Contact Copper Project
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- October 2013 PFS Report
Contact Copper is a 100% owned pre-feasibility stage copper oxide project located on private property in Elko County, Nevada. U.S Highway 93 runs along the east side of the project along with a 138 KV transmission line. The project is located in an area of arid rolling hills, and the project geology has the advantage of being conducive to the low cost heap leach SX-EW method of extraction. *All information and tables listed below are from the N.I. 43-101 compliant pre-fesibility study for the Contact Copper Project prepared by Hard Rock Consultants LLC, published October, 2013 (amended March 2016). This study is located in the Contact section of this website.
How Did CopperBank Obtain CONTACT COPPER?
CopperBank purchased the Contact Copper mining district from Enexco International during the summer of 2014. The project consists of an area of 5,935 acres of private property and BLM claims. At it’s peak, Enexco had a market capitalization of $100 million – it would take in excess of $40 million to duplicate all the work completed on the project area.
The Project is located west of the town of Contact, Nevada, one mile west of U.S. Highway 93, between the towns of Wells and Jackpot, Nevada. The property consists of approximately 2,650 acres in 156 patented claims and 3,285 acres in 219 unpatented claims. Significant portions of the project area have never been drill tested, view maps in this section.
Copper mineralization occurs as an intrusive-related deposit within the Contact batholith and is observed in quartz veins within structural zones and in the surrounding granodiorite. The copper content is highest in the quartz veins, particularly where chalcocite is present, but grades outward into granodiorite where copper minerals occur in quartz veinlets, fracture coatings and disseminations. Mineralization is in the form of tenorite, chrysocolla and cuprite, and lesser chalcocite and covellite. Oxidation is observed to depths of 2,000 feet in drilling.
Over 86,000 meters has been drilled at Contact between 1967 and 2012. The previous operator, Enexco International drilled in excess of 55,000 meters between 2007 and 2012 establishing numerous 43-101 compliant resource estimates and the measured and indicated resources for the 2013 pre-feasibility study. CopperBank has established a cost-effecitve drill program that would focus on the near-surface, higher grade portions of the deposit as well as additional metallurgical holes to increase recovery confidence for mine scheduling.
Highlights of Previously Drilled Near Surface Holes
EN104 - 75 ft @ 1.003% Cu starting at 145 ft.
EN111 - 195 ft @ 0.698% Cu starting at 10 ft.
EN-68 - 62 ft @ 0.695% Cu starting at the surface.
EN-109 - 85 ft @ 0.743% Cu starting at surface.
Map of potential drill program is listed below.
Optimization Potential For Contact
The economic analysis of the Project results in an internal rate of return (IRR) of 30.4% on a before-tax basis, and an IRR of 25.9% on an after-tax basis with a copper price of $3.20 per pound. Net present values (NPVs) at a discount rate of five percent are $183 million and $149 million before and after-tax respectively, at an eight percent discount rate NPVs are $135 million and $106 million.
CopperBank is completing a technical review of optimization potential for the Contact Copper Project. Areas of interest are: activity based costing (ABC), theory of constraints (TOC), various pits and phases for mine scheduling, cut-offs, stockpiling, processing, production and newer technologies like "Mine Sense." Additionally, the company is reviewing various scenarios that could include after-tax rates of 35% and 20%, dicount rates of 10%, 8% and 5%, and, copper prices from USD $2.50 per pound up to $5.00 per pound in 0.25 increments.
Resource and Resource (for 2013 PFS)
The Resource was estimated using a three dimensional block model and inverse distance squared weighting. At a 0.07% Cu cut-off, material in the Measured plus Indicated categories totals 213 million tons at 0.20% Cu, for a total of 831 million pounds of copper. At the same cut-off, 52 million tons at 0.20% Cu, or 52 million pounds of copper, is in the Inferred category. The Resource is shown in the below Table for a 0.07% Cu cut-off. CopperBank is internally reviewing project economics that would envisage higher cut-offs of 0.15% and 0.20% Cu as established in previous resource estimates.
Table 1-1 Mineral Resource Estimate Reported at 0.07% Cu Cut-off
|Category||Cu%||Tons (000)||Pounds Cu (000)|
|Total Measured + Indicated||0.2||213,113||831,494|
The Mineral Resource for this report is pit-constrained on the Global Resource and contained within a Lerchs-Grossman pit shell based on a copper price of $4.00 per pound and operating cost and recovery parameters as described in Section 15.The below Table shows the Mineral Reserve at a 0.07% Cu cut-off.
Table 1-3 Mineral Reserve Estimate Reported at 0.07% Cu Cut-off
|Category||Cu%||Tons (000)||Pounds Cu (000)|
|Total Proven + Probable||0.22||141094||611748|
2013 Pre-Feasibility Hi-Lights and Sensitivity
|Location||Elko County, Nevada|
|Processing||Heap Leach & SX-EW|
|Mine Life||9.4 years|
|Initial Capex (incl. Contingency)||$188.9M|
|Avg. Ore Production Rate||41,000 tpd|
|Cash Cost (incl. Taxes & Royalties)||$1.73/lb Cu|
|Annual Production||49.2 Mlbs Cu/yr|
|Total LOM Production||462 Mlbs Cu|
|After-Tax Project NPV||$107M|
|After-Tax Project IRR||25.90%|
Mining, Processing and Development
Mining could utilize open pit methods. Ore production is designed to increase from 29,000 to 52,000 tons per day, with an average rate of 41,000 tons per day at an overall waste-ore ratio of 2.3:1. Ore will be crushed in two-stage crushing and then heap leached with sulfuric acid solution. Copper would be recovered in a solvent extraction-electrowinning plant (SX/EW) to produce copper cathodes on site. The SX/EW plant is designed to produce 50 million pounds (25,000 tons) of copper annually. Metallurgical test work indicates the copper recovery will be 76% with an acid consumption of 17 pounds per ton of ore leached. Preparation of a plan of operations leading to an environmental assessment would be the next steps for the Project, as well as baseline studies and permitting subject to market conditions.
Table 1-4 Capital Costs
|Pad & Ponds||26,146|
|Reagents & Initial Fills||2,532|
|Direct Costs Total||$147,459|
|Contingency Mine Equip. (@10%)||5,033|
|Indirect Costs Total||$41,486|
|Capital Costs Total||$188,945|
Table 1-5 Operating Costs
|Operating Cost||Total Cost (000)||$/lb Cu||$/ton Ore|
|Cash Operating Costs||1.72||5.65|
Estimated Costs For Contact Feasibility Study
The following recommendations, and estimated costs, were made by the author of the 2013 pre-feasibility study.
Table 26-1 Estimated Costs for Contact Feasibility Study
|$ (x 1000)|
|A. Metallurgical Studies||Optimize operating parameters||250|
|B. Geotechnical Studies||Pad & pond foundations, confirm water supply||250|
|C. Project Engineering & Report||Mine, Processing Plant, Infrastructure, Economics||75|