Large contractors miss Pumpkin Hollow mine contract

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Development crews are about to head back underground at Pumpkin Hollow in Nevada, USA

Idaho-based Small Mine Development has started mobilisation of equipment and crews for its two-year mine development contract at Pumpkin Hollow in Nevada, USA, as owner Nevada Copper Corp makes a last ditch bid to get its US$200 million underground copper mine on track.

Nevada Copper, which recently bedded down a US$123 million “restart financing package” to get the Pumpkin Hollow mill and mine back up and running after its mid-2022 suspension, announced in February this year a $12 million contract had been awarded to Canada’s Dumas Contracting to complete vital underground capital works.

Nevada Copper said at the time it had completed the bid process for a development mining contractor and was in the “final stages of negotiations for a unit rate contract with an internationally recognised major mining services contractor”.

As well as Dumas, part of Peru’s Stracon group, Pumpkin Hollow has seen the likes of Redpath and Cementation come and go. Dumas is a mid-sized underground development and mining contractor but it is doing equipment installation and remedial work at Pumpkin Hollow.

“Redpath replaces the previous mining contractor [Cementation] and will be the company’s principal underground mining contractor going forward,” Nevada Copper said back in January 2020. “Redpath is a highly experienced mining contractor with experience of delivering complex projects both internationally and in Nevada, ahead of schedule and under budget.”

Nevada Copper describes the 41-year-old Small Mine Development (SMD) as a “well-respected underground development contractor with significant experience in underground mining in the United States, and particularly in Nevada”.

“Partnering with SMD is an effective way to ensure we have the ore stopes available to achieve and maintain our planned steady state production rate of approximately 5000 tons per day,” Nevada Copper CEO Randy Buffington said.

Financial details of the partnership were left out of Nevada Copper’s market statement.

SMD is contracted to complete about 20,000m of underground lateral development contract. It’s also charged with delivery of fully developed ore stopes this year to enable the owner to restart and maintain nameplate (circa-5000tpd) milling operations.

“Nevada Copper will self-perform stope mining in addition to managing ore and waste handling and underground stope ground support services, allowing each group to focus within their specific expertise,” the company said.

It built a plant and production shaft at Pumpkin Hollow in 2019 and started selling concentrate at the end of that year. It then ran into problems with COVID but more crucially underground geotechnical issues that would multiply. In mid-2022 the company said an “unidentified weak rock structure was encountered in the main ramp to the East South Zone” that cut access to vital stoping areas.

Production constraints coupled with Nevada Copper’s precarious financial position led to the decision to suspend operations to try to stem losses while thorough geotechnical investigations and a restructuring plan were finalised.

The company said this month lateral development beyond a problematic dyke into the East North Zone continued to “demonstrate competent ground conditions, as anticipated” by its revised geotechnical modelling.

“Underground electrical infrastructure is in place to support the development contractor’s ventilation requirements,” it said.

“A key ventilation raise in the 2798 level is in progress and expected to be completed by the end of May 2023. This ventilation raise is critical to providing air circulation to all active areas of the mine.”

Buffington said Nevada Copper continued to target a September-quarter mill restart “with a quick ramp up to nameplate capacity by the end of 2023”.

Pumpkin Hollow has underground reserves of 23.9 million tonnes grading 1.74% copper-equivalent (including gold and silver) that Nevada Copper believes it can grow. It also has circa-five billion pounds of copper in potential opencut resources.

Nevada Copper had about $6.9 million of cash and receivables at the end of March this year.

The TSX-listed company has a market capitalisation of about C$212 million at its current 29c trading price.


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