for an integrated open-pit and underground production of 70,000 tons per day.

The company plans to bring the underground project to production first, during which time it will continue to advance evaluations of a smaller, enhanced open-pit project, using revenue from the former to fund the latter. Once both project streams are underway, integrated production has the potential to be in excess of 250 million pounds of copper per year.

Both the underground and open pit developments have significant growth potential.  A 2018 drill program focused on the open pit has hit mineralization in all 20 holes. Importantly, it has intersected mineralization in areas previously classified as waste rock in the technical report (due to lack of prior drilling).

Investment Highlights

  • US-based copper project in Nevada, expected to enter production in 2019
  • Company is fully-funded and the path to production is supported by robust 2017 prefeasibility study
  • Underground project post tax NPV (5 percent) of US$301 million and IRR of 25 percent
  • Total mineral reserve of 5 billion pounds of copper and measured and indicated resources of over 6 billion pounds of copper
  • Combined production potential of over 250 million pounds per year
  • Underground production revenue will be used to fund open-pit operations
  • Exceptional management team with notable experience in building mines, permitting, financing, and operating large mining projects
  • Significant upside for both the underground and open pit deposits

Flagship Property

The Pumpkin Hollow project is an advanced-stage, fully permitted copper property with resources and reserves that also include gold, silver and iron. The project measures 10,680 acres and is located five miles away from Yerington, Nevada, a town with a history of copper mining. As such, the project has easy access to existing mining infrastructure, low cost of power and support from the nearby community.

nevada-copper-1

Historical development

The Pumpkin Hollow project was first discovered in 1960 by US Steel, using airborne magnetic surveys. Leading up to 2001, 180,000 meters were drilled by previous owners and managers of the project, leading to the discovery of large copper and magnetite resources. Up until that time, a number of economic studies were also conducted alongside vast metallurgical, geotechnical and geophysical studies.

In 2005, Nevada Copper acquired the property and has since completed a further 180,000 meters of drilling and complementary ground work to support permitting and feasibility efforts. They also published four separate NI 43-101-compliant resource estimates, a preliminary economic assessment (PEA) in 2008 and three separate feasibility studies.

To date, US$220 million of capital has been invested in the project. Construction for the underground operation began in 2012, during which time the company built of a 24-foot production-sized shaft to the 1,900-foot main haulage level. Additionally, 644 feet of lateral development were completed, setting the stage for production on the property. Above ground, the company has also built a head-frame and hoist.

Near-term underground production potential

In November 2017, Nevada Copper redefined its project by releasing an updated PFS for two potential projects on the Pumpkin Hollow property: a high-grade 5,000 tonne-per-day underground operation and a 70,000 tonne-per-day integrated project of both open pit and underground mining.

The underground project PFS was developed with a focus on reduced capital costs and the extraction of higher-grade, higher-margin ore from a 23.9 million-tonne reserve at 1.74 percent copper. The designed approach would make combined use of the existing shaft and hoist on the property and an EPC construction and mining contracts, thus de-risking the project.

Details from the underground project PFS include:

  • Low initial pre-production capital requirements of US$182 million
  • Post tax NPV (5 percent) of US$301 million and an IRR of 25 percent
  • Estimated 15 months to production (end of 2019)
  • Mine life of 13.5 years
  • Average annual copper production of 50 million pounds

screen-shot-2018-01-26-at-4-08-44-pm

Having received full permitting from the state and federal governments, Nevada Copper plans to begin construction in mid-2018 and production of the underground project in mid-2019. This positions the company favourably as the copper market is entering an expected supply deficit and as Pumpkin Hollow is currently the only permitted large-scale copper project in the US.

Open-pit upside

The combined open-pit and underground operation outlined in the 2017 PFS outlined an open-pit and underground reserve of 5 billion pounds of copper, 0.76 million ounces of gold and 27.6 million ounces of silver.

