Nevada Copper Corp (TSX:NCU, OTC:NEVDF) has unveiled a proposed financing package, which would allow the company to maintain its Pumpkin Hollow underground mine.
The miner has agreed non-binding terms with its senior lender KfW IPEX-Bank (KfW) and its largest shareholder Pala for a loan of up to US$70 million via a new tranche extension to its existing senior credit facility with KfW. Pala would provide the funds with the potential participation of other lenders.
The firm said US$50 million of the total will be committed by the lenders (including the outstanding amount of the previously announced up to US$20 million promissory note provided by Pala), while US$20 million may be available for future draw down.
As reported previously, Nevada Copper was seeking additional funds to continue operations, including the ramp-up of the underground mine following the encounter of a weak rock structure in the main ramp to the East South Zone, which restricted access to the planned East South stoping zones.
READ: Nevada Copper continues talks on financing; updates on Pumpkin Hollow underground mine
Today, Nevada also told investors it was in ongoing discussions with KfW, Pala and other lenders with the aim of executing binding agreements during July this year.
"If implemented, the proposed financing package will provide access to significant further liquidity for the company to maintain the assets at the Pumpkin Hollow underground copper mine (the 'underground mine') and pursue certain projects such as completing the dike crossing and advancing open pit project feasibility study work, and to explore and advance discussions on further financing and strategic options," it added in the statement.
The proposed package is subject to a number of factors and the company said that while negotiating it, it intends to make further draws under its previously disclosed US$20 million promissory note from Pala in order to meet its "immediate cash needs".
The company added the caveat that there could be "no assurance" that the definitive binding agreements for the proposed financing package will be entered into, relevant consents be obtained, that the transactions be completed, or that further draws under the Pala promissory note will be available.
Nevada Copper owns the Pumpkin Hollow copper project in Nevada, which has substantial reserves and resources including copper, gold and silver. Its two fully-permitted projects include the high-grade underground mine and processing facility, which is now in the production stage, and a large-scale open-pit project, which is advancing towards feasibility.
Contact the writer at giles@proactiveinvestors.com