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Overview Nevada Copper is a small cap junior mining firm
developing the Pumpkin Hollow deposit
In the first 10 years of production, their underground mine is expected to generate 710 Mlbs of copper, and their open pit mine is expected to generate 2090 Mlbs of copper
In spite of some downside potential, this company is significantly oversold
Underground Mine This mine will be the first to be developed, at an initial capex
cost of $329M
Predicted to produce copper at $1.21/lb for the first five years, rising to $1.63/lb after
Production expected to late 2015
Open Pit Mine This mine will be developed later, funded by profits from
the underground mine, at an initial capex cost of $950M
Expected to produce copper at $1.69/lb for the first 10 years
Thesis In October, an institutional investor holding a 19.5% stake
began to divest over a period of six weeks
Momentum Effects helped to push the price down further over the same period
By December, the price had declined ~50% and has yet to recover
Price target: $3.00
Comparison
Downside Potential The global copper market could shift
They need to secure access to an additional $75M of funding in order to finance the construction of the underground mine
This venture requires additional governmental permits for access to neighboring land
Copper (US cents/lb)
233.5
341.7
399.7
360.5
334.0 335.7 322.6 315.2 310.0
332.0
0
50
100
150
200
250
300
350
400
450
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: EIU
Funding Additional funding should be easily acquired by the sale of
a gold or silver stream
The underground mine is expected to generate 167,000 oz of gold and 2.7M oz of silver in the first 12 years of operation
Questions?
