August 28, 2018 - Nevada Copper Corp. (TSX: NCU) (“Nevada Copper” or the “Company”) is pleased to announce that a decision has been made by the Company’s board of directors to proceed with construction at its 100%-owned Pumpkin Hollow underground project in Nevada. This decision follows the Company’s recently completed C$108.5 million public offering of common shares (the “Offering”) and pre-construction activities which have been ongoing since May 2018.
- Commencement of full-scale construction: Transition from pre-construction works to full-scale construction of the Pumpkin Hollow underground project is expected to commence shortly. Project execution plan includes additional benefits from recent value engineering and detailed design.
- Satisfaction of Triple Flag stream conditions: Following today’s announcement of the construction decision, Nevada Copper has satisfied the conditions precedent for the drawdown of the US$70 million precious metals stream deposit.
- Award of key project contracts: Sedgman EPC and Cementation mining contracts executed. Contract structure provides enhanced project delivery through construction risk mitigation measures and fixed-price EPC contract.
Matt Gili, President and Chief Executive Officer of Nevada Copper, commented:
“We are very excited to commence full-scale construction of the Pumpkin Hollow underground project, which will include the processing plant and completion of the underground mine. Delivery of the underground project is the first key step in our strategy of capital-efficient, phased growth from our base in Nevada. I would like to thank all our shareholders and stakeholders, including our financing partners Triple Flag and Red Kite, for their support as we proceed with construction, targeting first copper production in 2019.”
Drawdown of Triple Flag stream deposit
With the completion of the Offering and today’s announcement of a construction decision, Nevada Copper has satisfied the substantive conditions precedent for the Company’s receipt of funding under the precious metals purchase and sale agreement dated December 21, 2017 among the Company, its wholly-owned subsidiary Nevada Copper, Inc. and Triple Flag Mining Finance Bermuda Ltd. The drawdown of the US$70 million deposit pursuant to the agreement is expected to occur shortly.
Contract awards to Cementation and Sedgman
In connection with the construction decision, Nevada Copper has awarded a mining contract for shaft sinking and underground mine development work at Pumpkin Hollow to Cementation, USA, Inc. (“Cementation”). This follows the earlier pre-works program carried out by Cementation at Pumpkin Hollow to prepare the existing shaft and hoist infrastructure in advance of commencement of underground construction activities.
In addition, Nevada Copper has awarded an engineering, procurement and construction (“EPC”) contract for the surface plant and infrastructure at Pumpkin Hollow to Sedgman USA Inc. (“Sedgman”), a member of CIMIC Group, for a fixed price of US$118 million. The EPC contract follows several months of a detailed engineering and design program conducted by Sedgman incorporating a number of significant improvements to the earlier pre-feasibility study (“PFS”) for the Pumpkin Hollow underground project published in November 2017.
The fixed price nature of the EPC contract provides Nevada Copper with significant cost protection for project delivery and the use of a leading mineral processing EPC contractor with knowledge of the project further de-risks project execution during ramp-up.
Following the completion of the PFS, released in November 2017, Nevada Copper has undertaken further review and detailed design. A number of project optimizations and operational de-risking measures have been incorporated, including a centralized mine design, which provides greater operational efficiency for the underground mine and construction of a ventilation shaft via blind sink which provides a lower-risk method to support schedule compliance and further enhances optionality for future operations.
Further project enhancements continue to be reviewed by Nevada Copper, including debottlenecking to subsequently increase production throughput and the potential for decline access to the E2 ore body. Nevada Copper will provide further updates on such project enhancements as appropriate.
Today’s construction decision is based on a construction capital expenditure estimate of US$197 million for the Pumpkin Hollow underground project, and Nevada Copper continues to expect first concentrate production in the fourth quarter of 2019.
New Standby Facility
In connection with today’s announcement of a construction decision, Nevada Copper has secured a commitment from its cornerstone shareholder, Pala Investments Limited, to make available to the Company, at the Company’s election, a standby subordinated loan facility of up to US$25 million at market terms to be mutually agreed and on intercreditor terms acceptable to the Company’s secured lenders. The commitment has been provided should the Company require funds over the next 12-to-24 months for various corporate purposes, including but not limited to, costs of the Pumpkin Hollow underground project, advancement of the open pit and exploration drilling. The availability of a standby source of funding support provides Nevada Copper with further risk mitigation and access to financial resources as it embarks on underground project construction, whilst continuing to advance the Pumpkin Hollow open pit project and other corporate opportunities.
About Nevada Copper
Nevada Copper’s (TSX: NCU) Pumpkin Hollow project is the only major, shovel-ready and fully-permitted copper project in North America. 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 Pumpkin Hollow underground project which is in construction with a view to near-term commencement of copper production; and the Pumpkin Hollow open pit project, a large-scale copper deposit with substantial mineral reserves, and which is currently undergoing an optimization program to target a reduced-capex, staged-development approach.
For further information please visit the Nevada Copper corporate website
NEVADA COPPER CORP.
Matthew Gili, President and CEO
For further information call:
VP Marketing and Investor Relations
Toll free: 1-877-648-8266
This news release includes certain statements and information that may contain 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 plans of Nevada Copper with respect to the development, construction and commercial production at the Pumpkin Hollow Project, the drawdown of the Triple Flag stream deposit and the availability of other sources of funding.
Often, but not always, forward-looking statements and forward-looking information can be identified using words such as “plans”, “expects”, “potential”, “is expected”, “anticipated”, “is targeted”, “budget”, “scheduled”, “focused”, “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 include, but are not limited to, statements or information with respect to known or unknown risks, uncertainties and other factors which may cause actual results, performance or achievements 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: history of losses; requirements for additional capital; dilution; loss of material properties; interest rate increases; global economy; no 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; cost overruns; 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; accidents, title matters; regulatory restrictions; permitting and licensing; volatility of the market price of the Company’s common shares; insurance; competition; hedging activities; currency fluctuations; loss of key employees; the drawdown of the Triple Flag stream deposit, the negotiation and funding of the subordinated standby loan facility, the other risks of the mining industry as well as those factors discussed in the sections entitled “Risk Factors” in the Company's Annual Information Form dated March 28, 2018. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. In addition, there can be no assurance regarding the outcome of the Company’s ongoing technical study work or the achievement or timing of the Company’s exploration, development, construction or commercial production objectives. The Company disclaims any intent or obligation to update forward-looking statements or information except as required by law, and readers are referred to the full discussion of the Company’s business contained in the Company’s reports filed with the securities regulatory authorities in Canada. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that could cause results not to be as anticipated, estimated or intended. For more information on Nevada Copper and the risks and challenges of its business, investors should review Nevada Copper's annual filings that are available at www.sedar.com.
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.