Nevada Copper Corp. reports that deliveries of copper concentrate to its offtake partner have resumed after the restart of copper mining in August 2020 at its Pumpkin Hollow Underground Mine. The company also provides an update on its operations.
We are pleased to have resumed concentrate deliveries from Pumpkin Hollow, following the restart of milling operations as planned in August. We continue to work towards steady-state production and are pleased that the Main Shaft remains on schedule for completion in November.
Evan Spencer, Chief Executive Officer, Nevada Copper
Evan Spencer added, “We are also pleased to welcome Dale Ekmark as the Company’s Chief Operating Officer. Dale brings decades of mining experience to Nevada Copper that will help lead the Company to achieve top operational results.”
Concentrate Delivery and Processing Plant Restart
Nevada Copper has finished its first concentrate delivery after the restart of milling processes as stated on August 24th, 2020, after a temporary suspension of copper production because of the restrictions related to the COVID-19 pandemic. This first consignment contained 1,322 tons of concentrate. Since the resumption of milling, concentrate specifications have been matching offtake demands, and concentrate grade is stable according to plan.
Concentrate deliveries continue on target and are scheduled to carry on with increasing volumes. Parallel to the concentrate delivery, the company restarted draws and repayments under its working capital facility.
The conclusion of the main shaft transition to its permanent production arrangement continues on schedule for completion in November 2020. Completion of the main shaft is a major milestone after which better hoisting rates will permit mining operations to increase toward mill design capacity.
The underground lateral development rates of the company continue as scheduled. Ore grades that are discovered in ongoing development continue to reconcile well to resource model grades, and hoisted development ore grades have increased in keeping with the start of stope development.
Initial Mine Planning
In addition to the August 6th, 2020 update concerning the geotechnical analysis of the latest definition drilling in the Upper East South zone, Nevada Copper has chosen to decrease the size of some early stopes in a localized area where preliminary ramp-up ore is scheduled.
The shift to preliminary smaller stopes in this area is a practical short-term measure to further decrease mining risk and not disturb the life of mine resources. Management has been continuously reviewing cost impacts with regard to preliminary smaller stopes.
Nevada Copper continues to plan ongoing monthly increasing ore production rates with the production of 5000 tpd anticipated to be accomplished during the first quarter of 2021 instead of year-end. In spite of the slower ramp-up, the shift to initially smaller early stope sizes is anticipated to offer the benefit of a higher number of stopes earlier in the ramp-up, which adds to the de-risking production.
Due to delays in some expected cash receipts, including a lower initial draw under the working capital facility and return of cash collateral under bonding arrangements, Pala Investments Limited (“Pala”), the company’s largest shareholder, has given Nevada Copper access to extra liquidity of up to US$8 million (the “Promissory Note”).
Nevada Copper made a preliminary draw of US$4 million, with ensuing draws available at the company’s option, conditional on agreed use of proceeds. The Promissory Note has a maturity date of January 31st, 2021, and bears interest at 8% annually on amounts drawn. The negotiation and approval of the Promissory Note were overseen on behalf of the company by the autonomous members of Nevada Copper’s board of directors.
The projected timing for the conclusion of the ramp-up is dependent on revision based on the effects of the COVID-19 pandemic and other factors. As mentioned above, management continues its review to establish the extra costs anticipated to result from ongoing mine scheduling and the effect of smaller initial stopes on the ramp-up and will offer additional updates as suitable.