Good news for Nevada Copper (NCU.TO) from the United States Senate as it has approved the NDAA with 89 votes in favor of the proposal whereto the Yerington land bill was attached. This didn’t really come as a big surprise as we already discussed our expectations to see the land bill approved before the end of this year in our update report two weeks ago.
As the company announced last week that its land bill was attached to the NDAA which usually gets approved every year (this year was the 52nd consecutive time the bill got approved), it looks like we’re seeing the text book example of ‘buy on the rumor, sell on the news’ on the market. Even though Nevada Copper’s share price opened higher, it immediately started to give back its gains.
We considered the land change bill to be one of the major pieces of the puzzle as this will make the permitting for the large open pit mine much easier. An updated feasibility study will be published in Q1 2015, and we are expecting to see some small improvements (a slightly lower initial capex and higher NPV). Now the permitting process will be very straightforward, we expect Nevada Copper to accelerate its discussions with potential strategic partners which will very likely result in NCU selling a minority stake in the second phase of the Pumpkin Hollow project.
2015 will be a pivotal year as Nevada will finalize funding for Pumpkin Hollow Phase I and a lot of milestones will be achieved on the Second Phase of Pumpkin Hollow. With the land change bill now being approved, Nevada Copper has been de-risked a little bit more.
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Disclosure: The author holds a long position in Nevada Copper. Nevada Copper is a sponsor of the website. Please see our disclaimer for current positions.
