Nevada Copper Announces Positive Feasibility Study Results

Nevada Copper Announces Positive Feasibility Study Results for Stage
1 Underground Mine 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/19/12 -- Nevada
Copper Corp. (TSX:NCU) ("Nevada Copper") is pleased to announce
positive results of its Feasibility Study for its 100% owned Pumpkin
Hollow Copper Project near Yerington Nevada. The Feasibility Study,
with capital costs defined to within plus/minus 15%, builds upon two
previous Preliminary Economic Assessments and a Feasibility Study
published in February 2012 as prepared by Tetra Tech ("Tetra Tech"),
an industry leading international engineering firm. 
The Feasibility Study confirms the technical and financial viability
of constructing and operating an underground Stage 1 mine development
of the East deposit, with ore hoisted to surface by way of a 24 foot
diameter production shaft to an associated 6,500 ton per day
processing facility. The mine development footprint is confined to
patented private claims and requires only Nevada State permits - no
Federal permits are required. These State permits are expected to be
issued in early 2013. 
Assuming Nevada Copper moves forward with a staged development
approach, the Stage 1 underground operation will be followed by a
Stage 2 development of a much larger open pit operation on the North
and South deposits ("Western Deposits").  
A separate feasibility study, due for release by early 2013, will
optimize the feasibility study published in February 2012 and will
consist of a larger combined open pit and underground mine
development. This feasibility study will incorporate the
recently-expanded mineral resources in the Western Deposits as
previously reported in a News Release dated September 7, 2012. 
Highlights of the Feasibility Study (All amounts are stated in United
States dollars): 


 
--  The project development consists of a 6,500 ton-per-day underground
    operation at the East deposit, feeding a single 6,500 ton-per-day
    concentrator located near the East shaft; 
 
--  First production targeted for early 2015, with an initial mine life of
    12 years; 
 
--  Proven and Probable Mineral Reserves (East deposit only):
    
    823 million pounds of copper
    220,765 ounces of gold and 4.7 million ounces of silver; 
 
--  Life-of-Mine ("LOM") metal production contained in concentrates totals
    
    759 million pounds of copper
    167,439 ounces of gold and 2.7 million ounces of silver; 
 
--  Average annual copper production in concentrates:
    
    Years 1 to 5: 74.6 million pounds per year 
    Years 1 to 10: 66.9 million pounds per year
 
--  Average annual gold and silver production in concentrates:
    
    Years 1 to 5: 23,700 ozs gold per year 
    Years 1 to 10: 15,900 ozs gold per year
    Years 1 to 5: 340,100 ozs silver per year 
    Years 1 to 10: 248,600 ozs silver per year
 
--  Initial capital costs are estimated to be $329 million including
    contingency, excluding working capital of $15.4 million and excluding
    approximately $17 million already expended for shaft related activities.
    A further $40 million will be allocated from current cash on hand to
    fund future capital costs.
 
--  Life-of-Mine ("LOM") site operating costs are $41.46 per ton of ore-
    milled. Copper production costs, net of gold and silver revenue credits
    are:
    
    Year 1 to 5: $1.21 per pound of payable copper
    Years 1 to 10: $1.51 per pound of payable copper
 
--  Summary of Economic Results: 
 
1.  Base Case: Three year trailing average price of $3.59/lb. copper,
    $1,419/oz. gold and $27.14/oz. silver: 
    
    Net Present Value at 5% is $419 million, pre-tax.
    Net Present Value at 8% is $309 million, pre-tax. 
    Internal Rate of Return is 28.6% and payback is 2.5 years.
 
2.  Alternate Case: Quoted copper forward prices to 2022 then long term
    price of $2.75/lb. copper; gold and silver same as Base Case: 
    
    Net Present Value at 5% is $276 million, pre-tax. 
    Net Present Value at 8% is $201 million, pre-tax.
    Internal Rate of Return is 24.3% and payback is 2.7 years.
 
