Nord Resources Issues Progress Report on Johnson Camp Mine

Nord Resources Issues Progress Report on Johnson Camp Mine

Nord Resources Corporation, which is ramping up copper mining and processing operations at its Johnson Camp Mine in Arizona, today issued a progress report on its success at increasing production to the targeted production rate of 25 million pounds of copper per year.

Nord Resources focused during 2008 on executing its plan to reactivate the Johnson Camp Mine, while it continued to extract copper by carrying out residual leaching of the existing ore heaps. This enabled the company to produce approximately 2.9 million pounds of copper in 2008. After receiving a required Air Quality permit in August 2008, the company was able to proceed with the construction needed to reactivate the mine. Nord completed the construction in January 2009 and in February it commenced producing and processing new ore.

“In ramping up our production rate of new ore, we have experienced encouraging success as well as some short-term challenges that resulted in a total production rate that is currently below our expectations,” said John Perry, president and chief executive officer. “These issues are not unusual in our industry and are only affecting the timing of reaching our target of 25 million pounds of copper production per year. We fully expect to achieve that level, but it is going to take longer than we had planned.”

“During this ramp up stage,” said Randy Davenport, vice-president and chief operating officer, “we have made significant progress with a focus on increasing operating efficiencies. Continual optimization of mine plans is an important activity at any mine and we specifically have changed the mining pushback sequences that will allow us to achieve higher mine grades earlier in the mine life. We have achieved design crushing throughput rates on a daily basis and are currently making modifications to the crushing plant that will allow us to sustain designed throughput rates on a continuous basis. These measures include modifications to the conveyor chutes and belt skirting to handle variations in the ore characteristics and installation of two vibratory feeders that will allow choke feeding the secondary crushers to improve particle size and liner life. Mr. Davenport added.

The leaching characteristics of the ore have behaved as expected, but the challenge has been to predict the length of time required for the new solution to report through the old, existing pads.

“We are placing newly crushed ore on top of the old ore on existing leach pads. Every pad has its own distinctive characteristics and can vary depending on whether the old material on the pad was run-of mine or crushed and whether historic channeling occurred, and the depth of the old leach pad. “To reduce this uncertainty,” Mr. Davenport continued, “we contoured, compacted and installed a french drain on the pad we currently are stacking on and it has significantly reduced the time for solution to report directly to the plant.

These and other changes are expected to cost approximately US$750,000 and will put us on track to achieve the design copper production of 25 million pounds per year rate this year.

“Our outlook is benefitting, of course, from the significant improvement in copper pricing that has taken place in recent months,” said Mr. Perry, “as well as the marked decline in the cost of sulfuric acid, which is our single most significant variable cost. However, the temporary delay in the ramp up of our production rate will negatively impact our cash flow in the short term. Accordingly, we will be proceeding with a brokered financing of approximately $5,000,000 to be used for working capital, modifications discussed above and for general corporate purposes.

“We also continue to intend to carry out an evaluation later this year of opportunities to increase our production rate beyond the 25 million pounds level through incremental expansions,” Mr. Perry said.

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