The PFS for the integrated project depicted the following:

  • Annual production of 311 million pounds of copper for the first five years
  • Mine life of 23 years with significant expansion potential from the northern deposit
  • NPV (5 percent) of US$1.2 billion and IRR of 16 percent at consensus metal prices
  • Low capital expenditure of US$4.73 per annual pound of copper production

screen-shot-2018-01-26-at-4-12-35-pm

Nevada Copper sees additional growth opportunities for the open-pit operation, which is made up of two large-scale deposits. There is significant upside potential within the Northern Deposit, which remains open on its eastern and southeastern boundaries. There is also region within the Northern Deposit—the Northern Extension—where a 2018 drill program has encountered substantial mineralization. The area has significant value opportunities as the high-grade, near-surface mineralization of the deposit is demonstrated to continue into the area.

nevada-copper-4

Path to production

Pumpkin Hollow is on target for its underground mine to enter initial production in 2019.  After a period of care and maintenance while the copper market was under pressure, the company has now mobilized contractors and ordered long-lead items. A number of new hires have been made and has commenced an expansion-focused drill program for the open-pit project in order to continue development it while launching the underground operation in mid-2019. At a later date, the company plans to use cash flow from the underground mine to help finance the open pit development, which offsets risk and lowers CAPEX.

Management

Matt Gili—President and Chief Executive Office

Mr. Gili has over 20 years of experience in the mining industry, having served in a variety of senior executive roles at Barrick and Rio Tinto. During his 15-year career with Rio Tinto, his appointments included Chief Operating Officer and Vice President of Resource Strategy for the Oyu Tolgoi project in Mongolia, Managing Director of Palabora Mining Company in South Africa, and Mine Manager at Greens Creek, Alaska. Prior to joining Nevada Copper, he was with Barrick for the last five years. Mr. Gili holds a Bachelor’s degree in Mining Engineering from University of Idaho and an Idaho professional engineer certification.

Robert McKnight—EVP and CFO

Robert McKnight is a Professional Engineer and MBA with over 30 years of experience in the resource business with a wealth of knowledge in project finance, mergers and acquisitions, feasibility studies and valuations. He is a geological engineer with broad experience in the mining industry having held senior roles with Brascan Resources, Wright Engineers, Getty Resources, TOTAL S.A., Endeavour Financial, Pincock Allen & Holt Ltd., AMEC, Yukon Zinc and most recently Selwyn Resources. He is a graduate of the University of British Columbia and Simon Fraser University with degrees in Geological Engineering and Business Administration.

Phillip Day—COO

Phillip Day has significant project delivery and operating experience, and brings key project management skills required to advance the Underground Project into construction phase. His project construction experience includes senior roles with AMEC Americas, where he managed a number of major projects, including the brownfields expansion of Corrego do Sito Gold Project and the $1 billion Gramalote gold study for AngloGold Ashanti. Previously he worked in managerial, operational and technical roles for BHP Billiton and WMC Resources as well as commissioning and operation of the Minara Resources Murrin Murrin Nickel Laterite project. He is presently Head of Technical and Operations at Pala Investments.

Greg French—VP Exploration and Project Development

Greg French is a geologist with over 25 years of exploration experience in the Western US and Canada . He has worked in various capacities for Homestake Mining Co, Atlas Precious Metals and Cornerstone Industrial Minerals as well as consulting for numerous junior mining companies. He has a Nevada gold discovery to his credit and extensive project development experience including two projects taken through feasibility and production.

David Swisher – VP Operations

Mr. Swisher is a qualified professional mining engineer with over 23 years’ experience developing and operating both underground and open pit mines. He has held various senior operating roles at various mines in North America and overseen the development of numerous mining projects globally. Most recently he was Mine Manager at the East Boulder Mine in Montana for Sibanye-Stillwater.

Timothy Dyhr—VP Environment and External Relations

Timothy Dyhr has 35 years of experience in mining. He has led multidisciplinary teams to successfully permit copper and gold mines in Nevada since 1983, and worked on projects in Arizona, California, Washington, Montana, Wyoming, Peru, Chile, Argentina, Australia, Africa, Turkey, China and Papua New Guinea. His experience includes environmental, regulatory, land and legal affairs; and government, media, NGO and public relations. He has worked as a mine site environmental manager, environmental consultant, natural resources manager, and group environmental manager for BHP Copper.

Gus McDonald—VP Controller

Gus McDonald is a chartered accountant with over ten years of accounting, administration, and systems experience. His work experience includes international accounting experience in the USA and England. During the last seven years he has focused on the mining industry. Prior to joining the Nevada Copper team he worked in a financial reporting role at the KGHM Canadian subsidiary (formerly Quadra FNX Mining Ltd).

