Nevada Copper Corp. (TSX: NCU) announced late on Thursday that it has agreed to non-binding terms with its key financing partners for US$93 million liquidity. The financing package is expected to be used on the restart and ramp-up of the Pumpkin Hollow copper mine, which was halted due to lack of funds.
“I am very pleased with the substantial ongoing support of all our key stakeholders. The significant contribution by each of them is a testament to the conviction in the quality of the Pumpkin Hollow project and its intrinsic value,” said CEO Randy Buffington.
The non-binding terms of the package were agreed with senior lender KfW IPEX-Bank, working capital provider Concord Resources Limited, largest shareholder Pala Investments, Mercuria Energy, and stream partner Triple Flag Precious Metals.
Breaking the package down, US$40 million of the equity package will be provided by Pala and Mercuria at US$20 million each; US$30 million of stream and royalty financing agreement with Triple Flag will see its existing net smelter returns increase from 0.7% to 2%; a US$15 million commitment comes from an extension of the existing credit facility with KfW; and at least US$8 million coming from deferring three interest payments under the KfW facility.
In order to secure the financing, the mining firm committed to certain conditions in its restart plan, including: changes to the underground mining contractor arrangements in order to improve performance of ramp-up activities, targeting to complete the second dike by Q3 2022 and the final dike by end of 2022, targeting the stoping in the higher grade East North mining zone by Q3 2022, and targeting to restart the mill by Q3 2022, as well.
In July 2022, the company’s reports indicated it is in default with certain financing and contractual agreements and is said to be in discussions with creditors for possible sourcing of additional funds, which this new package appears to resolve.
The restart plan, when executed, is expected to yield approximately 3,000 tons per day by Q3 2022 and then 5,000 tpd by Q4 2023.
Nevada Copper last traded at $0.36 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
