Nevada Copper Corp (TSX:NCU, OTC:NEVDF) has provided an update on its operations and financing initiatives and activities at its Pumpkin Hollow copper mine located in Yerington, Nevada, for which it is seeking substantial mine financing.
During July 2022, Nevada Copper said its management has advanced underground mine restart plans, which focus on the acceleration of key capital items followed by the development of a significant stope ore inventory in advance of a mill restart and completion of production ramp-up.
The development of restart plans has allowed the company to advance financing discussions with its key stakeholders and the commencement of restart activities is contingent on the company obtaining long-term financing.
READ: Nevada Copper agrees non-binding terms for loan up to US$70M to maintain its underground mine
The company said it continues to work with its creditors and vendors to defer payments and maintain the operation in a temporary suspension status, with only limited operational activities being undertaken to protect the company's assets, to minimize cash burn until the closing of a restart funding package.
Nevada Copper said it is engaged in active and ongoing discussions with its key financing partners with respect to a substantial funding package for the restart and ramp-up of the underground mine - as an alternative to the smaller financing package referred to in the company's July 4, 2022 press release which is no longer being pursued in that form.
The company noted that it has expended the full amount of the previously disclosed US$20 million promissory note from Pala Investments Limited, the company's largest shareholder. Pala has indicated that it is prepared to provide additional financing of up to US$20 million through further promissory notes - US$4 million of which has already been advanced - while the company continues discussions with its financing partners.
The company said it will continue to require interim financing until a restart funding package is secured and closed. As previously disclosed, pending completion of a financing package, the company has not made payments due to certain creditors and vendors and is in default of its obligations under certain financing agreements and other contractual arrangements.
The company said there can be no assurance that it will obtain additional interim financing or that the longer-term restart funding package will be agreed or completed on terms satisfactory to the company and within the required timeframe, or at all. In the absence of securing such arrangements or alternative financing arrangements, the company will not be able to continue carrying on business in the ordinary course and may need to pursue proceedings for creditor protection. The company's creditors may also seek to commence enforcement action, including realizing on their security over the company's assets.
Nevada Copper is a copper producer and owner of the Pumpkin Hollow copper project. Located in Nevada, USA, Pumpkin Hollow 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 status.
Contact the author at jon.hopkins@proactiveinvestors.com