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NovaCopper Files NI 43-101 Technical Report for the Preliminary Economic Assessment on the Arctic Open-Pit Polymetallic Project


September 12, 2013 - Vancouver, British Columbia - NovaCopper Inc. (TSX, NYSE-MKT: NCQ) ("NovaCopper" or the "Company") is pleased to announce that it has filed a National Instrument 43-101 ("NI 43-101") technical report (the "Report") titled "Preliminary Economic Assessment Report on the Arctic Project, Ambler Mining District Northwest Alaska." The effective date of this report is September 12, 2013. The PEA was prepared by Tetra Tech of Vancouver, Canada, and describes the potential technical and economic viability of establishing a conventional open-pit mine-and-mill complex for the Arctic Copper-Zinc-Lead-Silver-Gold Project (the "Project"). The base case scenario utilizes long-term metal prices of $2.90/lb for copper, $0.85/lb for zinc, $0.90/lb for lead, $22.70/oz for silver and $1,300/oz for gold. The PEA was prepared on a 100% ownership basis and all amounts are stated in U.S. dollars unless otherwise noted.

Highlights of the PEA study were as follows:

  • Initial capital expenditure of $717.7 million and sustaining capital of $164.4 for total estimated capital expenditures of $882.1 million over the estimated 12-year mine life. In addition, closure and reclamation costs are estimated at $81.6 million.
  • Pre-tax Net Present Value (NPV)8% of $927.7 million calculated at the beginning of the two-year construction period and an Internal Rate of Return ("IRR") of 22.8% for the base case.
  • After-tax NPV8% of $537.2 million and after-tax IRR of 17.9% for the base case.
  • Estimated, pre-tax, payback of initial capital in 4.6 years and 5.0 years after-tax.
  • Minimum 12-year mine life supporting a maximum 10,000 tonne-per-day conventional grinding mill-and-flotation circuit to produce copper, zinc and lead concentrates containing significant gold and silver by-products.
  • Life of mine strip ratio of 8.39 to 1.
  • Average annual payable production projected to be 125 million pounds of copper, 152 million pounds of zinc, 24 million pounds of lead, 29,000 ounces of gold and 2.5 million ounces of silver for life of mine. On a copper equivalent basis, equates to 210 million pounds of copper per year.
  • A capital intensity ratio on initial capital of $6,995 per tonne of average annual copper produced.
  • Estimated cash costs of $0.62/lb of payable copper (C1 cash costs include on-site mining and processing costs, road tolls, transport, royalties and is net of by-product credits).
  • Total "all-in" cash costs (initial/sustaining capital, operating, transportation, treatment and refining charges, road toll, and by-product metal credits) estimated at $1.26/lb of payable copper.

The Company is not aware of any environmental, permitting, legal, title, taxation, socio-political, marketing or other issue which may materially affect this estimate of mineral resources. The projections, forecasts and estimates presented in the PEA constitute forward-looking statements and readers are urged not to place undue reliance on such forward-looking statements. Additional cautionary and forward-looking statement information is detailed at the end of this press release.

"With the Report for Arctic open-pit now filed, our current priority is to focus on the areas with maximum potential for improvement in the economics of the Project," said Rick Van Nieuwenhuyse, NovaCopper's President and Chief Executive Officer. "Specifically, we will be assessing the viability of using liquefied natural gas ("LNG") in place of diesel as a source of power generation at Arctic. A recently released feasibility study, prepared by the Alaska Industrial Development Export Authority, suggested that the use of LNG should lead to substantial power cost reductions. Under that scenario, a stand-alone liquefaction plant would be constructed on the North Slope of Alaska from where LNG would be trucked to Fairbanks and other interior markets of the State. We will also be evaluating ways of enhancing the economics of the Project by employing a larger mining fleet in the initial years of operation and/or stockpiling lower-grade material. Although the filed PEA demonstrates a solid return on investment, I believe there are a lot of opportunities to further improve the economics of the Project."

Qualified Persons and NI 43-101 Technical Report

The PEA was completed by Tetra Tech and has been incorporated in a National Instrument 43-101 compliant Technical Report which is now available on SEDAR and Edgar and on the Company's website at www.novacopper.com.

Qualified Person Scope of Responsibility
John Huang, Ph.D., P.Eng.
Tetra Tech
Mineral Processing and Metallurgical Testing, Recovery Methods, Market Studies and Contracts, and Operating Costs for Processing, Surface Services and G&A
Michael F. O’Brien, M.Sc., Pr.Sci.Nat, FGSSA, FAusIMM, FSAIMM
Tetra Tech
Mineral Resource Estimates
Sabry Abdel Hafez, Ph.D., P.Eng.
Tetra Tech
Mining Methods, Mining Operating Cost Estimate, Economic Analysis
Mike Chin, P.Eng.
Tetra Tech
Graham Wilkins, P.Eng.
Hassan Ghaffari, P.Eng.
Tetra Tech
Infrastructure, Water Treatment, Construction Camp Accommodation, Communications
Marvin Silva, Ph.D., P.Eng.
Tetra Tech
Tailings Storage Facility and Management Costs
Jack DiMarchi, CPG
Tetra Tech
Environmental Studies, Permitting, and Social or Community Impact
Harvey Wayne Stoyko, P.Eng.
Tetra Tech
Capital Cost Estimate

Qualified Person

Erin Workman, Director of Technical Services for NovaCopper Inc., is a Qualified Person as defined by National Instrument 43-101. Ms. Workman has reviewed the technical information in this news release and approves the disclosure contained herein. Sabry Abdel Hafez, Ph.D., P.Eng. Jianhui Huang, Ph.D., P.Eng., Michael F. O'Brien, M.Sc., Pr.Sci.Nat, FGSSA, FAusIMM, FSAIMM, Hassan Ghaffari, M.Sc., P.Eng., and H. Wayne Stoyko, P.Eng. of Tetra Tech, have also reviewed the technical information in this news release and approve the disclosure contained herein as Qualified Persons as defined by National Instrument 43-101.

About NovaCopper

NovaCopper Inc. is a base metals exploration company focused on exploring and developing the Ambler mining district in Alaska. It is one of the richest and most-prospective known copper-dominant districts located in one of the safest geopolitical jurisdictions in the world. It hosts world-class VMS deposits that contain copper, zinc, lead, gold and silver, and carbonate replacement deposits which have been found to host high-grade copper mineralization. Exploration efforts have been focused on two deposits in the Ambler district -- the Arctic VMS deposit and the Bornite carbonate replacement deposit. Both deposits are located within NovaCopper's land package that spans approximately 143,000 hectares. NovaCopper has an agreement with NANA Regional Corporation, Inc. (NANA), an Alaskan Native Corporation that provides a framework for the exploration and potential development of the Ambler mining district in cooperation with the local communities. Our vision is to develop the Ambler mining district into a premier North American copper producer.

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