3.  Average annual operating cash-flow (Years 1 to 5): 
    
    Base Case: $149 million. 
    Alternate Case: $139 million. 

 
"We are extremely pleased with the results of this Feasibility Study.
This Study demonstrates a robust Stage 1 underground project that has
further upside and does not require any Federal permits. In our view,
Stage 1 is both financeable by Nevada Copper with minimal dilution,
while also providing a clear path towards development of a much
larger open pit operation while allowing us to move to production by
early 2015," commented Giulio Bonifacio, President & CEO.  
Project Opportunities  
Mineralization in the East Deposit remains open in several directions
and has not been drilled since October 2010 in view of current
mineable reserve. Nevada Copper expects to resume drilling on the
East and JK-34 deposits from underground drill stations once the
shaft is completed. Reserve expansion in these areas will likely
extend mine life beyond the current 12 year mine life while an
underground definition drilling program will better define tonnages
and ore grades.   
In addition, the proven & probable reserves at the E2 deposit are
potentially available for development by way of a 4,800 foot ramp and
will be subject to a future development decision. The E2 mine plan
and associated reserves were published in the Integrated Feasibility
Study filed on SEDAR in February 2012. The E2 mineral reserve as
previously published are summarized below for information purposes
only. 
Mineral Reserve - East Deposit 
The mineral reserve was developed from the East deposit's measured
and indicated mineral resource after the application of an 0.8%
cut-off grade, stope design, dilution, and mining recovery
parameters. The reserve estimate is as of October, 2012. 


 
----------------------------------------------------------------------------
                 Mineral Reserves - East Underground Deposit                
----------------------------------------------------------------------------
                                          Contai-  Contai-  Contai-   Copper
Classif-                                      ned      ned      ned   Equiv.
ication         Ore Copper   Gold Silver   Copper     Gold   Silver      (1)
            ----------------------------------------------------------------
                                                                            
              000's          Oz./   Oz./  Million           Million         
               tons      %    ton    ton     lbs.     Ozs.     Ozs.        %
----------------------------------------------------------------------------
Proven       10,979   1.55  0.011   0.22  340,349  120,769    2,360     1.81
----------------------------------------------------------------------------
Probable     16,666   1.45  0.006   0.14  483,314   99,996    2,350     1.60
----------------------------------------------------------------------------
Proven &                                                                    
 Probable    27,645   1.49  0.008   0.17  823,663  220,765    4,710     1.68
----------------------------------------------------------------------------
(1) Copper equivalency calculations are based on $3.00 per pound for copper,
$1,400 per ounce gold and $20 per ounce silver, and metallurgical recoveries
of 92.1%, 78% and 57.5% for copper, gold and silver respectively.           

 
Approximately 70% of the total East Deposit measured and indicated
mineral resource was converted to a mineral reserve by the mine plan.
The East Deposit's mineral resource is composed of resources located
in the main East Deposit and the deeper JK-34 Deposit. The current
mine plan does not include material from the JK-34 Deposit. 
In addition, while not part of this feasibility study mine plan, the
proven & probable reserves at the E2 deposit summarized below are
potentially available for future development, subject to a future
development decision. The E2 mine plan and reserves were previously
disclosed in the Integrated Feasibility Study filed on SEDAR in
February 2012.  


 
----------------------------------------------------------------------------
                  Mineral Reserves - E2 Underground Deposit                 
----------------------------------------------------------------------------
                                          Contai-  Contai-  Contai-   Copper
Classif-                                      ned      ned      ned   Equiv.
ication         Ore Copper   Gold Silver   Copper     Gold   Silver      (1)
            ----------------------------------------------------------------
                                                                            
              000's          Oz./   Oz./  Million           Million         
               tons      %    ton    ton     lbs.     Ozs.     Ozs.        %
----------------------------------------------------------------------------
Proven        1,382   1.81  0.012   0.23   50,898   16,584      327     2.06
----------------------------------------------------------------------------
Probable      6,738   1.62  0.006   0.18  218,131   40,428    1,185     1.77
----------------------------------------------------------------------------
Proven &                                                                    
 Probable     8,120   1.65  0.007   0.19  269,029   57,012    1,512     1.82
----------------------------------------------------------------------------