Eugene Toffolo—VP Investor Relations and Communications

Eugene Toffolo has over 25 years of experience in the investment sector. He has an in-depth understanding of public companies in the resource industry, raising capital and is responsible for the liaison with Investment Advisors, Retail and Institutional investors. He joined the company in 2006.

David Swisher – VP Operations 

Mr. Swisher is a qualified professional mining engineer with over 23 years’ experience developing and operating both underground and open pit mines. He has held various senior operating roles at various mines in North America and overseen the development of numerous mining projects globally. Most recently he was Mine Manager at the East Boulder Mine in Montana for Sibanye-Stillwater.

Timothy M. Dyhr – VP Environment & External Relations

Mr. Dyhr has 35 years of experience in mining. He has led multidisciplinary teams to successfully permit copper and gold mines in Nevada since 1983, and worked on projects in Arizona, California, Washington, Montana, Wyoming, Peru, Chile, Argentina, Australia, Africa, Turkey, China and Papua New Guinea. His experience includes environmental, regulatory, land and legal affairs; and government, media, NGO and public relations. He has worked as a mine site environmental manager, environmental consultant, natural resources manager, and group environmental manager for BHP Copper.

Rich Matthews – VP Investor Relations & Marketing 

Rich Matthews is an experienced investor marketing professional with a strong background in the resource sector. He has run the global IR for a multiple-award-winning exploration company, a top-50 TSX-V exploration company and several other resource companies. Rich has built up an international team comprised of investor relations, public relations and digital marketing professionals, which has enabled him to deliver numerous successful investor marketing programs. He also maintains a strong financial marketing network across North America and Europe.

Catherine Cox – Corporate Secretary

Ms. Cox has over 15 years of experience in the management and administration of public companies in the resource sector, including extensive experience in public company governance and regulation. Ms. Cox has served as Corporate Secretary to Nevada Copper since 2005. Prior to her role as a Corporate Secretary Ms. Cox was a paralegal for a US law firm specializing in corporate and securities law. Ms. Cox holds a Bachelor degree from the University of British Columbia.

Michael Brown – Director

Mr. Brown is Managing Director, Technical and Operations at Pala Investments AG, the exclusive advisor to Pala Investments Holdings Ltd., a multi-strategy investment company dedicated to investing in, and creating value across, the mining sector in both developed and emerging markets. Pala seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative financing solutions. Prior to joining Pala, Mr. Brown worked for De Beers Consolidated Mines Ltd. where in his role of Chief Operating Officer he was responsible to the Chief Executive Officer and Board for all operations in South Africa, including production at five mines, the planning and execution of construction projects, strategic business development and health, safety and environmental control. Mr. Brown previously held the position of Head of Strategic Business Development at De Beers, where he was responsible for the full value chain from resource evaluation to strategic business planning, concept studies, feasibility studies and project implementation. He managed a number of major projects, including the $750 million Finsch block 5 feasibility study, the $1.3 billion Venetia underground mine pre-feasibility study; the $35 million Venetia resource extension project, and a $200 million construction project at Voorspoed.

Lucio Genovese – Director

Mr. Genovese has 28 years of experience in both the merchant and financial sector of the metals and mining Industry. Mr. Genovese is the CEO of Nage Capital Management in Baar, Switzerland. He is also Chairman of Firestone Diamonds plc and a member of the board of Mantos Copper S.A., Ferrous Resources Limited, Ferrexpo AG and Nevada Copper Inc. He was previously employed at Glencore International AG where he held several senior positions including CEO of the CIS region and manager of the Moscow office. Mr. Genovese is a Chartered Accountant and has a B.Comm and B.Acc from the University of Witwatersrand, Johannesburg (South Africa).

Stephen Gill – Non-Executive Chairman

Mr. Gill is a Managing Partner at Pala Investments Ltd. Mr. Gill has been at Pala since 2008, during which time he has been involved in many of Pala’s principal investments covering a range of commodities, as well mining services and consumables sectors. Mr. Gill has also supported many of Pala’s investee companies in defining and implementing strategic initiatives. He is also involved in the oversight of Pala’s liquid investment strategies portfolio. Prior to joining Pala, Mr. Gill was at AMEC Plc., an engineering consulting firm, where he advised on a range of natural resources transactions, and acted as an advisor across a range of private equity transactions, including investments in businesses spanning mining, metals processing, and mining consumables manufacturing industries. Mr. Gill has acted as a director on a number of private and public mining company boards.

