TerrificArticle from resource world magazine. This explains what there plans are as well.
Located near Yerington in the Walker Lane mineralized belt of western Nevada, the Pumpkin Hollow property hosts measured and indicated resources of 2.7 billion pounds of copper plus inferred resources of 3.4 billion pounds (at a 0.2% copper cut-off grade) as well as a 75-million ton iron resource. Recent high-grade drilling results are expected to significantly improve the economics of turning the project into Nevada’s next copper mine.
While exploring for an economic mineral deposit is often characterized by challenges and disappointments, sometimes pleasant surprises come along that greatly improve the viability of the project. Such is the case for Nevada Copper Corp. [NCU-TSX; ZYTFrankfurt], a relatively new company that owns the Pumpkin Hollow Copper Project.
Although the mineral deposit was discovered by U.S. Steel in 1960 and was subsequently explored by others who defined a substantial mineral resource, recent drilling by Nevada Copper has intersected very impressive high-grade copper mineralization that will significantly improve the economics of the project. NC07- 14, an infill hole drilled in the East deposit, was located 50 metres from the nearest mineralized intercept and encountered several high-grade copper zones. The largest zone returned 51.6 metres averaging 2.54% copper, 0.181 grams gold/tonne, 5.8 grams silver/tonne and 29.5% iron.
Naturally, results like these please Giulio T. Bonifacio, president/CEO of Nevada Copper. Bonifacio is an accountant by profession and has been a CFO for a good part of the last 24 years working for various small and mid cap mining companies, including Vengold Inc. for over eight years with Ian Telfer, chairman of Goldcorp Inc. "Nevada Copper was founded by Reno-based Brian Kirwin, Joe Kircher, Foster Wilson and myself as a private company in 2005, when copper was trading around US $1.50 per pound," says Bonifacio. "Our group was aware of the Pumpkin Hollow property and that it had been extensively explored by US Steel, Anaconda, Cyprus and Conoco." A total of 590,000 feet of drilling had been completed as well as several studies covering metallurgy, mining methods and economics. Based on conservative estimates in excess of US $50 milllion was spent historically on the project by previous operators. The project was very close to a positive production decision when copper prices were below $1 but, the economics were marginal at that time and the project was kept in inventory by US Steel.
"We acquired the Pumpkin Hollow property in late 2005 after several months of negotiations that commenced in June 2005, after US Steel had sold a number of its mineral assets which included Pumpkin Hollow to a private group, in 2002 due to low metal prices." explains Bonifacio. "We negotiated with the private group and created Nevada Copper Corp. by way of an RTO in August 2006, whose primary asset is a 100% interest in the Pumpkin Hollow coppergold- silver-iron property. The acquisition included a complete database of all past drilling, work and studies from the past exploration programs which is a big reason why our group has been able to advance this project to feasibility within a very short timeframe."
The Pumpkin Hollow project contains six different deposits, three of which have higher grades than the others. At the present time, the company has been mostly focusing on drilling the East Zone, the E2 Zone and the Northwest Zone. The drilling has been successfully confirming grade, thickness and continuity of grade as well as a higher grade profile in those deposits.
In August 2006, Nevada Copper released a NI 43-101 compliant resource estimate that pegged the measured and indicated resources at 312 million tons grading 0.44% copper and 12.3% iron with inferred resources of 454 million tons grading 0.37% copper and 8.2% iron - all based on a 0.2% copper cut-off. "In late September, we expect to release a larger updated resource estimate that will incorporate the recent high-grade drilling results," says Bonifacio. "Most of the inferred resources will have been upgraded to the measured and indicated category as a result of our drilling program."
Bonifacio says that from the new information now available, the current plan, subject to feasibility and determination of the mine profile and the optimization of economics, call for starting with a higher grade underground operation followed by a lower grade open pit mine. "There are three deposits that are open pittable and it looks like there are two to three that we would taketo production with underground mining," says Bonifacio. "Our current non compliant internal capital costs projections indicate we can achieve production for less than US $200 million for a 3,000 ton-per-day underground operation that would produce about 65 million pounds of copper per year at an operating cost of US $0.60 per pound. We will follow this with open pit mining for the remaining open pit deposits."
The current drill program totals 63,000 feet (19,000 metres) which was expanded from an initial drilling program of 40,000 feet (12,000 metres) based on the successful in-fill and step-out drilling. In addition to obtaining more information on the copper resources, Nevada Copper wants to get a better understanding of the gold, silverand magnetite resources. The iron magnetite resource currently stands at 354 million tons grading 30% magnetite which sells for approximately US $76/tonne. There are some hints there may be some mineable molybdenum values as well, such as one drill hole that returned 32 feet grading 0.04% Mo. "One item of note is that we are re-assaying over 200 of the previous 425 drill holes for gold, silver and molybdenum values, which was not done in the past. This also includes re-assaying some of the initial drill holes for copper as US Steel’s initial assaying did not include assaying for copper as Pumpkin Hollow was discovered as an iron deposit," says Bonifacio.
"We have been very pleased with our recent drill results that have confirmed grade, thickness and continuity which are proving to be either comparable or better than the historic drilling which will ultimately add considerably to our overall resource and give us a better sense of the ultimate grades of the various deposits. The data on these other metals from the drill programs and re-assaying program will also be incorporated into the new resource calculations scheduled for completion in early October," says Bonifacio. "During processing, the magnetite would be recovered from the copper concentrate tailings. Copper recoveries are over 90% resulting in a copper concentrate of 26% to 28% which is based on historical metallurgical studies. We are currently completing confirmatory metallurgical testwork and studies with results expected within the next two months."
The Pumpkin Hollow property is situated in an ideal location with flat-lying to low rolling hills in a pro-mining state and county. In addition, there is a high tension power line that runs through the property from the nearby Fort Churchill Power Plant, the SP Railway eight miles away, excellent roads into the property and a skilled labour force. The company has developed a comprehensive plan to acquire those operating permits necessary to place Pumpkin Hollow into production.
"A group of best in industry professionals has been commissioned to assist us with this process. Suitable markets will be identified for copper and magnetite. A copper concentrate would be generated using conventional froth flotation methods as indicated by metallurgical studies," says Bonifacio.
Bonifacio says that a few majors have expressed interest in the Pumpkin Hollow Project; however, Nevada Copper management is of the view they would rather take the project to the next stage by completing the updated resource study which is anticipated to add considerable value to the company. "This would be followed by the commencement of a feasibility study in late 2007. We have to wait for the numbers to be crunched; however, the very encouraging recent high-grade drilling results indicate the project will be larger than originally thought and give rise to very positive economics."
"Clearly, as we grow the deposits and do the economics, the project could be a potential target for major mining companies," says Bonifacio. "Meanwhile, we will continue to advance the project toward production ourselves, which is scheduled for 2011. The capital costs for other large copper projects is often considerably more than what we would need to achieve commercial production and we are confident we can raise the necessary funds by way of debt financing and partial equity on a basis that will minimize share dilution. Then we can use the money generated from the initial high-grade underground operation to fund further development of the open pit part of the operation, expected to be in the 25,000 to 40,000 ton-per-day range."