Nevada Copper's Pumpkin Hollow project in the US. Photo: Nevada Copper

Nevada Copper's Pumpkin Hollow project in the US.
Photo: Nevada Copper

 
 

Tim Oliver's Death List

Issue 144, November 2015

Continued from Page 1 ➤

Nevada Copper, backed by mine lender Red Kite and Switzerland's Pala Investments, is sitting on a market cap of C$76m ($58m), but its Pumpkin Hollow project is battling borderline economics and an unreported engineering blunder.

“They've done a beautiful job on permitting, I'll give them all the high marks in the world for that,” Oliver says, but contractors hit unexpected levels of groundwater early last year, flooding the mine shaft and leading to progress of inches per day. The incident was never reported to the stock exchange.

Instead, under an announcement titled “Nevada Copper Achieves Major Milestones”, management said it had drilled two “fully commissioned” dewatering wells.

Troy Resources

Troy Resources, which is building the Karouni gold mine in Guyana, has also tripped through some of the telltale indicators of a major engineering mishap, including management replacements, scheduling changes and a top-up financing in May.

“The capital cost was way too low and the schedule was way too tight,” Oliver believes. “Troy said they could build it for $87m and my calculations showed that it should be $100m or more.”

High quality engineering is a philosophy that some small companies do have, he says, citing Idaho's Midas Gold, led by geoscientist Stephen Quin, or Michigan-based Highland Copper, backed by mine-builder Osisko. Kaminak Gold, he says, is also taking a patient approach to scheduling and studies at its Coffee gold project in the Yukon.

“Some companies kind of just blunder their way through, and then there are other companies that seem to operate at a higher level of quality in everything they do. They always have good equipment, good operations, the best people. And I definitely think that's a surer path than just taking your chances.”

Email Tim Oliver at tim@timoliver.us

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