Nevada Copper Corp. (TSX: NCU) (“Nevada Copper” or the “Company’’)
is pleased to provide an update on operations and planned restart
of production from its Pumpkin Hollow Underground Mine.
Highlights |
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Progressing to plan with accelerated
development: |
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Main Shaft equipping advancing to plan |
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Materials handling system complete and in position pending
finalization of related civil works |
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Plan for imminent restart of production
confirmed: |
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Mill restart is expected for mid-August |
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Initial production will come from both existing stockpile and
development ore |
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Commencement of ore hoisting from Main Shaft in Q4 |
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Full production capacity is expected to be achieved in Q4 |
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Operational de-risking measures implemented: |
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Cost reduction program completed over Q1 and Q2 |
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New underground contractor performing to plan |
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Simplified critical path plan adopted to enable restart operations
with stope ore hoisting directly from Main Shaft, expediting
ramp-up of ore volumes to mill |
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Ore stockpile continues to grow, with lateral development focused
on key infrastructure and building high-grade stope inventory |
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Mill optimization completed during suspension period |
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COVID-19 operating and contingency plans implemented |
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Optionality to lock-in forward copper prices and de-risk forward
revenues |
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Management team build-out and strengthening |
Evan Spencer, Chief Executive Officer of Nevada Copper,
stated:
“The Pumpkin Hollow management team is making
excellent progress. Operational readiness is now well on-track and
we are continuing the re-mobilisation of our workforce. We are
entering exciting times as we prepare to commission the Main Shaft
and plan to bring the Pumpkin Hollow underground mine into full
scale production in the fourth quarter.”
Accelerated Development Progress on
Track
Progress on the previously announced accelerated development
plan remains on track:
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Main Shaft |
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As announced on June 16, 2020, shaft sinking to final depth was
completed and works are well advanced to equip the Main Shaft into
its final production configuration. Final works on the headframe
have begun and the main sinking Galloway is being reconfigured for
shaft equipping. |
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The main materials handling infrastructure is complete and
positioned immediately adjacent to the shaft headframe. On
completion of the civil works, the materials handling system will
be relocated into its final location. This will allow for the
completion of electrical fit out and alignment with the ore haulage
conveyance. |
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Lateral development: |
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Lateral development rates are in line with target, and additional
optimization measures are being implemented to further increase
productivities to exceed budgeted rates. |
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Hoist rates for the Vent Shaft are consistently 1000 tons/day,
which is 300 tons/day above initial target. Material quantities of
ore continue to be hoisted daily, as a large proportion of
development ore is above cut-off grades. |
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In addition to key infrastructure, lateral development is focused
on high-grade ore development and the preparation of stoping panels
for the commissioning of the Main Shaft. |
Planned Restart and Ramp-up Timeline
The phased re-mobilization of workforce is
underway and expected to be completed this month, with the mill
restart expected for mid-August.
Production during September and October is
planned from stockpile and ongoing development ore hoisting. After
this initial period, full hoisting is planned to commence from the
Main Shaft, which will include high-grade stope ore.
Restart and Ramp-up Milestones
Underground Mine:
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Main Shaft completion |
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Main Shaft at final depth (completed June) |
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Headframe and hoist changes (August) |
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Shaft furnished with steel guides etc. (September) |
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Loading pocket completion (October) |
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Final shaft configuration and hoisting system commissioned
(October/November) |
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Ore & Stoping |
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Development to prepare stope inventory to provide consistent feed
for ramp-up (ongoing) |
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Development ore hoisting to stockpile via Vent Shaft (ongoing) |
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Ore grades further increasing as drifts enter bottom and tops of
future stopes (August/September) |
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Stoping commences in earnest with Main Shaft hoisting, benefiting
from advanced stope development in place (November) |
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Mill: |
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Re-stocking of consumables and additional spares (in progress) |
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Remaining personnel re-mobilized in stages ahead of mill restart
(July) |
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Mill restart (mid-August) |
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Excess stockpile processed, maintaining a long-term floating
stockpile to facilitate redundancy and blending capacity
(August/September) |
The Company completed construction of its
Pumpkin Hollow Underground Mine at the end of 2019, and initial
ramp-up of operations through Q1 2020. At the time of the temporary
production suspension due to COVID-19 impacts, the mill was
performing consistently and had achieved throughput of up to 90% of
design, and recoveries and product specifications close to design
parameters. Test stoping had occurred and lateral development was
proceeding.
During the suspension of milling, the Company
limited its operating costs to preserve working capital where
possible and continued to invest in its accelerated mine
development plan.
With initial construction already completed, the
restart of production will comprise the ramp back up of operating
expenditures and ongoing sustaining capital, and revenues from
production are expected to begin during Q3.
