VANCOUVER, British Columbia,
November 1, 2012 /PRNewswire/ --
Copper North Mining Corp. ("Copper North" or "the Company")
(TSX.V: COL) is pleased to announce results from its National
Instrument 43-101 ("NI 43-101") feasibility study update ("the
Feasibility Study") for the wholly-owned Carmacks Copper Project
("Carmacks"), located in the
Yukon Territory, Canada.
The Feasibility Study concludes that development of Carmacks can be achieved with an after-tax
internal rate of return ("IRR") of 15.6%, based on 100% equity
financing. The project has an after-tax, net present value ("NPV")
of $55.0 million using an 8% discount
rate, the U.S Securities and Exchange Commission ("SEC") three year
historical copper price of US$3.63/lb, and an exchange rate of US$1: C$1.
President and Chief Executive Officer, Dr. Sally Eyre stated "despite significant cost
increases across the mining sector, coupled with a stronger
Canadian dollar, the 2012 Feasibility Study demonstrates that
Carmacks remains economically
viable at current copper prices. The completion of the study is
another important step towards de-risking the project. However, to
further improve project economics, the Company is considering a
brownfields exploration program that would focus on developing the
known copper oxide resource potential at Carmacks".
The Feasibility Study was prepared in accordance with the
requirements of NI 43-101 by M3 Engineering and Technology
Corporation ("M3") of Tucson,
Arizona with resource estimation provided by Tetra Tech WEI
Inc. ("Tetra Tech") (formerly Wardrop Engineering ("Wardrop")) of
Vancouver, British Columbia, and
reserve estimation and mine costing by Independent Mining
Consultants ("IMC") of Tucson,
Arizona. Geotechnical, water management and water quality
studies were conducted by Golder Associates ("Golder") of
Burnaby, British Columbia.
Environmental data were collected by Access Consulting Group
("Access") of Whitehorse,
Yukon.
In the Feasibility Study, M3 recommends that the Company proceed
with the development of Carmacks,
which is planned as a conventional open-pit oxide mine, with acid
heap leach and solvent extraction, electrowinning ("SXEW") process
facilities.
Copper North will continue its permitting efforts to secure the
required licences, so that it can proceed with project planning,
financing and execution. Subject to permitting and financing, the
Company plans to initiate basic engineering in late 2013 and
commence construction in early 2014.
Over the projected 8 years of operation, the mine is expected to
produce a total of 211.5 million pounds of pure copper cathode of
grade equal to or exceeding LME Grade A. Production is scheduled to
commence in early 2016.
Financial Analysis
Total initial capital is estimated to be $177.6 million (including a $16.67 million contingency and $5.77 million of owner's costs). Life-of-mine
cash operating costs are estimated to be $1.59 per pound of copper produced for the
current mineable reserve.
The Feasibility Study includes financial analysis on three
copper price scenarios. All three pricing scenarios assume an
exchange rate of US$1: C$1:
SEC pricing: three year historical prices, assumes a copper price of
(1) US$3.63/lb as of September 30, 2012.
Alternate Case assumes a copper price of US$3.20/lb throughout the
mine life (the alternate case copper price approximates the low end of
the 10 year copper price forward curve (source - Bloomberg as of
August 22, 2012). The Company expects the project to operate during
(2) this period; and
(3) Spot Price assumes a price of US$3.75/lb as of September 30, 2012
Table 1. Financial Analysis
SEC Price [(1)] Alternate Case [(2)] Spot Price [(3)]
US$3.63 US$3.20 US$3.75
After-tax NPV (0%)
(C$ millions) $156.0 $98.9 $171.7
After-tax NPV (5%)
(C$ millions) $86.1 $40.3 $98.7
After-tax NPV (8%)
(C$ millions) $55.0 $14.5 $66.2
After-tax IRR % 15.6% 10.0% 17.1%
Payback 4.1 years 5.3 years 3.8 years
Mining and Mineral Processing
Mine plans were developed for the Carmacks copper deposit based on delivering
ore to the crusher at the rate of 1.77 million tonnes per year
(approximately 4,860 tonnes per day). The peak total material
movement rate (ore and waste) is 13.5 million tonnes per year.
Table 2. Production Metrics
Production and Processing Metrics
LOM Average Annual Copper Production (lbs.) 30M
LOM Average Copper Grade (%) 0.977
LOM Strip Ratio 5.1:1
Total Recovery 85%
Total material is 70 million tonnes for a waste to ore ratio of
5.1 to 1. Pre-production is minimal at 953 ktonnes. The total
material movement is 9.5 million tonnes during Year 1.
The overall copper recovery has been estimated at 85% and will
be spread out over the life of the heap.