 
Permitting 
Shaft construction permits are in hand with construction having
started in February 2012 on a 2,200 foot, 24 foot diameter
production-sized shaft to access the East underground deposit. This
shaft is targeted for completion by January 2014. 
State permit applications for a 6,500 tons per day underground mine
development and processing operation were submitted in July 2012.
These permits typically take 6 to 8 months for issuance and are
expected to be issued by early 2013 and do not require Federal
permits. These permits are not reliant on passage of the Yerington
Land Conveyance and Sustainable Development Act (the "Yerington
Bill") - See News Releases dated June 20 and October 30, 2012. 
Development Schedule 
Shaft construction activities at the site are proceeding normally.
Shaft pre-sink developments are completed, all major hoist components
have been delivered to site, the hoist foundation is complete, and
head frame engineering is complete with steel fabrication well
underway. In addition, foundation work for the head frame is also
well advanced, and line power has been established at the site. The
target date for the start of hoist and headframe operations is
February 2013. This will allow for resumption of shaft sinking
operations to the East Shaft 2140 foot level total depth. 
Subject to a decision to proceed and conclusion of financing
arrangements, detailed engineering and ordering of key long-lead-time
mining and process equipment is targeted to commence by Q1-2013 with
actual construction starting on the issuance of key state permits.
Ramp-up of underground production is anticipated to commence in the
second quarter of 2015. 
Mining 
All underground production (6,500 tons per day) will come from the
East deposit only. Longhole stoping with paste backfill was chosen to
be the mining method. The tonnage requirement of 6,500 tons per day
called for a bulk mining method. Rock quality was high enough to
support large open stopes which will require structural backfill. The
rock quality was too high for a "block caving" method to be
considered. Once mined, ore will be hauled from the stope and
delivered to a run-of-mine surge bin which feeds into an underground
jaw crusher. One surge bin and jaw crusher is planned. Development
waste will be stored in a drift adjacent to the surge bin and fed
into the crusher at pre-determined intervals. Once crushed, the
material will be transferred by conveyor to the shaft loading pocket
where it will be measured, loaded into skips and hoisted to the
surface.  
Underground mining methods and the mining sequence were developed to
maximize grades in the early production years to the extent possible.
Underground development will be way of a 24 foot diameter
production-sized shaft. Vent and secondary egress shafts will be
constructed as required.  
Total ore mined and processed from the East deposit, LOM, is 27.6
million tons grading 1.49% copper, 0.008 oz/ton (0.266 g/tonne) gold
and 0.17 oz/ton (5.84 g/tonne) silver. LOM metals recovery to
concentrates for copper, gold and silver respectively is 759 million
pounds, 167,439 ounces of gold and 2,709,187 ounces of silver. 
Nevada Copper has the permits necessary for shaft sinking which has
started and targeted for completion by January 2014. Construction
work is now well under way for the installation of hoist and head
frame facilities at the shaft location within the next few months. An
underground contractor for purposes of shaft sinking was selected in
December 2011 and mobilized to site in early 2012. 
Process Plant 
Ore will be crushed underground, hoisted to surface and transported
to a nominal 6,500 tons per day concentrator located approximately
1,500 feet northwest of the shaft. The concentration circuit is
conventional with a single, semi-autogenous grinding mill, secondary
ball mill grinding and flotation, followed by thickening and pressure
filtration to produce a final concentrate grading 24% copper and
containing payable gold and silver. Primary grind size is 100 microns
with projected metallurgical recoveries of 92.1%, 78% and 57.5%, for
copper, gold and silver respectively. 
Metals Production 
Projected recovered metals production to the copper concentrate is
summarized below. LOM copper recovered to concentrates is estimated
to be 759 million pounds. 