Tom Albanese – Director

Mr. Albanese is currently a Director of Franco-Nevada Corporation. He was previously Chief Executive Officer and a Director of Vedanta Resources plc and Vedanta Limited from 2014 to 2017. Mr. Albanese was Chief Executive Officer of Rio Tinto plc from 2007 to 2013, and previously served on the Boards of Ivanhoe Mines Limited, Palabora Mining Company and Turquoise Hill Resources Limited. Mr. Albanese holds a Master of Science degree in Mining Engineering and a Bachelor of Science degree in Mineral Economics both from the University of Alaska Fairbank.

G. Ernest “Ernie” Nutter – Director

Mr. Nutter is a highly regarded mining analyst, formerly with one of the world’s largest money managers, Capital Group, from 2004 until his retirement in 2017. Prior to this, he spent over 13 years with the Royal Bank of Canada (RBC) where he was Managing Director of RBC Capital Markets, Director of RBC’s Global Mining Research team and former Chairman of RBC Dominion Securities’ (now RBC Capital Markets) Strategic Planning Committee. Mr. Nutter holds a Bachelor of Science degree in Geology from Dalhousie University.

Evgenij Iorich – Director

Mr. Iorich has over 15 years of investment and asset management experience and is currently Managing Partner at Pala Investments Ltd. His commodity experience extends across a broad range of bulk commodities, as well as precious and base metals. Mr. Iorich has worked with a number of Pala’s portfolio companies, including, Peninsula Energy (ASX:PEN), Sierra Rutile (AIM:SRX) and Asian Mineral Resources (TSX:ASN) on a range of strategic initiatives, M&A opportunities, operational and financial planning and structuring. He is a director of Peninsula Energy and, in addition, with his considerable experience in oil and gas, is also a director of Serinus Energy (TSX:SEN). Prior to joining Pala in 2006, Mr. Iorich held senior roles at Mechel. Mr. Iorich graduated from the University of Zurich with a Masters of Arts degree.

Abraham (Braam) Jonker – Director

Mr. Jonker is a registered Chartered Accountant in British Columbia (Canada), England and Wales as well as South Africa. He is also a member of the Chartered Institute of Management Accountants in the United Kingdom and holds a Master’s Degree in South African and International Tax from the Rand Afrikaans University. Mr. Jonker has more than 20 years of extensive management, accounting and corporate finance experience across five continents, mostly in the mining industry. Mr. Jonker currently serves as Chairman of the Board of Golden Reign Resources and is Lead Independent Director of the Board of Directors of Mandalay Resources Corporation. Mr. Jonker was Chief Financial Officer of Western Coal Corporation at the time of its take-over by Walter Energy for $3.3 billion. During his career Mr. Jonker has played a pivotal role in several business recoveries, has been a key team member at management level in the strategic growth of several public companies, has raised and overseen the raising of more than $500 million in the form of equity and debt instruments and has been involved in corporate transactions aggregating several billion dollars.

Justin Cochrane – Director

Mr. Cochrane is the President and COO of Cobalt 27 Capital Corp. and he has over 16 years of royalty and stream financing, M&A and corporate finance experience. Prior to Cobalt 27, he served as Executive Vice President and Head of Corporate Development for Sandstorm Gold Ltd. for five years. At Sandstorm, he was responsible for the structuring, negotiation and execution of over $500 million of royalty and stream financing contracts around the world, across dozens of projects.

Prior to Sandstorm, he spent nine years in investment banking and equity capital markets with National Bank Financial where he covered the resource, clean-tech and energy technology sectors. In addition, Mr. Cochrane is currently a board member of Duke Royalty Limited. Mr. Cochrane is a Chartered Financial Analyst and a registered and licensed security advisor in Canada.


 

*Disclaimer: The profile provides information which was sourced and approved by Nevada Copper in order to help investors learn more about the company. Nevada Copper is a client of the Investing News Network (INN). The company’s campaign fees pay for INN to create and update this profile page, to which links are placed on Investingnews.com and channel newsletters.

The company description, investment highlights and catalysts were sourced by INN and approved by the company. INN does not guarantee the accuracy or thoroughness of the information contained on this page.

INN does not provide investment advice and the information on Investingnews.com profile should not be considered a recommendation to buy or sell any security.

INN does not endorse or recommend the business, products, services or securities of any company profiled.

Readers should conduct their own research for all information publicly available concerning the company.