Hydrodynamic characterization tests were conducted in
May 2012 by HydroGeoSense of
Tucson, Arizona. The hydrodynamic
test results (Stacking Tests and Hydrodynamic Columns) further
demonstrate that the oxide ore at Carmacks is highly competent and permeable on
the leach pad.
Capital Costs
The total initial capital is estimated to be $177.6 million (including a $16.67 million contingency and $5.77 million of owner's costs). The capital cost
represents an increase of approximately 18% from the capital cost
estimate in the 2007 Feasibility Study.
The increase in capital cost reflects escalation in costs of
equipment, materials and labour as well as $9.7 million in additional capital for the
construction of an 11km long, 34.5 kV power line from the existing
power grid at McGregor Creek to the main substation at the
Carmacks mine site.
Table 3. Initial Capital Cost
Initial Capital Cost C$
Process, Infrastructure, Project Contingency $162.1 million
Mine Development $5.9 million
Mine Equipment Lease (during pre-production) $3.8 million
Owners Cost $5.8 million
TOTAL $177.6 million
Sustaining capital for the life of mine is estimated at
$4.73 million, which includes the
expansion of the heap leach pad (inter-lift liners, associated
grading, over-liners, geotextiles and pregnant leachate solution
("PLS") piping).
Operating Costs
Total cash operating costs are estimated at $336.9 million for the life-of-mine (or
$1.59 per pound of copper produced)
which includes mining, mine equipment lease, processing, general
and administration, and shipping costs.
Operating costs were based on an annual ore tonnage of 1.77
million tonnes and copper production of 12,800 to 15,500 tonnes of
copper cathode annually. The life-of-mine unit cost per ore tonne
is C$29.15.
Table 4. Operating Costs
Operating Costs Total Cost C$ C$ per tonne ore
Mining $183.5 million $15.88
Processing $112.2 million $9.71
General and Administration $38 million $3.29
Shipping $3.2 million $0.27
TOTAL $336.9 million $29.15
The mine operating costs are based on owner operation of the
mine. Mining equipment is leased. During commercial production
(years 1 to 7), the unit costs for mining are $2.66 per total tonne and $15.88 per ore tonne.
Mineral Reserve and Resource
The mine plan proposed by IMC is based on a resource estimate
which was prepared by Wardrop (now Tetra Tech). The resource
estimate includes historical data plus data from the 2006
exploration campaign (conducted by Western Copper Corp., now
Western Copper and Gold Corp.). The following tables (Tables 5 and
6) summarize the mineral resource and reserve estimates.
A mineral resource estimate was prepared in 2007 by Dr.
Gilles Arseneau, P.Geo., while
employed at Wardrop (now Tetra Tech) and is disclosed in the
Company's 2011 NI 43-101 Compliant Qualifying Report for the
Carmacks Copper Deposit, Yukon
Territory dated October 17,
2011 ("Qualifying Report"). A summary table of Mineral
Resources from this Qualifying Report is reproduced below for
convenience. Please refer to the Qualifying Report for complete
disclosure of the resource estimation methodology employed and
other relevant context.
Table 5. Mineral Resources
MINERAL RESOURCES AT 0.25% TOTAL COPPER CUT-OFF
Tonnage
tonnes Total Cu Oxide Cu Sulphide Cu Au Ag
Zone Category (000) (%) (%) (%) (g/t) (g/t)
Measured (ME) 2,985 1.25 1.02 0.23 0.696 6.514
Indicated (IN) 7,058 1.07 0.86 0.21 0.405 4.094
Zone 1 ME+IN 10,043 1.13 0.91 0.22 0.492 4.813
Oxide Inferred 64 0.84 0.62 0.22 0.122 1.793
Measured (ME) 614 0.48 0.37 0.11 0.211 2.414
Indicated (IN) 257 0.51 0.35 0.16 0.184 2.230
Zone 4 ME+IN 871 0.50 0.36 0.15 0.192 2.285
Oxide Inferred 23 0.41 0.25 0.16 0.139 1.871
Measured (ME) 432 0.97 0.82 0.15 0.376 4.430
Indicated (IN) 634 0.90 0.74 0.16 0.317 4.155
Zone 7 ME+IN 1,066 0.92 0.76 0.16 0.335 4.237
Oxide Inferred 3 0.81 0.64 0.18 0.179 1.665
1+4+7 Measured (ME) 4,031 1.10 0.90 0.20 0.588 5.666
1+4+7 Indicated (IN) 7,949 1.04 0.83 0.20 0.391 4.039
1+4+7 ME+IN 11,980 1.07 0.86 0.21 0.456 4.578
1+4+7 Inferred 90 0.73 0.53 0.20 0.128 1.809
Measured (ME) 695 0.80 0.02 0.77 0.261 2.542
Indicated (IN) 3,645 0.74 0.03 0.71 0.205 2.296
Zone 1 ME+IN 4,340 0.75 0.03 0.73 0.221 2.369
Sulphide Inferred 4,031 0.71 0.01 0.70 0.179 1.900
The Measured and Indicated Mineral Resources that form the basis
of the mineral reserves below (see Table 6) total 12.0 million
tonnes (oxide zones 1,4,7), at 1.07% total copper.
