OPEN PIT PRE-FEASIBILITY STUDY - TSX:NCU nevadacopper.com - Nevada Copper Corp.
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
TSX:NCU
nevadacopper.com
OPEN PIT
PRE-FEASIBILITY STUDY
nevadacopper.com
2019
TSX:NCU |
April 17, 2019
CAUTIONARY NOTE – PRIVATE & CONFIDENTIAL
▪ Forward-Looking Information assumed that all or any part of any inferred resource will ever be upgraded to a
higher category. Exploration is an inherently risky proposition and investors are
▪ Certain statements contained in this presentation constitute forward-looking advised that most exploration projects fail to identify economic resources.
statements. All statements in this presentation, other than statements of
historical facts are forward-looking statements. Such forward-looking statements ▪ The Mineral Resource and Mineral Reserve estimates disclosed herein were
and forward-looking information specifically include, but are not limited to, developed by members of Golder Associates Ltd, all of whom are independent
statements that relate to the plans of Nevada Copper with respect to the Qualified Persons as set forth under Canadian National Instrument 43-101 (“NI
development, construction and commercial production at the Pumpkin Hollow 43-101”) and disclosed in the Technical Report entitled “NI 43-101 Technical
Project, and the technical and economic analysis of the Pumpkin Hollow Project Report: Pumpkin Hollow Project, Open Pit and Underground Mine Prefeasibility
and related matters. Study (PFS)”, (“the 2019 NI43-101 Technical Report”) with an effective date of
January 21, 2019. All Mineral Reserve information has been reported and filed
▪ Often, but not always, forward-looking statements and forward-looking in accordance with NI 43-101. All scientific and technical information in this
information can be identified using words such as “plans”, “expects”, “potential”, presentation is from the 2019 NI 43-101 Technical Report. Mineral Resources
“is expected”, “anticipated”, “is targeted”, “budget”, “scheduled”, “focused”, that are not Mineral Reserves have not demonstrated economic viability.
“estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negatives
thereof or variations of such words and phrases or statements that certain ▪ The Company has included certain non-IFRS measures in this material. The
actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur Company discloses “cash costs” or “C1 cash costs”, “All in Sustaining Costs”
or be achieved. Forward-looking statements and information are subject to (AISC) and similar measures because it understands that certain investors use
known or unknown risks, uncertainties and other factors which may cause actual this information to determine the Company’s ability to generate future earnings
results, performance or achievements to be materially different from any future and cash flows for use in investing and other activities. The Company believes
results, performance or achievements expressed or implied by such forward- that these measures, in addition to measures prepared in accordance with IFRS,
looking statements and information. provide investors an improved ability to evaluate the underlying performance of
the Company and to compare it to information reported by other companies. The
▪ The Company’s actual results could differ materially from those anticipated in non-IFRS measures are intended to provide additional information and should
the forward-looking information as a result of the following factors: general not be considered in isolation or as a substitute for measures of performance
economic conditions in Canada, the US and internationally, geopolitical risk, prepared in accordance with IFRS. These measures do not have any
risks associated with the business of exploration for minerals and mining, risks standardized meaning prescribed under IFRS, and therefore may not be
associated with exploration and development activities, marketability of natural
nevadacopper.com
comparable to other issuers.
resources, ability to raise the necessary capital at competitive rates, title related
risk, the Company has no operating history and no history of earnings, the ▪ The technical information in this presentation has been reviewed and approved
Company is exposed to currency fluctuations, the Company is subject to by Gregory French, P.G. Vice President Exploration & Project Development and
environmental regulations that may change during its development and Robert McKnight, P.Eng., Executive Vice President, Concentrate Sales and
operation, the Company is in competition with other mining companies that may Logistics and David Swisher, P.E., SVP Operations, all of whom are non-
have greater resources and experience, the Company is dependent on key independent Qualified Persons as defined in NI 43-101.
