Contact Copper Project

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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.

Contact Copper Project

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.

Location

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.

Contact Copper Project - Overview Contact Copper Project - Geology

Geology

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.

Previous 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.

Contact Copper Project - Drill Map

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)
Measured 0.21 75,473 313,968
Indicated 0.19 137,640 517,526
Total Measured + Indicated 0.2 213,113 831,494
Inferred 0.2 12,982 52,188

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)
Proven 0.23 57678 263249
Probable 0.21 83416 348499
Total Proven + Probable 0.22 141094 611748
2013 Pre-Feasibility Hi-Lights and Sensitivity
Parameters Contact
Location Elko County, Nevada
Ownership 100%
Stage Completed PFS
Mine Type Open-Pit
Processing Heap Leach & SX-EW
Mine Life 9.4 years
Initial Capex (incl. Contingency) $188.9M
Avg. Ore Production Rate 41,000 tpd
Recovery 76% Cu
Strip Ratio 2.3:1
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%

Note: Project economics calculated at $3.20/lb Cu.

Price/Opex/Capex Sensitivity After Tax NPV - 8%

The economic results are most sensitive to changes in copper price. At a copper price of $2.90 per pound, the Project cash flow generates an after-tax IRR of 15.9% and NPV-8% of $45 million. At a copper price of $3.50 per pound, the after-tax IRR is 35.2% and the NPV-8% is $167 million.

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
Description Cost (000)
Direct Costs
Site Preparation $2,688
Mining Equipment 50,332
Crushing 11,533
Conveying 6,838
Pad & Ponds 26,146
SX-EW Plant 36,339
Infrastructure 11,050
Reagents & Initial Fills 2,532
Direct Costs Total $147,459
Indirect Costs
Construction Indirects $2,838
Contingency (@20%) 19,425
Contingency Mine Equip. (@10%) 5,033
EPCM 7,095
Freight, Mobilization 2,365
Owners Costs 4,730
Indirect Costs Total $41,486
Capital Costs Total $188,945
Table 1-5 Operating Costs
Operating Cost Total Cost (000) $/lb Cu $/ton Ore
Mining $424,936 0.92 3.01
Processing 325359 0.7 2.31
G&A 30001 0.06 0.21
Property Tax 16913 0.04 0.12
Cash Operating Costs 1.72 5.65
Royalties 0.01 0.03
Total $797,209 $1.73 $5.68

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
Total 1250