Nevada Copper Corp NEVDQ

Dundee Capital Markets: Buy rating and $3.00 target for NCU

[shakerman640]

According to Dundee Capital Markets:

https://personal.crocodoc.com/jvB20DJ

Nevada Copper Corp.

(NCU-T: C$1.44)

February 10, 2015

BUY, High Risk

Dundee target: C$3.00

NCU Announces Pumpkin Hollow Project Update; Big Year Ahead

This morning NCU released an update on their Pumpkin Hollow project. A new integrated feasibility study is underway, considering a mining scenario with a single, large 70 ktpd concentrator with dual sources of mill feed (vs. previous 2 stage project). The Integrated Feasibility Study is targeted for completion by April 2015. Recall that this option was previously shelved due to a delayed permitting process. With the now successful completion of the land transfer, this option is back on the table. We have a BUY rating on NCU and a target price of $3.00/share based on 0.8x multiple (unch.) to our NAV of $3.72/share. Our NAV is currently based on NCU's original staged mine plan approach.

Pumpkin Hollow Project Update Highlights

• Land conveyance and final permits for the open pit operation are expected by June 2015, in line with expectations

• Integrated feasibility study allowing for the inclusion of high-grade supplemental mill feed from the East and E2 underground deposits has been launched. We expected this option to be re-tabled upon receipt of permits

• Production shaft is ~95% complete towards the main 1,900 level; completion expected within the next few weeks

• 7,900m of underground drilling expected to commence in May. 22,600m of open pit drilling has commenced

All key State permits for open pit operation expected by June 2015

President Obama signed the Yerington land bill into law on December 19, 2014. The law directs the conveyance of 10,400 acres of Federal land to the City of Yerington within 180 days. Binding agreements were executed with the City of Yerington on February 9, 2015 to formalize the details of the land conveyance from the City to Nevada Copper. NCU will acquire private ownership of all Federal land surrounding Pumpkin Hollow which will consolidate the entire Project within a privately held land position where the required permits will be under State jurisdiction and not Federal. All key State permits for the open pit operation are expected by June 2015.

Integrated Feasibility Study Underway

With the passage of the Land Bill and no Federal permit requirements, NCU expects to receive all State permits by Q2/15. The previously announced Stage 2 Open Pit optimization and updated feasibility study has been modified. The new “Integrated Feasibility Study” will be re-oriented to include:

• Single, large 70 ktpd concentrator with dual sources of mill feed (vs. previous 2 stage project)

• Mill feed ~63.5 ktpd open pit ore blended with 6.5ktpd high-grade ore from Eastern UG deposits

Addition of higher grade mill feed (plus 1.75% Cu) from Eastern UG deposits would potentially improve mill feed grades in early production years. Capital requirements for small 6.5 ktpd mill (for the originally proposed standalone Stage 1 UG project) are eliminated. The 70 ktpd Integrated Feasibilty Study will incorporate all available current information, including new drill data, mine plans, engineering work and updated capital and operating costs. The Integrated Feasibility Study is targeted for completion by April 2015. Recall that this option was previously shelved due to a delayed permitting process. With the now successful completion of the land transfer, this option is back on the table.

Eastern Underground Deposits: Main Shaft & Lateral Development Plan

The 24-ft diameter main production shaft is currently at the 1806 level, over 95% complete towards the main 1900 haulage level. NCU expects to reach the 1900 level within the next several weeks. Approximately 700ft of lateral development will then start on the 1900 level to establish setup locations for delineation and development drilling. As lateral development continues, the shaft will be deepened to its final depth of 2,160 ft.

Open Pit and Underground Drilling

NCU's East deposit remains open in several directions. Additional delineation and development drilling will be performed from underground drill stations once the production shaft reaches the 1900 level. 7,900 meters of underground drilling is expected to start in May. The UG drilling program will focus on enlarging the high-grade zones within the current reserve base.

A 22,600m open pit drilling program is underway with drilling results reported as available. The open pit drill program will focus on the "saddle zone" between the North and South deposits and on areas of the North pit.

Financing Update

As of December 31, 2014, NCU has a cash balance of US$36M. NCU also has US$110M remaining as the undrawn portion of its Red Kite facility. The final drawdown is subject to certain conditions including the completion of the main shaft and the arrangement of the balance of funding for Stage 1 project capital. NCU also has an available US$24M Caterpillar Financial equipment lease finance facility available for equipment purchasing.

Stage 1 Underground Capex

Initial capital costs for the Stage-1 underground operation at Pumpkin Hollow are ~$328MM (including a 15% contingency).