personnel, some of the directors of the Company are involved with other mineral
resource companies and may have conflicts of interest, legal proceedings ▪ This presentation does not constitute an offer to sell or a solicitation of an offer
against foreign directors, additional capital raising requirements will result in the to buy any securities in any jurisdiction to any person. This presentation is not,
dilution to the Company’s shareholders and the Company has a material level of and under no circumstances is to be construed as, a prospectus, an offering
secured debt and the failure to adhere to the covenants associated therewith memorandum, an advertisement or a public offering of securities in the
may trigger default rights for accelerated repayment. Company in Canada, the United States or any other jurisdiction. No securities
TSX:NCU |
commission or similar authority in Canada or in the United States has reviewed
▪ Such forward-looking statements and forward-looking information reflect the or in any way passed upon this presentation or the merits of the securities
Company’s current expectations regarding future events and market conditions described herein, and any representation to the contrary is an offense.
and speaks only as of the date of this presentation. The Company assumes no
obligation to publicly update or revise such information to reflect new events or
circumstances, except as may be required by applicable securities laws.
Investors are cautioned not to place undue reliance on these forward-looking
statements.
▪ This presentation describes “Measured”, “Indicated” and/or “Inferred”
Resources. “Inferred Resources” have a great amount of uncertainty as to their
existence and great uncertainty as to their economic feasibility. It cannot be 2
MINE BUILDING & CAPITAL MARKETS EXPERTISE
Matthew Gili, P. Eng.
President and CEO
▪ Comes directly from Barrick, where he
served as Executive General Manager
for the Cortez District in Nevada and,
more recently, as Chief Technical Officer
Stephen Gill
and Senior Vice President, Operations Tom Albanese,
Non-Executive Chairman
Projects Lead Independent Director
▪ Managing Partner at Pala
▪ Currently a director of Franco
Investments Ltd. and former ▪ Mr. Gili has over 20 years of experience
Nevada
Director on various in the mining industry, having served in a
public mining company boards variety of senior executive roles at ▪ Previously CEO of Rio Tinto
Barrick and Rio Tinto plc and Vedanta Resources
▪ Prior to joining Pala, worked at
Limited
AMEC Plc. advising on a range
of natural resources transactions ▪ Previously served on the
boards of Ivanhoe Mines
Limited, Palabora Mining
Braam Jonker, CFO Company and Turquoise Hill
Resources Limited
▪ Registered Chartered
Accountant BC (Canada),
England, Wales and S. Africa
nevadacopper.com
▪ 20+ years of management,
accounting and corporate
finance experience
▪ Played key role in the growth David Swisher, P.Eng.
of several public companies, Senior Vice President,
has raised and overseen Operations
raising of $500+ million ▪ Mining engineer with over
23 years senior mine
operations and consulting
experience with Getchell
TSX:NCU |
Ernie Nutter, Director Gold, Cargill and others
▪ Previously 13 years as Mining
Analyst at Capital Group
▪ Prior to which spent 13 years
Raffaele (Lucio) Genovese, CA Director
with Royal Bank of Canada,
▪ CEO of Nage Capital Management, Chairman of
as MD of RBC Capital
Firestone Diamonds plc, Director of Mantos Copper
Markets and Chairman of
S.A., Ferrous Resources Limited and Ferrexpo AG.
RBC Dominion Securities
Former CEO of the CIS region and manager of the
Strategic Planning Committee 3
Moscow office at Glencore International AG
OPEN PIT PFS RESULTS SUMMARY:
STRONG CASH GENERATOR, LOW CAPEX, LONG LIFE
1
OPEN PIT PFS HIGHLIGHTS
Project
Robust economics Economics
Post-Tax 21% IRR and $829M NPV7.5% (23% & $1,042M Pre-Tax)
Low upfront capex CAPEX Pre-production capex: US$672 million
Competitive opex OPEX2 $1.73/lb Cu (C1) and $2.03/lb Cu (AISC)
19 years production. 386Mt @ 0.50%CuEq (0.69%CuEq first 5 yrs)
Long life Mine life4
Excellent recoveries Cu Recoveries North Pit 90% South Pit 88%
nevadacopper.com
Strong EBITDA EBITDA $252M per annum life of mine average
Annual free3
Significant cash generation cash flow
Avg cashflow $180Mpa of 17 steady state years
Expansion
Expansion potential potential
Inferred in pit & mineralization open to the North & West
TSX:NCU |
Growth potential Growth potential Other targets on Pumpkin Hollow property
(1) Technical Report, entitled “NI 43-101 Technical Report: Pumpkin Hollow Project, Open Pit and Underground Mine Prefeasibility Studies (PFS)”, with an effective date of January 21st, 2019.
