Nevada Copper (TSX: NCU) announced on Monday it has started production at the Pumpkin Hollow mine in Yerington, Nevada, becoming the first new copper producer in the country in the last decade. First shipment of concentrate and first revenues are expected in coming weeks, added the company.
In a media statement, Nevada Copper CEO Matt Gili said it was a “transformational moment” for the company, which only 16 months ago took a construction decision. Nevada Copper has spent about $200 million to develop the Pumpkin Hollow mine.
Ramp-up to full-scale commercial production at Pumpkin Hollow underground is underway through the first half of 2020.
The underground operation is expected to produce 65 million pounds of copper-equivalent a year at an all-in sustaining cost of $1.86/lb, nearly 50% below current copper prices. Its current mine life is 13.5 years.
The mine opens just as copper prices recently started to rise sharply and are projected to go higher due to increasing demand from the electric vehicle industry. According to Reuters, copper deposits in the US alone have drawn nearly $3 billion in recent investments from both small and large miners.
Analysts at Fitch Solutions predict that US copper production is set to grow by 2% in 2020. They noted that US miners such as Freeport-McMoRan are already positioning themselves for long-term recovery in global copper demand.
Nevada Copper plans to finish a feasibility study by the end of next year on whether to construct a nearby open-pit mine. The company controls about 22,000 acres in northern Nevada, and the underground mine itself is located 60 miles (100 km) from Tesla’s Gigafactory in the state’s northern edge.
(With files from Reuters)