Engineering & Mining Journal

OCT 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 14 of 91

REGIONAL NEWS - U.S. & CANADA OCTOBER 2018 • E&MJ 13 UNLOAD on the success of the recent transition to the sublevel shrinkage mining method (SLS) in the lower part of the mine, the company initiated an internal evaluation of similar underground mass-mining ap- proaches for all of the near-surface re- sources as an alternative to a pushback of the existing Roby open pit proposed in the prior 2017 feasibility study. The pos- itive results of this evaluation prompted the commissioning of the feasibility study. The previously planned pushback of the dormant Roby open pit is now replaced by an expansion of the under- ground mine using bulk mining methods to extract maximum value from several near-surface resources outside the orig- inal mine plan. Mine life has been ex- tended by one year to 2027 with average underground production increasing from 6,000 metric tons per day (mt/d) to more than 12,000 mt/d and includes a total of 40.9 million mt of underground and surface reserves at an average palladium grade of 2.31 g/t, yielding 2.32 million ounces of payable palladium production. The study also includes improved key financial metrics, including total revenue of $3.64 billion, total EBITDA of $1.51 billion and after-tax NPV of $637 million, generated by an average operating margin of 43% ($37.86 per tonne of ore milled). Annual after-tax cash flows of between $52 and $144 million, totaling $909 million over the life of the mine was also included in the study. "The new mine plan outlined in the feasibility study generates increased cash flow by optimizing resources previously included in the Roby open pit pushback plan and by adding reserves that were previously sterilized by the open pit de- sign," Jim Gallagher, president and CEO of North American Palladium, said. "LDI continues to be one of the lowest cost underground mines in Canada. This new approach will take full advantage of LDI's large, lower-grade near-surface resources and allow for the mining of more resourc- es at an improved grade than contemplat- ed in the prior 2017 feasibility study." Nevada Copper Building Underground Mine at Pumpkin Hollow, Nevada Nevada Copper has transitioned from pre-construction works to full-scale con- struction at its 100% owned Pumpkin Hollow underground copper project 10 miles southeast of Yerington, Nevada, which in turn is an approximate 80-mile drive southeast of Reno. The underground deposit measures approximately 2,000 ft by 1,200 ft and consists of flat-lying to gently dipping, bedding-controlled, stacked mineralized zones within the limestone of the Mason Valley formation at depths of 1,400 ft to 2,200 ft. Underground development at Pumpkin Hollow benefits from an existing 1,910-ft- deep, 24-ft-diameter, concrete-lined, pro- duction-sized Main Shaft, its associated headframe and 12-ft-diameter hoist, more than 600 ft of lateral mine devel- opment, compressors, dewatering wells, diesel storage facility, explosives maga- zine, and monitoring wells. Ground sup- port has been installed to the full depth of the shaft, and a concrete lining has been installed to a depth of 1,888 ft. The first activity in the current mine development schedule is to sink the Main Shaft to a final depth of 2,147 ft. The un- derground production rate is planned at 5,000 short tons per day (st/d), followed by flotation concentration to produce ap- proximately 114,117 st/y of wet concen- trate grading 26% copper. First concen- trate production is planned for the fourth quarter of 2019. Capital expenditures to construct the project are estimated at $197 million. The Pumpkin Hollow concentrate is projected to be very clean, with few pen- alty items. It will contain low levels of ar- senic and moderate levels of gold. Transverse longhole stoping has been selected as the optimal mining method for all zones, based on safety, mining recovery and dilution, productivity, and the ability to mine large spans given the ground conditions. Stopes will be ex- tracted through a bottom-up sequence, reducing lead time and requirements for upfront development in most instances. Underground development is based on proven reserves of 7.4 million st at grades of 1.85% copper, 0.007 oz/st gold, and 0.144 oz/st silver and probable reserves of 16.5 million st at grades of 1.47% copper, 0.006 oz/st gold, and 0.138 oz/st silver. Nevada Copper has awarded the contract for shaft sinking and under- ground mine development work to Ce- mentation USA Inc. This contract follows an earlier pre-works program carried out (Continued on p. 28)

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