(2) AISC is defined as C1 plus sustaining capital expenditures. (AISC is a non IFRS measure) 4
(3) Utilizes long-term copper price of $3.20/lb.
(4) Cu-eq. calculated using prices with process recoveries based on pit location: Cu $3.20/lb with 90% to North ore and 88% to South ore; Au $1,325/Oz & 67.3% for both North and South ore; and Ag $20.01/Oz & 56.3% for both North and South.
FAVORABLE UPFRONT COST, SIMPLIFIED BUILD AND
PHASED EXPANSION:
Conventional truck-and-shovel Isometric Illustration (Looking SE) of the Stand-alone Open Pit PFS Project.2
✓ Low capital intensity of South Pit
US$9,544/annual tonne of 163Mt @ 0.36%Cu Ore Stockpile
Strip Ratio 2.4
Cu-eq production1 Primary Crusher
✓ Phased production growth North Pit
comprising initial production 221Mt @ 0.54%Cu
scale of 37kstpd with potential Strip Ratio 3.5
expansion to 70kstpd
✓ Potential to fund ongoing
development work and
Processing Facility
construction through future Truck and
cash flows from Underground Dry Stack Cell Mining Facilities
Project, reducing need to Administration &
access equity capital markets Warehouse
General Facility
nevadacopper.com
LoM
Initial Expansion Sustaining 25000
Capital Description Capital Capital Intensity / Tonne of Cu Capacity (US$/t)4
20000
US$M US$M US$M US$M
15000
Mining 1282 106 291 525 10000
Process Plant (including - 5000
427 333 759
tailings filtration)
TSX:NCU |
0
Infrastructure 90 35 - 125
Dry Stack, Site Water,
7 - 119 126
Environment & Reclamation
Owner/G&A3 20 - - 20
Total 672 473 410 1,555
1 Based on 37kstpd mill feed period of copper production, after ramp-up
2 Includes pre-production mobile equipment leasing cost 5
3 Includes concentrate handling offsite and bond for external power construction
4 Source: Global Mining Research
OPEN PIT: ROBUST ECONOMICS AND OPTIONALITY
- Strong economics for the open pit production plan
- LoM of 37kstpd for 6 years and then 13 years at 70kstpd production rate (19 years)
- Expansion to 70ktpd can be done at any time and decision will be based on market
conditions. There is no obligation to expand in a specific year for technical reasons
IRR (Post-Tax) – Various Cu Prices NPV 7.5% (Post-Tax) – Various Cu Prices
30% 1,400
26%
1,200 $1,178
25%
21%
1,000
Life of Mine 20%
17% $829
Economic Results 15%
800
12% $594
600
10%
400 $294
nevadacopper.com
5%
200
0% 0
$3.50 $3.20 $3.00 $2.75 $3.50 $3.20 $3.00 $2.75
• Avg Annual EBITDA @ $3.50/lb Cu: $285M (55% margin) • Avg Annual Post-Tax CF @ $3.50/lb Cu: $204M
• Avg Annual EBITDA @ $3.00/lb Cu: $209M (47%) • Avg Annual Post-Tax CF @ $3.00/lb Cu: $143M
TSX:NCU |
Sensitivity analysis shows that without the 70kstpd expansion, similarly favorable economics are delivered with a 29
year LOM and a post-tax NPV 7.5% of $643M and a 19% IRR
6
CLEAN MARKETABLE CONCENTRATE
Desirable concentrate and well-established infrastructure
▪ Concentrate dry tonnes for the LoM: 5.7M dry tonnes
▪ Avg concentrate production during 37kstpd 6 years: 256ktpa (dry tonnes)
▪ Avg concentrate production during 70kstpd 13 years: 346ktpa (dry tonnes)
▪ Peak annual concentrate production : 433ktpa (dry tonnes)
▪ Concentrate grade ~25.5%Cu
nevadacopper.com
▪ Similar to the Pumpkin Hollow underground mine, the concentrate is expected to be
‘’Clean’’ with no material penalties from deleterious elements
