Nevada Copper (TSX: NCU) continues to encounter issues at its Pumpkin Hollow copper mine in Nevada. The latest issues have resulted in the company being forced to find additional liquidity as its operations continue to burn capital.
Reduced production is expected from the underground mine at Pumpkin Hollow, which is a result in “operational and geotechnical challenges” encountered in late May by the company. A weak rock structure was encountered by the company, which requires further reinforcement before work can proceed.
The result, is that stopes that were planned to be mined in June and July at the project are now being delayed to that of August. Combined with other issues facing the project, including limited main ramp access, long backfill cycles, and slow development, has led to poor ore production.
A full analysis on just how much this is set to impact production in the near term is being analyzed by the company. The company had previously guided production ramp ups to 3,000 tons per day in the second quarter, and 4,000 – 4,500 tons per day in the third quarter. It is not yet clear just how much that guidance will be impacted as a result.
The company is now working towards accessing the east north stopes which are believed to have “significantly higher copper grades” along with better geotechnical conditions. Access is expected to be established by the end of the month to this region, via a second dike crossing.
The poor performance has led the firm to implement cost reductions across its operation, including reducing its contractor workforce. The company has also sourced a US$20.0 million promissory note from Pala Investments, which bears interest at 8% and is due at the end of 2023.
Additional required financing is also in the process of being sourced by the firm. The company has indicated that if additional financing is not found, “the company may not be able to continue to carry on business in the ordinary course.”
Nevada Copper last traded at $0.485 on the TSX.
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