Feasibility Study
The Feasibility Study was prepared under the direction of Tetra Tech, Inc. ("Tetra Tech"), an industry leading international engineering firm, with substantial input from Merit Consultants International Inc. ("Merit"), which compiled and reviewed the initial capital cost estimate. The Feasibility Study, with capital costs defined to within plus/minus 15%, builds upon two previous Preliminary Economic Assessments prepared by Tetra Tech, and significant metallurgical and geotechnical work completed in 2010 and 2011. The Feasibility Study confirms the technical and financial viability of constructing and operating a 67,500 ton-per-day copper mining and processing operation at Pumpkin Hollow.
Highlights of the Feasibility Study (all amounts are stated in United States dollars):
- The project development consists of a 60,000 ton-per-day open pit operation; and a 7,500 ton-per-day underground operation, feeding a single 67,500 ton-per-day concentrator;
- First production targeted for mid-2015, with a current mine life of 18 years;
- Proven and Probable Mineral Reserves of 4.29 billion pounds of copper; 952,000 ounces of gold and 27.3 million ounces of silver on the basis of drill data up to October 2010;
- Life-of-Mine ("LOM") metal production contained in concentrates totals 3.83 billion pounds of copper, 641,917 ounces of gold and 15.37 million ounces of silver;
- Average annual copper production in concentrates:
| Years 1 to 5: |
274 million pounds per year |
| Years 1 to 10: |
254 million pounds per year |
| LOM: |
226 million pounds per year |
- Initial capital costs are estimated to be $1.04 billion including contingencies, excluding working capital of $48.9 million;
- LOM site operating cash costs are $12.33 per ton of ore-milled; copper production costs net of gold and silver credits are:
| Years 1 to 5: |
$1.28 per pound of payable copper |
| Years 1 to 10: |
$1.37 per pound of payable copper |
| LOM: |
$1.43 per pound of payable copper |
- Summary of Economic Results:
- Base Case: Three year trailing average price of $3.24/lb. copper, $1,252/oz. gold and $23.19/oz. silver:
Net Present Value at 5% is $1.91 billion, pre-tax.
Net Present Value at 8% is $1.26 billion, pre-tax.
Internal Rate of Return is 23.1% and payback is 3.6 years. |
- Alternate Case (1): Quoted forward prices to 2021 declining to long term of $2.50/lb. copper; gold and silver same as Base Case:
Net Present Value at 5% is $1.49 billion, pre-tax.
Net Present Value at 8% is $1.02 billion, pre-tax.
Internal Rate of Return is 23.5% and payback is 3.3 years. |
- Alternate Case (2): $3.75/lb. copper.; gold and silver same as Base Case:
Net Present Value at 5% is $2.93 billion, pre-tax.
Net Present Value at 8% is $2.05 billion, pre-tax.
Internal Rate of Return is 30.8% and payback is 3.0 years. |
- Average annual operating cash-flow (Years 1 to 5):
| Base Case: |
$450 million |
| Alternate Case (1): |
$494 million |
| Alternate Case (2): |
$570 million |
Please click on the following for the complete Feasibility Study
http://www.nevadacopper.com/i/pdf/NI_43-101_Pumpkin_Hollow_Project_NCC_FinalR2.pdf