▪ No offtake or sales agreements in place at this time
▪ Haul to nearby rail loading yard at Wabuska, NV
TSX:NCU |
▪ Then rail haul to US West Coast port for shipping onwards internationally
▪ Or rail and/or road haul to North American smelters
7
1
POTENTIAL OPEN PIT FUNDING OPTIONS
Open Pit Funding Options
✓ Partial use of underground production cashflows
✓ Project debt financing akin to that being assessed for UG
the underground project Production
Cashflow
✓ Concentrate off-take and pre-pay agreement
✓ Asset Level Partnership Options
Minority
✓ Stream arrangement Joint- Offtake
or Venture
✓ Joint-venture
Open Pit
Construction
nevadacopper.com
Precious
Project
Metals
Financing
Stream
TSX:NCU |
1) No formal Open Pit funding decision has been made
8
ATTRACTIVE WHOLE OF PROPERTY 1 ECONOMICS
Potential combined economics of standalone underground (production start Q4, 2019) and standalone open pit
✓ Combined IRR of 24% pre-tax (22% post-tax)
✓ Combined NPV of US$1,320M pre-tax (US$1,062M post-tax)
✓ Further drilling of inferred resources of both Open Pit and Underground have potential to increase resources
The "Combined NPVs" are the arithmetic sum of the individual case NPV's. However, note that the NPVs have different
start dates and will not match the NPV of the combined annual net cashflows.
nevadacopper.com
TSX:NCU |
(1) Economic input assumptions draw from the details provided throughout the Technical Report for each stand-alone underground and open pit component of the property. Timeline for underground with production commencing by the of end 2019 and
the open pit construction starting in 2021 with production ramping up in 2023. The results are based from a combination or production, revenue, costs and cashflows as in each stand-alone economic model. Technical Report, entitled “NI 43-101
Technical Report: Pumpkin Hollow Project, Open Pit and Underground Mine Prefeasibility Studies (PFS)”, with an effective date of January 21st, 2019. 9
NCU STRATEGIC ADVANTAGE:
STRONG RISK MITIGATION
✓ Already fully-permitted
✓ Clean metallurgy allows for conventional flotation concentration
✓ Desert climate and local topography optimal for efficient and eco-friendly mining techniques such as
dry stack tailings
✓ Nevada is Fraser Institute’s Top Ranked Mining Jurisdiction in the World
✓ We have previously used fixed price EPC contracts to protect against cost overruns in the
underground construction
✓ Consistently strong support from the local community as well as all levels of government
nevadacopper.com
Coarse Ore
Pebble Stockpile
Crushing
Milling
Tailings Thickening
& Filtration Flotation
Reagents
TSX:NCU |
Concentrate
Tailings conveyor 10
10Open Pit Optimization
DEMONSTRATED Plan FOR PIT DEPOSIT EXPANSION
SCOPE
Recent Drilling (2018 summer program)
✓ Extended open pit deposit, both within and beyond the existing pit shell
✓ Demonstrated further expansion potential in multiple directions
Further Drilling
✓ Current reserve model excludes significant Inferred Resources (197M lbs Cu)
✓ Potential to test full extent of deposit and upgrade Inferred Resources for inclusion in Open Pit
mine plan
nevadacopper.com
TSX:NCU |
Open zones of Western Open Pit North deposit awaiting further drilling
111
PUMPKIN HOLLOW MILESTONES & TARGETS
Open Pit
PFS Targeting OP
Optimization
Construction
Pit Drilling Golder Associates Decision