 
----------------------------------------------------------------------------
                                                 Yrs 1-5  Yrs 1-10      LOM 
                     Units                       Average   Average     Total
----------------------------------------------------------------------------
Mill Feed            000s stons/yr; 000s tons      2,290     2,302    27,645
Copper Grade         %                             1.77%     1.58%     1.49%
Copper Production in                                                        
 Concentrates        Mlbs/yr; Mlbs                  74.6      66.9   759,082
Copper Concentrates                                                         
 Production          tonnes/yr; tonnes           140,900   126,391 1,434,656
Gold in Concentrates ozs                          23,744    15,942   167,439
Silver in                                                                   
 Concentrates        ozs                         340,090   248,597 2,70
9,187
----------------------------------------------------------------------------

 
Annual operating cashflow averages $149 million in the first five
years of production assuming the base metal price scenario. 
Tailings Storage  
To minimize water usage, tailings will be de-watered, filtered and
conveyed to a "dry-stack" on-site storage facility. This water is
then recycled to the process plant. This method is considered "best
practice" for long term tailings storage in dry environments with
finite water resources. It also lowers long term environmental
monitoring costs.  
Infrastructure  
The project area is well supplied with nearby local infrastructure.
Project-related infrastructure expenditures include an upgraded power
line and substation, and a new water line that connects to the City
of Yerington water system. An energy cost of $0.055/kwh during
production was used for Feasibility Study purposes, based on NV
Energy expected rates. An existing county road will be used to access
the mine site. Copper concentrates will be trucked directly from the
minesite to a US west coast port. Process make-up water will be piped
6 miles (10 km) from the City of Yerington, where housing and
regional services are available and most employees are expected to
reside. The communities of Silver Springs, Smith Valley, Fernley,
Dayton, Fallon, Carson City and Hawthorne are also all within
commuting distance, and have a labor pool and existing housing,
particularly for a construction workforce. 
Capital Costs 
The project initial capital costs are estimated at $329 million, with
an accuracy of plus/minus 15% as of November 2012, including a
contingency of $25.5 million. The contingency allowance is calculated
based on assessed factors for each of the major Direct and Indirect
cost categories.  
The major direct cost items include: underground mine development on
the East deposit, process plant, tailing storage facility, and site
infrastructure. Indirect costs include such major areas as
engineering and procurement, construction management, freight and
commissioning, spares inventory, first fills, and Owners Costs. 


 
-----------------------------------------------------------------
                      Initial Capital Costs                      
-----------------------------------------------------------------
Item                                                 US$ Millions
-----------------------------------------------------------------
Direct Costs                                                     
-----------------------------------------------------------------
Underground Mine Equipment                                  $49.9
Underground Mine Development & Shaft                         59.9
Process and Concentrates Handling                            92.4
Tailings Dewater and Dry Stack Facility                       7.7
Infrastructure                                               15.4
Power and Electrical                                         15.4
Hydrology                                                     1.0
Reclamation                                                   1.0
Environmental                                                 1.0
-----------------------------------------------------------------
Total Direct Costs                                          243.7
-----------------------------------------------------------------
Indirect Costs                                                   
-----------------------------------------------------------------
Engineering and Procurement                                   9.2
Construction Management                                       9.2
Construction Indirect                                        19.5
Freight and Logistics                                         5.5
Vendor and Consultant Assistance                              0.9
Owner's Costs                                                 8.6
Spares First Fills And Inventory                              3.6
Commissioning and Start-up                                    3.1
-----------------------------------------------------------------
Total Indirect Costs                                         59.6
-----------------------------------------------------------------
Total Direct and Indirect Costs                            $303.3
-----------------------------------------------------------------
Contingency                                                  25.5
-----------------------------------------------------------------
Total Initial Capital                                      $328.8
-----------------------------------------------------------------

 
Working capital required for initial operations is estimated to be
$15.4 million.  
The initial capital cost excludes approximately $17 million expended
by Nevada Copper to September 30, 2012 for shaft surface facilities
already purchased or installed, including a production hoist, head
frame, power line and substation, water supply and warehouse.  
Nevada Copper will fund the balance of the projected shaft costs,
approximately $20 million, from its current cash balance and has
allocated a further $20 million of the current cash balance of $48.7
million, as of September 30, 2012 towards initial capital costs.  
Sustaining Capital 
Sustaining capital totals $221.6 million, and includes ongoing
underground mine development & equipment replacement, and
expenditures for expansion of the tailings storage facility.  


