Nevada Copper Corp (TSX:NCU, OTC:NEVDF) said it has made positive progress with the Toronto Stock Exchange (TSX) to advance its previously-announced financial hardship application related to the restart of the Pumpkin Hollow copper project, while its largest shareholder, Pala Investments Ltd., has offered additional financial support.
The application with TSX is with respect to the company’s restart financing package and Pala’s support involves a $25 million backstop commitment to supplement the restart financing package, increasing the liquidity available to the company under the restart financing package from up to $93 million to up to $118 million, which is expected to provide sufficient financing of the restart plan through to positive cash flow, the company said in an update.
The company has also been discussing a non-binding term sheet proposal received from a third-party strategic investor for a separate investment that would be implemented following the restart financing package. Such a transaction would provide additional financing and result in a change of control of the company, Nevada Copper added.
READ: Nevada Copper updates on restart activities at Pumpkin Hollow and proposed financing package
Nevada Copper said it is in discussions with its various financing parties to complete the restart financing package as soon as possible.
“This will allow the company additional time to evaluate, negotiate and, if appropriate, finalize the change of control proposal together with the implementation of the restart financing package,” it said, adding that “if agreement can be reached on the change of control proposal, such a transaction together with the restart financing package is expected to provide the company with new financing resources sufficient to complete the restart plan through to positive cash flow.”
Operations update
The company said it has continued to make significant progress with its previously-announced restart plan, including:
- The company has substantially completed the second and most critical dike crossing and is continuing lateral development beyond the dike feature in order to access the larger stopes in the higher-grade East North zone.
- The tender has been issued for a new mining contractor for underground mine development. Confirmations of interest have been received from a number of highly qualified contractors that have reviewed the tender documentation and plan to visit the site with a bid walk to take place next week. The contract is expected to be awarded in December.
- The company has completed a detailed project execution plan (PEP) to accompany the third party, independently reviewed mine plan which was completed in Q3 2022. The PEP details how the phased approach to restart will be achieved, the recruitment plan, how capital projects will be managed and how key risks will be mitigated, including key learnings from the previous operations. Both the mine plan and PEP have been reviewed in detail and approved by all of the company's financing parties in their due diligence processes.
Nevada Copper reminded shareholders that the terms of the restart financing package are currently non-binding and subject to various elements, including regulatory requirements and approval from TSX.
Nevada Copper is a copper producer and owner of the Pumpkin Hollow copper project which has substantial reserves and resources, including copper, gold and silver.
Contact the author at jon.hopkins@proactiveinvestors.com