FOR IMMEDIATE RELEASE
NEWS
RELEASE
Nord Resources Corporation
1 Wetmore Road, Suite 203
Tucson, Arizona 85705
Tel: (520) 292-0266 Fax: (520) 292-0268
Nord Resources Corporation Announces
109% Increase in Reserves and Updates Status of Johnson Camp Mine
October 19, 2007
SOURCE: Nord Resources
Corporation
TUCSON, Arizona., October 19,
2007 - Nord Resources Corporation (“Nord” or the “Company”)
(Other OTC: NRDS.PK
- News) announced
today an update of its reserve estimate for the Johnson Camp Mine and provided
an update on the status of restart of the Johnson Camp Mine.
Proven and Probable Reserve Increase
The Company is pleased to report a 109% increase in its proven and probable
reserve estimate. This reserve increase is primarily due to an increase in
copper price utilized for mine modeling: previous reserve estimates were based
on $0.90 copper, whereas current pits are based on a copper price of $1.50.
As shown in the following table, the updated proven and probable reserve
estimate as of September 2007 is 73.4 million tons of ore at an average total
copper grade of 0.335% total copper based on a copper price of $1.50 per pound
and a stripping ratio of 0.66 to 1:
Reserves |
||||
Category |
Tons (thousands) |
Grade (% Copper) |
Cu Pounds Contained (thousands) |
Cu PoundsRecoverable (thousands) |
Proven Reserves |
54,977 |
0.338 |
318,540 |
245,279 |
Probable Reserves |
18,410 |
0.327 |
173,482 |
128,863 |
Total |
73,387 |
0.335 |
492,022 |
374,142 |
The updated reserve estimate is based on the Johnson Camp Mine Project Feasibility
Study and Technical Report prepared by Michael Bikerman, Ph.D., P.G., David
Bikerman, M.S., E.M, and Thomas McGrail, E.M., all of Bikerman Engineering
& Technology Associates, Inc. The report was prepared pursuant to National
Instrument 43-101 of the Canadian Securities Administrators and the reserves
are compliant with CIM and SEC Guide 7 guidelines. Michael Bikerman, David
Bikerman and Thomas McGrail are all independent to Nord and are “Qualified
Persons” within the meaning assigned in National Instrument 43-101.
In addition to the above mentioned reserves, mineralized material is contained
in the Burro and Copper Chief deposits at the Johnson Camp property and was
estimated using the guidelines established in, and is compliant with, National
Instrument 43 101 standards. In addition, the Company has numerous other prospects
of mineralized material that remain to be explored and tested
Economic Analysis
The feasibility study includes an economic analysis of the Johnson Camp Mine
based on the mine plan, current capital and operating cost estimates, and
a three-year trailing average copper price of $2.45 per pound over the life
of the mine. Bikerman Engineering & Technology Associates has concluded
in the feasibility study that resumption of operations at the Johnson Camp
Mine in accordance with the mine plan will generate positive discounted cash
flows over a 16 year mine life at 8%, 15% and 20% discount rates.
Based on the feasibility study and technical report, the Company expects the
Johnson Camp Mine to produce approximately 25 million pounds of copper per
year, for an anticipated mine life of 16 years and estimated initial capital
expenditures of approximately $28 million. These and other figures referred
to in this news release do not represent a forecast by the Company of copper
prices, discount rates or expenditures.
The economic analysis of the Johnson Camp Mine is based on the mine plan included
in the technical report, capital and operating estimates as of the second
quarter of 2007, and, as indicated above, a three year trailing average copper
price of $2.45 per pound (New York Commodity Exchange) for the life of the
mine. The economic analysis was developed by Bikerman Engineering & Technology
Associates using a production schedule derived from reserve estimates. The
economic analysis resulted in an net present value (“NPV”) of
8% of $176 million, an internal rate of return (“IRR”) of 77%
and a payback of 1.6 years.