 
-------------------------------------------------
             Sustaining Capital Costs            
-------------------------------------------------
Area                                 US $Millions
-------------------------------------------------
Underground Mine Development                $79.9
Underground Mine Equipment                   84.6
Process                                      38.5
Tailings                                     11.0
Reclamation                                   5.2
Hydrology/Dewatering                          2.4
-------------------------------------------------
Total Sustaining Capital                   $221.6
-------------------------------------------------

 
Operating Costs 
LOM site unit operating cash costs are $41.46 per ton-milled, as
summarized in the table below: 


 
---------------------------------------------------------
             LOM Unit Operating Cost Summary             
---------------------------------------------------------
                                                      LOM
Area                                         $/ton-milled
---------------------------------------------------------
Mining (underground average)                       $29.46
Processing                                           7.45
Dry-stack Tailings Facility                          0.65
Reclamation, Infrastructure, Hydrology               0.60
General & Administrative                             3.30
---------------------------------------------------------
Total                                              $41.46
---------------------------------------------------------

 
Ongoing underground mine development costs are included in sustaining
capital. Copper production cash costs per payable pound, including
site operating costs and copper conversion costs such as smelter
charges and concentrate transport, net of gold and silver revenue
credits, are estimated to average $1.21/lb. for Years 1 to 5 and
$1.63/lb. for LOM, excluding royalties.  
Concentrate Marketing 
The copper concentrate grade is 24% copper and contains payable gold
and silver values. The concentrates are considered good quality. The
concentrates will be marketed primarily to Asia via a west coast
port, but some may also be shipped to US smelters if demand emerges. 
Economic Analysis Summary 
Project economics were evaluated using a cash flow analysis, with
future revenues and costs projected into the future to yield annual
net cash flow and a Net Present Value. The cash flows are calcula
ted
both before and after corporate income taxes, and include the cost of
all royalties, local property taxes and Nevada Net Proceeds of Mining
tax. Cash flows were discounted at 5% and 8% to reflect the time
value of money and risk factors. An Internal Rate of Return ("IRR")
and payback period for the project were also calculated.  
The most significant input that affects projected revenues are metals
prices. The following two metal price scenarios were used: 
1.  Base metal price scenario:  
Three year trailing average London Metal Exchange ("LME") prices were
used as at September 7, 2012 and are as follows:  


 
------------------------------
Copper                $3.59/lb
------------------------------
Gold                 $1,419/oz
------------------------------
Silver               $27.14/oz
------------------------------

 
Note that the cash LME copper price on November 1, 2012 was $3.54/
lb; and the three year trailing average price is $3.64 as of November
1, 2012. 
2.  Alternate metal price scenario:  
Copper: Long term forward prices as at September 6, 2012, supplied by
Barclays Capital, were used. These forward prices are available to
2022, and thereafter copper prices were reduced to a long term price
of $2.75 per pound - See table below. 


 
----------------------------------------------------------------------------
Year            2015   2016   2017   2018   2019   2020   2021   2022  2023+
----------------------------------------------------------------------------
Copper Price   $3.48  $3.46  $3.43  $3.41  $3.39  $3.36  $3.33  $3.31  $2.75
----------------------------------------------------------------------------

 
Gold and silver prices used were the same as for the Base metal price
scenario. 
Summary of Economic Results 
Key economic indicators extracted from the Feasibility Study are
summarized below: 