Open Pit PEA & Project Project
Announce Optimization Study Exploration Exploration
Builder’s Resource Program Program
Team Update
2018 2019 2020 2021
nevadacopper.com
Project
Exploration Underground Targeting
Begin Program Expansion Commencement
Board Construction on Program OP Construction
Additions Underground
Targeted U/G
TSX:NCU |
Pre-Construction Production Targeting
Activities Feasibility Study
for Open Pit
12
1) The Open Pit timeline is based on the PFS study found in the Technical Report, entitled “NI 43-101 Technical Report: Pumpkin Hollow Project, Open Pit and Underground Mine Prefeasibility Studies (PFS)”, with an effective date of January 21st, 2019.KEY TAKEAWAYS: IMPROVED ECONOMICS,
SIMPLIFIED BUILD, PHASED EXPANSION
✓ Further enhanced project economics versus previous studies
✓ Favorable upfront cost, simplified build and expansion optionality
✓ Low risk and fully permitted in World #1 mining jurisdiction with strong community support
✓ Demonstrated scope for deposit expansion
✓ Potential to minimize dilution
✓ Attractive economics for “whole of property” (stand-alone underground & stand-alone open pit mines)
nevadacopper.com
TSX:NCU |
13Nevada Copper Corp Investor Relations
Suite 598, 999 Canada Place Rich Matthews
Vancouver, BC Rmatthews@nevadacopper.com
P: 1-(604) 683-8992 P: 1-(604) 683-8266
F: 1-(604) 681-0122 TF: 1-(877) 648-8266
nevadacopper.com
TSX:NCU |
14Open Pit Mineral
APPENDIX: OPENResources
PIT MINERAL RESOURCES & RESERVES
Open Pit Mineral Resources1 (presented inclusive of Mineral Reserves)
Average Ore Grades Contained Metal
Confidence Category Ore (Mst)
Cu (%) Au (oz/st) Ag (oz/st) Cu (Mlbs) Au (Koz) Ag (Koz)
Measured Mineral Resources 134 0.561 0.002 0.064 1,508 255 8,593
Indicated Mineral Resources 419 0.417 0.001 0.051 3,492 623 21,185
Measured and Indicated Mineral Resources 553 0.452 0.002 0.054 5,000 879 29,778
Note: Effective date on Open Pit Mineral Resource is January 21, 2019.
Average Ore Grades Contained Metal
Confidence Category Ore (Mst)
Cu (%) Au (oz/st) Ag (oz/st) Cu (Mlbs) Au (Koz) Ag (Koz)
Inferred Mineral Resources 28 0.358 0.001 0.040 197 37 1,088
The updated resource model has resulted in an increased the amount of Inferred Resource tonnage compared to previous Mineral
Resource estimates 2. This material may potentially be upgraded with further drilling to Indicated Resources. There is no certainty
that Inferred Resources will ever be converted into Mineral Reserves. Mineral Resources which are not Mineral Reserves do not
have demonstrated economic viability.
Open Pit Mineral Reserves3
nevadacopper.com
Average Ore Grades Contained Metal
Confidence Category Ore (Mst)
Cu (%) Au (oz/st) Ag (oz/st) Cu (Mlbs) Au (Koz) Ag (Koz)
Proven Mineral Reserves (North) 75.4 0.65 0.002 0.070 983 151 5,302
Proven Mineral Reserves (South) 31.3 0.36 0.002 0.045 223 48 1,420
Proven Mineral Reserves (North + South) 106.6 0.57 0.002 0.063 1,206 199 6,722
Probable Mineral Reserves (North) 147.4 0.48 0.001 0.055 1,407 215 8,086
Probable Mineral Reserves (South) 131.7 0.37 0.002 0.049 977 203 6,458
Probable Mineral Reserves (North + South) 279.1 0.43 0.001 0.052 2,384 419 14,544
TSX:NCU |
Proven and Probable Mineral Reserves 385.7 0.47 0.002 0.055 3,590 617 21,266
Note: Effective date of the Open Pit Mineral Reserve is January 21, 2019.