The following table indicates the after-tax NPV and IRR of the Johnson Camp
Mine at various copper prices using the foregoing reserve estimates.
Copper Price/lb |
$2.13 |
$2.45 |
$2.82 |
$3.19 |
$3.55 |
NPV@ 8%(1) |
$118(1) |
$176(2) |
$243(2) |
$310(2) |
$377(2) |
IRR |
60% |
77% |
93% |
108% |
122% |
(1) The economic analysis does not reflect the impact, if any, of the company’s federal and state net operating loss carryforwards.
(2) $ in millions
President and CEO, John Perry commented, “We are pleased with the significant
increase in proven and probable reserves. These results, along with the results
of our current drilling program underway at Johnson Camp, will be evaluated
to determine the viability of potential future production increases.”
Status Update of Restart of Johnson Camp Copper Mine
The Company is pleased to report the progress of the restart of the Johnson
Camp Copper Mine in Arizona, which was previously announced on July 5, 2007.
The Company’s mine operating plan calls for residual leaching of the existing
old dumps and an active leach program of newly mined ore.
Start-up is on schedule for initial copper production from residual leaching
operations to commence in December 2007, and copper production from new ore
placed on the heaps commencing in August 2009. Our goal is to complete the first
copper cathode sale by December 2007. The restart plan includes estimated production
of 25 million pounds of copper cathodes per annum with estimated copper cathode
production of 12.5 million pounds for calendar year 2008.
The following progress has been made relative to the restart of Johnson Camp:
Residual Leach Operations
Key operating staff hired and on site Electrification of facility completed Reconstruction of the main raffinate pond is nearly complete Rehabilitation of the solvent-extraction plant is proceeding on schedule Rehabilitation of leaching circuit is nearly complete Resumption of application of sulfuric acid to the existing heaps to commence in late October- Movement of material from heap number 1 and 2 to other leach areas by the mining contractor is well underway
Key operating staff hired and on site Primary crusher has been relocated from Nevada to the Johnson Camp Mine Secondary crushing system and agglomerator have been ordered with expected delivery on schedule
Nord Resources Corporation
John T. Perry
(520) 292-0266
www.nordresources.com
Forward-Looking Statement Disclaimer
This press release includes certain statements that may be deemed "forward-looking
statements”. All statements in this release, other than statements of
historical facts, that address future financing, development, copper processing
and mining activities of Nord are forward-looking statements. Factors that
could cause actual results to differ materially from those in forward-looking
statements include, but are not limited to, the market price of copper, general
economic, market and business conditions, statements or information with respect
to known or unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements or information.
Forward-looking statements or information are subject to a variety of risks
and uncertainties which could cause actual events or results to differ from
those reflected in the forward-looking statements or information, including,
without limitation, risks and uncertainties relating to the Company's plans
at its Johnson Camp Mine Property and other mineral properties, the interpretation
of drill results and the estimation of mineral resources and reserves, the
geology, grade and continuity of mineral deposits, the possibility that future
exploration, development or mining results will not be consistent with the
Company's expectations, metal recoveries, accidents, equipment breakdowns,
title matters, labor disputes or other unanticipated difficulties with or
interruptions in production and operations, the potential for delays in exploration
or development activities or the completion of feasibility studies, the inherent
uncertainty of production and cost estimates and the potential for unexpected
costs and expenses, commodity price fluctuations, currency fluctuations, failure
to obtain adequate financing on a timely basis, the effect of hedging activities,
including margin limits and margin calls, regulatory restrictions, including
environmental regulatory restrictions and liability, the speculative nature
of mineral exploration, dilution, competition, loss of key employees.
Investors are cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ materially
from those projected in the forward-looking statements. In addition, Nord’s
business and operations are subject to the risks set forth in Nord’s
most recent Form 10-KSB, Form 10-QSB and other SEC filings which are available
through EDGAR at www.sec.gov. These are
among the primary risks we foresee at the present time. Nord assumes no obligation
to update the forward-looking statements.