The estimated proven and probable mineral reserves are contained
within an engineered pit design based on a floating cone analysis
of the resource block model using the measured and indicated
mineral resource (oxides).
Total combined proven and probable mineral reserves (oxides) are
estimated at 11.6 million tonnes grading 0.977% total copper. The
mineral reserve contains 248.9 million pounds of copper, of which
it is estimated that approximately 211.5 million pounds is
recoverable. Proven and Probable Mineral Reserves were calculated
at a long-term copper price of $2.50
per pound.
Table 6. Mineral Reserves
Reserve Silver
Category Ktonnes Tot Cu (%) Sol Cu (%) Nonsol Cu (%) Gold (g/t) (g/t)
Proven
Mineral
Reserve 4,127 1.039 0.851 0.188 0.559 5.39
Copper
(Mlbs) 94.5
Probable
Mineral
Reserve 7,424 0.943 0.78 0.163 0.365 3.76
Copper
(Mlbs) 154.3
Proven &
Probable
Reserve 11,551 0.977 0.805 0.172 0.435 4.34
Copper
(Mlbs) 248.9
Notes:
- Indicated mineral resources are inclusive of mineral
reserves
- Estimate of mineral resources contained within the
Feasibility Study conforms to the Canadian Institute of Metallurgy
(CIM) Mineral Resource and Mineral Reserve definitions
(Dec. 2005) referred to in NI 43
-101
- Mineral reserves are fully diluted and are based on a
cut-off grade of 0.18% recoverable copper
Infrastructure
Copper North anticipates that Yukon Energy Corp. will serve the
Carmacks mine from the existing
Carmacks-Stewart 138 kV
transmission line built along the Klondike Highway. A new
substation (tap-off) in the vicinity of McGregor Creek would feed
an 11 km, 34.5 kV transmission spur-line to the mine's main
substation, terminating on a dead-end structure. Total project load
at the mine is estimated to be about 10 megavolt-amperes. The
proposed schedule for completion of this extension is Q3, 2015.
Copper North will provide the capital for the design, permitting
and construction of the tap-off from the existing grid, and 11 km,
34.5 kV transmission line which is estimated at $9.7 million.
Project Design Changes
The main change to the Project design involves the use of
inter-lift liners in the Heap Leach Facility at a maximum of every
three lifts (24 m). This feature is common in the heap leaching
industry and expedites the transport of PLS through the heap while
allowing lower layers to commence drain-down once leaching in those
layers is complete.
The water quality model has been upgraded to a dynamic,
GoldSim-based model that is integrated with the site wide water
balance (also in GoldSim). Integration of water quality and water
balance allows the Company to predict how variations in
environmental and operating conditions will affect water quality
originating from the site and the receiving water quality.
With respect to the Company's discharge management plan, Copper
North is adopting site-specific end-of-pipe effluent quality
standards. This end-of-pipe management approach will provide
operational certainty for the Company and clearly demonstrates how
the Company will protect receiving water quality.
The industry standard reclamation approach for closure of copper
heaps, involves surface re-contouring, together with a store and
release cap and, storm water management/diversion.
Preliminary conceptual designs for all three elements were
incorporated into the previous closure plan. However, the concepts
have now been further developed on more engineering detail.
Neutralization and rinsing of the heap, which was previously
proposed, has now been eliminated from the closure approach, in
accordance with current industry practice.
Permitting
As a result of the project design changes announced in early
March (see the Company's news release dated March 1, 2012) the Company is required to submit
a new project proposal for an environmental and socio-economic
assessment which is conducted in accordance with the Yukon
Environmental and Socio-Economic Assessment Act and administered by
the Yukon Environmental and Socio-Economic Assessment Board
("YESAB"). The Company is preparing to submit a new project
proposal to YESAB prior to the end of the year.
Once the environmental assessment phase of permitting is
completed, and a positive decision is issued by YESAB, the
regulatory phase of permitting can commence. The project design
changes along with an updated closure plan will be submitted to
Energy Mines and Resources for an amendment of the Company's
existing Quartz Mining Licence. A type A Water Use Licence ("WUL")
is required before construction of water management facilities can
commence.