 
----------------------------------------------------------------------------
                                                                            
                                              Base Metal     Alternate Metal
                                                   Price               Price
                                                Scenario            Scenario
----------------------------------------------------------------------------
                                                US$ 000s            US$ 000s
----------------------------------------------------------------------------
Cumulative LOM cash-flow                        $691,799            $452,358
NPV@ 5%, pre-tax                                $419,235            $275,681
NPV@ 8%, pre-tax                                $308,819            $200,735
----------------------------------------------------------------------------
Average annual operating cash-flow                                          
 (Years 1-5)                                    $149,502            $138,984
----------------------------------------------------------------------------
Internal rate of return, pre-tax                   28.6%               24.3%
Payback (years from first                                                   
 production)                                   2.5 years           2.7 years
----------------------------------------------------------------------------

 
The economic results after an estimate of corporate income taxes are
presented below.  
Royalties and Nevada Mining Taxes - The economic results above
include the costs of all third party royalties, and an estimate of
local property taxes and Nevada Net Proceeds Tax payable on income
from operations.  
Corporate Income Tax - The possible effects of corporate income taxes
on project cashflows were calculated by TetraTech on a stand-alone
project basis. Income tax calculations related to mining income can
be complex in the United States. Although nominal corporate tax rates
are 35%, deductions such as percentage depletion deductions and
others available to mining operations, typically reduce the effective
tax rate to 20% or less. The tax calculation is an estimate only;
actual corporate taxes payable will be affected by other corporate
activities such as the further development of Stage 2 open pit
operation.  
The after-tax NPV8% for the Base Metal Price and Alternate Metal
Price cases are estimated to be $256 million and $164 million
respectively. The after-tax IRR for the same cases are 24.7% and
20.9% respectively.  
After tax figures are provided for informational purposes only and
are TetraTech estimates of the potential effect of US corporate
income tax on the project economics on a stand-alone basis. Readers
should consult a tax advisor should they require more definitive
information on US income taxation of income from mining operations.  
Qualified Persons 
In August 2012 Nevada Copper commissioned Tetra Tech Inc. to complete
the Feasibility Study in accordance with NI 43-101. The scientific
and technical information in this release has been reviewed and
approved by Mr. Ed Lips, P.E., Project Manager with Tetra Tech, and
overall manager for the Feasibility Study. Mr. Lips is an Independent
Qualified Person within the meaning of NI 43-101.  
This release was also reviewed by Gregory French, P.G.,
Vice-President & Project Manager of Nevada Copper and Robert
McKnight, P. Eng., Executive Vice-President of Nevada Copper, both of
whom are Non-independent Qualified Persons within the meaning of NI
43-101.  
Readers should refer to the Feasibility Study Technical Report for
further details of the project development. The Feasibility Study
Technical Report will be filed in accordance with NI 43-101 on SEDAR
(www.sedar.com) within the required 45 day statutory period and will
be made available on Nevada Copper's website (www.nevadacopper.com).  
NEVADA COPPER CORP. 
Giulio T. Bonifacio, President & CEO  
Cautionary Language  
We seek safe harbor. 
Alternative Performance Measures 
"Copper Production Costs", "LOM Operating 
Costs", "LOM site unit
operating costs" and similar terms are alternative performance
measures. These performance measures are included because these
statistics are key performance measures that management may use to
monitor performance. Management may use these statistics in future to
assess how the Company is performing to plan and to assess the
overall effectiveness and efficiency of mining operations. These
performance measures do not have a meaning within International
Financial Reporting Standards ("IFRS") and, therefore, amounts
presented may not be comparable to similar data presented by other
mining companies. These performance measures should not be considered
in isolation as a substitute for measures of performance in
accordance with IFRS. 
Contacts:
Nevada Copper Corp.
Eugene Toffolo
Corporate Communications
604-683-8266 or Toll free: 1-877-648-8266
etoffolo@nevadacopper.com 
Nevada Copper Corp.
Robert McKnight, P.Eng.
Executive Vice President & CFO
604-683-1309
bmcknight@nevadacopper.com
www.nevadacopper.com