De-Risking Measures Implemented
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Underground Mine: |
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Replaced previous underperforming mine contractor with Redpath in
Q1 2020. Redpath has progressed well at Pumpkin Hollow and has met
operating targets |
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Decoupled mine-to-mill during the current suspension period,
allowing mine development to advance ahead delivering mine
infrastructure and building stope inventory |
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Focused on an accelerated critical path plan to simplify execution
plan and allow for expedited route to full-scale hoisting
capacity |
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Building of larger ore stockpile on surface to de-risk mill
start-up, and maintenance of long-term floating stockpile
buffer |
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Mill: |
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Implemented learnings from Q1 ramp-up and undertook preventative
maintenance during mill suspension |
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Team build-out and strengthening: |
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Hired new senior management personnel with a track record of
successful mine ramp-up and driving operating efficiencies |
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Cost reduction program: |
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Cost reduction program undertaken during Q1 and completed in Q2.
Implemented structural reductions in corporate overheads, site
G&A, improved purchasing of goods and
services |
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Price protection: |
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Arranged facility providing optionality to enter into rolling
copper fixing hedges to lock-in forward copper prices and de-risk
forward revenues |
The Company’s planned restart of production and ramp-up timeline
as outlined above are subject to revision based on impacts of the
COVID-19 pandemic and other factors.
Qualified Persons
The information and data in this news release
was reviewed by Greg French, P. Geol., and David Sabourin, P.E.,
for Nevada Copper, who are non-independent Qualified Persons within
the meaning of NI 43-101.
About Nevada Copper
Nevada Copper (TSX: NCU) is a copper producer
and owner of the Pumpkin Hollow copper project. Located in Nevada,
USA, Pumpkin Hollow has substantial reserves and resources
including copper, gold and silver. Its two fully permitted projects
include the high-grade underground mine and processing facility,
which is now in the production stage, and a large-scale open pit
project, which is advancing towards feasibility status.
NEVADA COPPER CORP.www.nevadacopper.com
Evan Spencer, President and CEO
For further information contact:Rich Matthews,
Investor RelationsIntegrous Communicationsrmatthews@integcom.us+1
604 355 7179
Cautionary Language
This news release includes certain statements
and information that constitute forward-looking information within
the meaning of applicable Canadian securities laws. All statements
in this news release, other than statements of historical facts are
forward-looking statements. Such forward-looking statements and
forward-looking information specifically include, but are not
limited to, statements that relate to the various impacts of the
COVID-19 pandemic, mine development and ramp-up plans and the
expected results and expenditures in respect thereof and the timing
of expected restart of concentrate production, and plans in respect
thereof.
Often, but not always, forward-looking
statements and forward-looking information can be identified by the
use of words such as “plans”, “expects”, “potential”, “is
expected”, “anticipated”, “is targeted”, “budget”, “scheduled”,
“estimates”, “forecasts”, “intends”, “anticipates”, or “believes”
or the negatives thereof or variations of such words and phrases or
statements that certain actions, events or results “may”, “could”,
“would”, “might” or “will” be taken, occur or be achieved.
Forward-looking statements or information are subject to known or
unknown risks, uncertainties and other factors which may cause the
actual results to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements or information.
Forward-looking statements or information are
subject to a variety of risks and uncertainties which could cause
actual events or results to differ from those reflected in the
forward-looking statements or information, including, without
limitation, risks and uncertainties relating to: the state of
financial markets; regulatory approvals; the impact of COVID-19 on
the business and operations of the Company; history of losses;
requirements for additional capital; dilution; adverse events
relating to construction, development and ramp-up, including the
ability of the Company to address underground development and
process plant issues; ground conditions; cost overruns relating to
development, completion and ramp-up of the Pumpkin Hollow
Underground Mine; loss of material properties; interest rates
increase; global economy; no history of production; future metals
price fluctuations and the continuation of the current low copper
price environment; speculative nature of exploration activities;
periodic interruptions to exploration, development and mining
activities; environmental hazards and liability; industrial
accidents; failure of processing and mining equipment to perform as
expected; labor disputes; supply problems; uncertainty of
production and cost estimates; the interpretation of drill results
and the estimation of mineral resources and reserves; changes in
project parameters as plans continue to be refined; possible
variations in ore reserves, grade of mineralization or recovery
rates may differ from what is indicated and the difference may be
material; legal and regulatory proceedings and community actions;
the outcome of disputes with the Company’s contractors; accidents;
title matters; regulatory restrictions; increased costs and
physical risks relating to climate change, including extreme
weather events, and new or revised regulations relating to climate
change; permitting and licensing; volatility of the market price of
the Company’s common shares; insurance; competition; hedging
activities; currency fluctuations; loss of key employees; other
risks of the mining industry as well as those risks discussed in
the Company’s Management’s Discussion and Analysis in respect of
the year ended December 31, 2019 and in the section entitled “Risk
Factors” in the Company’s Annual Information Form dated May 15,
2020. Should one or more of these risks and uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in
forward-looking statements or information. The forward-information
and statements are stated as of the date hereof. The Company
disclaims any intent or obligation to update forward-looking
statements or information except as required by law.
The Company provides no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
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