NovaCopper - A mining company with a mission

NovaCopper - A mining company with a mission

NovaCopper Inc. (NYSE-MKT, TSX: NCQ) is a mining company with a mission. Since incorporating in 2011, the company has been actively advancing exploration efforts into its Upper Kobuk Mineral Projects (UKMP) in the Ambler Mining District of Alaska. The project, which encompasses two deposits rich in copper, zinc, lead, silver, and gold, entails a unique relationship with NANA Regional Corporation and local communities to successfully explore and develop this high-grade and prospective polymetallic district.  

New Frontier

Stretching approximately 353,000 acres in the remote part of northwest Alaska, the Upper Kobuk Mineral Project is comprised of two main sites – the Arctic Deposit and Bornite Deposit. Although these locations were discovered in the early 1950s, little exploration has been conducted.

“The project hasn’t had much exploration in the past but we’ve had phenomenal results,” says Patrick Donnelly, vice president of corporate communications. “We’re discovering more high-grade copper, specifically the south rezone that’s never been drilled before.”

The Arctic deposit represents one of the most advance projects on the property as it hosts one of the highest-grade VMS deposits in the world. Having recently completed its Preliminary Economic Assessment (PEA) in July 2013, the report demonstrates an immense economic potential for developing an open pit high-grade copper-zinc-gold-silver project in the area. The assessment shows a minimum 12-year mine life supporting an average annual payable production projected to be 125 million pounds of copper, 152 million pounds of zinc, 24 million pounds of lead, 29,000 ounces of gold, and 2.5 million ounces of silver for life of mine.

The Bornite deposit consists of two mineralized zones: Ruby Creek Zone and South Reef Zone. Previous exploration work with drilling programs in 2011, 2012 and 2013 has yielded some of the best results seen in the copper mining industry in more than a decade. The various studies have proven the mineral inventory at the Bornite deposit now contains:

  • Indicated in-pit resources of 14.1 million tonnes grading 1.08 percent copper (at a cutoff grade of 0.5 percent copper) or 334 million pounds;
  • Inferred in-pit resources of 109.6 million tonnes grading 0.94 percent copper (at a cutoff grade of 0.5 percent copper) or 2,259 billion pounds;
  • Inferred below-pit resources of 55.6 million tonnes grading 2.81 percent copper (at a cutoff grade of 1.5 percent copper) or 3,437 billion pounds.

The project also represents a unique agreement between NovaCopper and NANA Regional Corp. The agreement consolidates their respective land holdings in the district and entrusts NovaCopper with the opportunity to explore and develop the two deposits under one agreement. The Company is positioning itself to begin the next phase of the mining endeavor, reviewing options to best realize additional value from UKMP.

Bulls-eye approach

With the help of NANA, the company has built a fruitful relationship with local communities in the area. As the cornerstone of NovaCopper’s business strategy, community engagement and participation are imperative. According to Donnelly, the company has a bulls-eye approach to working with local communities. “We have a policy of having a least 50 percent of our employees originating from the area. We have a commitment to NANA and it’s worked out quite well for us.”

NovaCopper implements strict environmental and safety precautions at UKMP. Along with employing on-site safety training and safety equipment to its entire workforce, safety meetings are held weekly to address specific topics and developments. The company’s employee-based safety committee proactively recognizes and reports safety issues to camp managers; ensuring safety is a number one priority.

Environmental stewardship also plays a vital role in NovaCopper’s bulls-eye approach. The company takes all necessary steps to carefully plan and design mining efforts to reduce environmental impact to the community.

“We have a pretty strict environmental policy in terms of what we’re doing now,” says Donnelly. “All the work we conducted in the PEA was to minimize our footprint and provide as much detail as possible pertaining to environmental stewardship.”

Next step

The company is ready to take the next step and begin its feasibility study into the UKMP. One of the main challenges ahead for the company is getting a 200 mile road built for the project. Because the remote area requires the assistance of a fly in/fly out helicopter operation, the company is aggressively working with government agencies to permit and build the road, which is crucial to the continuance of the project.

“We’ve had great support for the road,” says Donnelly. “The governor of Alaska has supported this project greatly and incorporated it into his Road to Resource program.” The program aims at initiating works with state agencies, resource developers, and other interested parties to design and build projects that support development of natural resources in the oil and gas, alternative energy, mining, timber, fisheries, and agriculture industries.

Permitting for the 200 mile road has commenced and if everything goes accordingly to plan, the road should be ready for construction by 2017. A similar challenge occurred with the Red Dog Mine, a zinc-lead mine located in close proximity to UKMP. The connecting road was built and had tremendous success in the area, displaying a great example of the potential the road has.

“It’s been a great model for us as we’re looking at building a job similar to Red Dog,” says Donnelly. “Luckily NANA has done this before so we’re excited to get things going.”