(1) CIM definitions were followed in the development of Mineral Resources: 3) CIM definitions were followed in the development of Mineral Reserves:
Totals may not total due to rounding. Mineral Reserves cutoff grade 0.13% Cu, pit shell Cu price of $2.75/lb, revenue factor 0.90, giving an
Cu Eq. calculated Mineral Resources were estimated at a cutoff grade of 0.12% Cu equivalent $2.48/lb price.
Resources were contained within a pit shell produced using a Cu price of $3.75/lb, Au $1,343/Troy Oz and Ag at Included Au and Ag were valued at prices of $1,343/Troy Oz and $19.86/ Troy Oz respectively
$19.86/ Troy Oz The Mineral Reserves include modifying factors 5% dilution and 98% mining recovery.
Includes North, South and South-East deposits. Includes North and South deposits.
Excludes materials that are oxidized, transition or volcanics. Excludes materials that are oxidized, transition or volcanics.
Columns using prices / recoveries: Cu $3.20/lb & 89.3%; Au $1,325/Oz & 67.3%; and Ag $20.01/Oz & 56.3%. Columns may not total due to rounding.
Cu Eq. calculated using prices / recoveries: Cu 3.20/lb & 89.3%; Au $1,325/Oz & 67.3%; and Ag $20.01/Oz &
2) Nevada Copper News Release “Nevada Copper Files Technical Report on SEDAR”, November 30, 2017. 56.3%. 15APPENDIX : OPEN PIT PROJECT ECONOMIC ANALYSIS
Description Units LOM Total
Life of mine years 19
Annual tons ore processed (LOM average) Mst 20
Total tons ore processed Mst 386
Total tons concentrate produced (dry basis) Kst 6,287
Copper recovered to concentrate Kst 1,603
Net revenue from sales (before royalty) US$ millions $9,552
Net revenue from sales (after royalty) US$ millions $8,986
Life of Mine Total Operating Cost
Mining1 US$ millions $2,201
Processing & tailings management US$ millions 2,074
General and administrative2 US$ millions 164
Life of Mine Operating Cost US$ millions $4,440
Mining1 US$/t RoM ore 5.71
Processing & tailings management US$/t RoM ore 5.38
General and administrative2 US$/t RoM ore 0.43
Life of Mine Average Unit Operating Cost US$/t RoM ore $11.51
Life of Mine Average Unit Costs
Mining1 US$/ lb payable $0.71
Processing & tailings management US$/ lb payable 0.67
General and administrative2 US$/ lb payable 0.05
nevadacopper.com
Conveyor to
RGGS Royalty US$/ lb payable 0.18 tailings bin
TC/RCs, Shipping US$/ lb payable 0.35
By-product Credits US$/ lb payable -0.23
C1 Cash Costs3 US$/ lb payable 1.73
AISC (All-in Sustaining Costs)4 US$/lb payable 2.03
Long Term Copper price5 US$/lb $3.20
Economic Indicators
Pre-tax operating cash flow US$ millions $4,546
Pre-tax NPV 5% US$ millions $1,482
Pre-tax NPV 7.5% US$ millions $1,042
TSX:NCU |
Pre-tax IRR % 23
Pre-Tax Payback Period Years 4.5
Post-tax NPV5% US$ millions $1,203
Post-tax NPV7.5% US$ millions 829
Post-tax IRR % 21
Post-Tax Payback Period Years 8.1
1 Includes mining equipment lease costs and stockpiling. Excludes capitalized waste stripping
2 Includes environment, water and other administration costs
3 C1 cash costs represents cash cost from mining through to recoverable metal delivered to the market, net of by-product credits.
4 AISC represents C1 Cash Costs plus taxes and sustaining capital costs. (AISC is a non IFRS measure) 16
5 All prices are held constant over the producing life of the open pit mine.You can also read