Opportunities
M3 recognizes that substantial opportunities exist to enhance
the project economics, which include:
- the potential for additional oxide ore reserves within the
present mineral claims, reported additional oxide resources
off-property, but within trucking distance, and the potential of
processing oxide ore stockpiles from a nearby mine; and
- the opportunity to evaluate contract mining in lieu of
self-performance and contract crushing, as well as the evaluation
of re-conditioned equipment for haulage and select process
equipment.
The Company also recognizes the opportunity to further evaluate
known sulphide occurrences within the Carmacks property and to assess the potential
for mining and processing the sulphides at a later date.
Qualified Persons
All disclosure of scientific or technical information herein is
based on information prepared by or under the supervision of Mr.
Conrad Huss, P.E of M3. Mr. Huss is a qualified person as defined
by NI 43-101 ("Qualified Person") and has approved the content of
this news release and is also responsible for the preparation of
the Feasibility Study.
Mr. Gilles Arseneau, Ph.D.,
P.Geo. is a Qualified Person and is responsible for the preparation
of the mineral resource estimate in the Feasibility Study.
Mr. Michael G. Hester, FAusIMM of
IMC is a Qualified Person and is responsible for the preparation of
the mineral reserve estimate in the Feasibility Study.
Mr. John Hull, P.Eng. of Golder
is a Qualified Person and is responsible for the preparation of the
geotechnical, water management and water quality studies in the
Feasibility Study.
The NI 43-101 Technical Report, Feasibility Study, Volume 1,
Yukon Territory, Canada prepared
for Copper North Mining Corp., by M3 Engineering and Technology
Corporation, will be filed within the next 45 days and will be
available on SEDAR at http://www.sedar.com.
About Copper North
Copper North is a Canadian mineral exploration and development
company. Copper North's assets include the Carmacks Copper Project
located in the Yukon, and the
high-grade, stratiform-copper Redstone Property, located in the
Northwest Territories. Copper
North trades on the TSX Venture Exchange under the symbol COL.
Please visit http://www.coppernorthmining.com.
On behalf of the Board of Directors:
"Sally L. Eyre"
Dr. Sally L. Eyre
President, CEO and Director
This news release includes certain forward-looking
information or forward-looking statements (collectively
"Forward-Looking Information") for the purposes of applicable
securities laws. Forward-Looking Information includes, but is not
limited to, statements with respect to proposed exploration and
development activities and their timing and potential
mineralization; possible events, conditions or performance that are
based on assumptions about future courses of action; the timing and
costs of future exploration and development activities on
Carmacks; permitting and
infrastructure time lines and requirements; requirements for
additional water rights; and operating cost estimates.
In certain cases, Forward-Looking Information can be identified
by the use of words and phrases such as "plans", "expects" or "does
not expect", "scheduled", "estimates", anticipates", "potential",
"recommends" or variations of such words and phrases or statements
that certain actions, events or results "may", "could", "would" or
"will be taken", "occur" or "be achieved". These statements address
future events and conditions and, as such, involve known and
unknown risks, uncertainties and other factors, which may cause the
actual results, performance or achievements to differ materially
from those anticipated in such statements. Important factors that
could cause actual results to differ materially from the Company's
expectations include, among others, the timing and success of
future exploration and development activities, exploration and
development risks, market prices, exploitation and exploration
results, availability of capital and financing, general economic,
market or business conditions, uninsured risks, regulatory changes,
defects in title, availability of personnel, materials and
equipment, timeliness of government approvals, unanticipated
environmental impacts on operations and other exploration risks
detailed herein and from time to time in the filings made by the
Company with securities regulators. In making the
forward-looking statements, the Company has applied several
material assumptions including, but not limited to, the assumptions
that the proposed exploration and development of Carmacks will proceed as planned, market
fundamentals will result in sustained metals and mineral prices,
current exploration and other objectives concerning Carmacks can be achieved and that the
Company's other corporate activities will proceed as expected and
any additional financing needed will be available on reasonable
terms. Although the Company has attempted to identify important
factors that could affect the Company and may cause actual actions,
events or results to differ materially from those described herein,
there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no
assurance that Forward-Looking Information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
Forward-Looking Information. The Company expressly disclaims any
intention or obligation to update or revise any forward-looking
statements whether as a result of new information, future events or
otherwise except as otherwise required by applicable securities
legislation.
Neither the TSX Venture Exchange nor
its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For further information:
Peter Oates, Manager, Investor
Relations
Tel: +1-604-638-2505
Email: info@copperrnorthmining.com
Web: http://www.coppernorthmining.com
Renmark Financial Communications
Tel: +1-514-939-3989
Email: info@renmarkfinancial.com
Web: http://www.renmarkfinancial.com
