Loan moves Yerington copper project ahead
Flush with cash from a $200 million loan, Nevada Copper is on track to complete work on the massive headframe for its Pumpkin Hollow underground copper mine at Yerington and finish sinking a 2,200-foot-deep shaft.
Tim Dyhr, vice president of environment and external relations for Nevada Copper of Vancouver, says the $200 million loan the company secured at the end of March from RK Mine Finance allows the company to proceed with a detailed engineering plan to develop an underground mine and crucial infrastructure needed to access copper buried a nearly a half-mile underground.
Nevada Copper has to construct about 15,000 feet of tunnels and drifts once the 24-foot-diameter main shaft is complete, Dyhr says, and the financing allows the company to proceed to that stage of its overall plan. Currently, construction efforts are focused on completing the 150-foot-tall headframe above the shaft, which contains more than 400 tons of steel.
The headframe allows materials and men to be hoisted up and down the shaft via a control hoist powered by twin 1,500-horsepower motors. The hoist eventually will be converted to a production hoist that will haul as much as 6,500 tons of ore per day to the surface.
“We are financed for the shaft and the hoist structure, and now we are financed to move forward on detailed design of underground and surface infrastructure such as power lines, water and sewer,” Dyhr says. “When you schedule out the whole project and say when you are going to start producing copper, one of longest lead times is development of the mine to get ore to fed the mill. We have got the shaft permitted and now an entire underground operation plan can be developed.”
Once the hoist is operational, underground mine specialist Atkinson Construction of Broomfield, Colo., can resume shaft sinking at a minimum rate of roughly 10 feet per day. Nevada Copper has not yet selected a contractor for its underground engineering work. The company expects to begin producing ore from underground operations in 2015.
Dyhr says the funding by RK Mine Finance, part of Red Kite Group, a global metal merchant, came about through a series of negotiations with several different funding organizations. The funding package was the largest financing deal RK Mine Finance has done to date, Dyhr says.
Nevada Copper will repay the loan through an off-take agreement in which it agrees to sell copper concentrate produced at Pumpkin Hollow to RK Mine Finance.
“We’re seeing indications that Nevada consumers are feeling the financial effects of the pandemic more than the national average and are beginning to tighten their household budgets,” says Bryan Wachter, Senior Vice President of Government and Public Affairs of RAN.