Nevada Copper Announces Further Progress With Underground Operations and Strategic Project Development
July 12 2021 - 5:30PM
Nevada Copper Corp. (TSX: NCU) (OTC: NEVDF)
(“Nevada Copper” or the “Company”) is pleased to provide an update
regarding the ramp-up of the Underground Mine and development
activities for the Open Pit project at its 100%-owned,
fully-permitted Pumpkin Hollow Project in Nevada.
Production Ramp-Up Update
- Safe and
effective penetration of dike structure: The Company is in
the process of safely completing the dike crossing. As reported on
May 17, 2021, ground and hydrological conditions associated with
the dike reduced development rates for a temporary period while
traversing the dike to allow for grouting and ground control. With
the completion of the dike crossing within the next two weeks, the
Company expects to see lateral development rates increase back to
planned rates this month.
-
Underground ventilation commissioned on-schedule:
All underground ventilation fans were installed and commissioned
during May, as planned. The final surface fans continue to be
planned for delivery in Q3 2021 and commissioning in Q4 2021.
Consequently, achievement of steady-state production continues to
be expected in Q4 2021.
-
Successful completion of process plant C5 Testing:
During June, Sedgman successfully completed C5 testing of the
processing plant for grind size and moisture.
Mike Ciricillo, Nevada Copper’s Chief Executive
Officer, stated:
“I am pleased with the continued progress with
the ramp-up from Pumpkin Hollow. The safe penetration of the dike
and commissioning of the underground ventilation system are
significant de-risking steps and facilitate increasing development
and production rates, as we progress to steady-state. The
longer-term mine planning work being advanced indicates future
potential upside for both Underground and Open Pit projects.”
Project Development
-
Underground Mine Planning supports potential for higher
long-term production rates: As part of its project
development objectives reported on March 1, 2021, the Company has
progressed its life-of-mine planning aimed at operating its
underground mine at an ultimate production rate in excess of the
originally contemplated 5,000 tons per day rate. Mine planning work
during Q2 2021 further supports the potential for the mine, once
ramped-up to steady-state, to operate at higher long-term rates of
6,500 tons per day milled, increasing long-term annual copper
production. This additional production capacity would also support
accelerated mining of the significant additional underground copper
resources that exist over and above the current underground
reserve. Further engineering work will be undertaken during H2 2021
to support the potential for a higher long-term production rate
from the underground operation.
- Open Pit
Solar Power Study indicates potential to further reduce Open Pit
power costs: The Company has also progressed the planned
feasibility studies for a potential solar project, with renewables
consulting group Sprout Associates, with the following initial
conclusions. Further updates will be provided upon completion of
the next phase of study work:
- Pumpkin Hollow
benefits from ample sun and land to support a large solar project
with the capacity to meet a significant portion of the Open Pit
project’s power requirements;
- The solar
potential at the site is up to 200MW;
- Already low grid
power costs in Nevada could be materially further reduced through
an on-site solar plant; and
- A third-party
solar project provides an option to remove upfront power
infrastructure costs from the Open Pit project.
Balance Sheet Update
- Further to the
Company’s announcement on May 17, 2021, Pala Investments Limited
has agreed to provide additional financing of US$25 million through
a promissory note (in addition to the fully drawn existing US$30
million credit facility), providing additional liquidity for the
ramp-up and addressing the reduced development rates associated
with the dike grouting program. The Company has drawn US$15 million
under the promissory note, with subsequent draws available at the
Company’s option, subject to agreed use of proceeds. The promissory
note has a maturity date of June 30, 2022 and bears interest at 8%
per annum on amounts drawn. The promissory note was reviewed and
approved by the independent members of the Company’s board of
directors. In addition, US$9 million remains available to draw
under the Company’s working capital facility with its offtake
partner, Concord Resources Limited.
- The Company has
received proceeds of CAD$1.4 million for exercise of warrants so
far in 2021. The Company has the potential to receive a further
CAD$65 million of warrant proceeds should all the outstanding
warrants expiring in January 2022 with an exercise price of
CAD$0.20 (the “January 2022 Warrants”) be exercised prior to
maturity. In addition to the January 2022 Warrants, a further
CAD$34 million of warrant exercise proceeds may be received should
the outstanding warrants expiring in July 2022 with an exercise
price of CAD$0.22 be exercised in full prior to maturity.
- The Company’s
senior lender, KfW IPEX-Bank (“KfW”), has provided the Company with
a 60-day extension to the project completion longstop date from
June 30, 2021 to August 31, 2021, while the parties agree on a
revised completion test and longstop date for the project. The
Company will provide a further update once a revised project
completion test and longstop date has been agreed with KfW. While
the Company expects to agree on an appropriate revised date with
KfW, there can be no assurance this will be achieved.
- The Company
continues to undertake near-term mine planning to incorporate the
recent impact of the dike on development rates and other factors
that have slowed the production ramp-up. It is possible that such
mine plan updates may indicate higher operating costs and
additional development capital and working capital requirements for
the ramp-up than previously contemplated.
Qualified Persons
The information and data in this news release
was reviewed by Greg French, C.P.G., and Norm Bisson, P.Eng., 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
Mike Ciricillo, President and
CEO
For further information
contact:Rich Matthews, Investor RelationsIntegrous
Communicationsrmatthews@integcom.us+1 604 757 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 mine development plans,
production and ramp-up plans and the expected timing and results
thereof, equipment installation, and further discussions with
KfW.
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 and events 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 ability of the
Company to complete the ramp-up of the Underground Mine within the
expected cost estimates and timeframe; requirements for additional
capital and no assurance can be given regarding the availability
thereof; the impact of COVID-19 on the business and operations of
the Company; the state of financial markets; history of losses;
dilution; adverse events relating to milling operations,
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,
construction and ramp-up of the Underground Mine; loss of material
properties; interest rates increase; global economy; limited
history of production; future metals price fluctuations;
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 from management’s
expectations and the difference may be material; legal and
regulatory proceedings and community actions; accidents; title
matters; regulatory approvals and 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 securities; 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, 2020 and in the section entitled “Risk
Factors” in the Company’s Annual Information Form dated March 18,
2021. 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-looking
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 and information 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 and information.
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