Copper mine moves forward in Yerington
Yerington mulls new home for music festival
Night in the County, the popular music festival held each summer in Yerington, may get a new home in the next few years.
The December passage of a land transfer bill approving sale of 10,400 acres of Bureau of Land Management lands to the City of Yerington creates several development possibilities for the city.
Dan Newell, Yerington city manager, says the city has tentative plans to develop 1,500 acres into a commercial/industrial park to serve the nearby Pumpkin Hollow copper mine that’s being put into play by Nevada Copper.
“It would be a through-the-fence operation,” Newell says. “If they wanted to service their big trucks they could just drive them right over. It really helps out with ancillary businesses that can supply a mine.”
Another 900 acres may be used to develop a solar power generation facility, Newell adds. The city also is looking to create a permanent venue for Night in the County, which attracts more than 15,000 country music fans to Lyon County each July. The event and thousands of campers that descend on Yerington each summer long ago exceeded capacity at Lyon County Fairgrounds, Newell says. The event now is held on a rented stage northeast of the fairgrounds.
The city has tentative plans to develop 300 acres into an amphitheater and camping facilities and could have the new venue ready by 2017, Newell says. Permits for an additional 1,500 campers were added this year as well, he says.
Attendance at Night in the County far exceeds the population of Yerington and the entire Mason Valley. Yerington is about 3,000 residents, and the valley holds about 9,500 people.
“We don’t know for sure what we will do,” Newell says. “Right now it’s impossible to grow the event. Hopefully this allows to it grow — it certainly put Yerington on the map.”
The new year is shaping up to be an eventful one for Nevada Copper.
After working since early 2011 to get 10,400 acres of federal land transferred to the City of Yerington, Nevada Copper in mid December finally saw that goal realized. The transfer of land allows Nevada Copper to proceed with plans to develop a large open-pit copper mine on 3,800 acres of former federal land that surrounds the company’s underground copper mine on 1,200 acres.
Nevada Copper on December 30 also finalized reworking the terms of a loan agreement with Red Kite Mine Finance Fund from 2013 that pushes back repayment of $200 million in funding until 2020 and provides Nevada Copper with additional funds. Nevada Copper will use the funding to complete drilling of a 2,140-foot shaft needed to access copper ore at its Pumpkin Hollow underground mine.
As of the first week of January the company had sunk the 24-foot diameter concrete-lined shaft to a depth of approximately 1,600 feet and expects to reach target depth in March or April. Once it hits a depth of 1,906 feet, miners will start lateral drifting of tunnels to create space for underground mining equipment and to conduct further exploration drilling to improve underground mineral reserve estimates.
The reworked loan agreement also provides the company with additional liquidity as well as an additional $110 million in financing once Nevada Copper hits certain project milestones. Red Kite already has advanced $90 million in funding to Nevada Copper, which ended 2014 with $10 million in cash on its books.
Tim Dyhr, vice president of external and environmental relations for Nevada Copper, says that successful passage of the land transfer bill allows the company to proceed with the state-level permits and mining feasibility study needed to advance the open-pit mine.
“It expedites the much bigger Stage 2 project,” Dyhr said. “If we had not gotten the land transfer we would have to go through a two- to three-year federal permitting process.
“The financing allows us to move forward on Stage 1 and gives us the ability to continue developing the property, do engineering and procurement work while we look for financing for Stage 2. We are moving Stage 1 forward — one way or another we will be getting positive cash flow in a few years.”
Despite the positive developments, Nevada Copper still must negotiate some difficult conditions in the global commodities markets. Nevada Copper still needs to raise nearly $1 billion to develop the open-pit mine and construct an ore processing facility.
However, Dyhr said that passage of the land transfer bill takes a lot of uncertainty about the open pit mine out of the story and significantly improves Nevada Copper’s ability to attract project financing.
“It changes the perception of the project in the international market,” he said. “The biggest barrier for mining projects in the U.S. is regulatory uncertainty — can you get permits in a timely fashion? This gives us more leverage and flexibility in the work we have done for financing.”
Still, Dyhr acknowledges that securing that much financing won’t be easy.
“We have to confront trying to get $1 billion in this market — it is going to take some time,” he said. “But in today’s mining investment arena, having a major investment house invest $200 million in a rotten market is a good sign. There is a positive perception of Pumpkin Hollow. It’s a good resource in a good location, and Nevada is the best mining jurisdiction in the U.S.”
The company based in Vancouver expects to mine an average of 75 million pounds of copper each year for the first five years once underground mining begins in 2016, and it expects to mine an additional 221 million pounds of copper annually from the open pit mine. Proven and probable reserves at both mine sites are an estimated 5.2 billion pounds of copper, nearly 1 million ounces of gold and 33 million ounces of silver.
Nevada Copper will spend the early part of this year revising its project schedule and also begin construction of a 6,500-ton-per-day mill to process ore mined from the underground operation.