Nevada Copper Provides Operations and Financing Updates
August 31 2021 - 10:25PM
Nevada Copper Corp. (TSX: NCU) (OTC: NEVDF)
(“
Nevada Copper” or the
“
Company”) today provided an update regarding
operations at the underground mine at its Pumpkin Hollow project
(the “Underground Mine”), as well as an update on financing
matters. All amounts below are stated in US dollars.
Operations Update
- Lateral
Development: Development and penetration through the water
bearing dike has now been completed on the first crossing. Lateral
development beyond this crossing is now into solid ground at a pace
consistent with mine plan rates focused on establishing production
from the East-North deposit. In addition, with steel support beams
recently installed, a second crossing is expected in the coming
weeks, further enhancing development rates.
-
Stoping: The Company has mined the second stope in
the Alphabet Zone at a Cu grade of 1.45% with backfilling scheduled
to start in the coming week.
- Surface Ventilation Fans: Delivery of the
surface fans remains on schedule with installation and
commissioning expected to be completed in Q4 2021.
“We are pleased to have completed our first
crossing of the water dike enabling our development rates to
increase in line with our mine plan expectations,” stated Mike
Brown, Interim Chief Executive Officer of Nevada Copper. “We look
forward to continued production rate increases in Q3 and Q4 of this
year.”
Financing Update
- KfW Credit Facility Amendment Discussions: On
August 31, 2021, the Company received an extension of the waiver
from KfW IPEX-Bank (“KfW”), the Company’s senior project lender, to
September 30, 2021 to complete the project completion test (the
“Project Longstop Date”) under the amended and restated credit
agreement (“Amended KfW Facility”). The Company is in discussions
with KfW regarding a longer-term extension of the Project Longstop
Date into 2023; deferral of debt servicing by up to twenty-four
months; and the deferral of certain financial covenants under the
Amended KfW Facility to further support the ramp-up of the
Underground Mine. The Company expects to have the proposed
extension and amendments finalized in the next month. However,
there can be no assurance that such extension and amendments will
be finalized by such times or at all. Failure to finalize the
extension would result in the Company being in default under the
Amended KfW Facility.
- Additional $13M of liquidity: The existing
Promissory Note provided by Pala Investments Limited, the Company’s
largest shareholder (“2021 Promissory Note”) has been amended
(subject to regulatory approval) to allow total borrowings of up to
$55 million, providing an additional $13 million of liquidity to
the Company. Further draws by the Company are subject to agreed use
of proceeds. The 2021 Promissory Note has a maturity date of June
30, 2022, and bears interest at 8% per annum on amounts drawn.
Pursuant to the amendment, the 2021 Promissory Note now provides
for an arrangement fee of 6% on the full commitment amount of $55
million, which will be capitalized. The proceeds will be used to
fund the development and ramp-up of the Underground Mine and
related working capital needs. The amendment was reviewed and
approved by a committee of independent directors of the
Company.
Qualified Persons
The technical information and data in this news
release was reviewed by Greg French, C.P.G., and Norm Bisson,
P.Eng., for Nevada Copper, who are non-independent Qualified
Persons within the meaning of NI 43-101.
About Nevada Copper
Nevada Copper (TSX: NCU) 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.
NEVADA COPPER
CORP.www.nevadacopper.comMike Brown, Interim
President and CEO
For further information contact:Rich Matthews,
Investor RelationsIntegrous Communicationsrmatthews@integcom.us+1
604 757 7179
Cautionary Language
This news release includes certain statements
and information that constitute forward-looking information within
the meaning of applicable Canadian securities laws. All statements
in this news release, other than statements of historical facts are
forward-looking statements. Such forward-looking statements and
forward-looking information specifically include, but are not
limited to, statements that relate to mine development plans,
production and ramp-up plans, equipment installation, requested
amendments to the Amended KfW Credit Facility, and regulatory
approval of the 2021 Promissory Note.
Forward-looking statements and information
include statements regarding the expectations and beliefs of
management. Often, but not always, forward-looking statements and
forward-looking information can be identified by the use of words
such as “plans”, “expects”, “potential”, “is expected”,
“anticipated”, “is targeted”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates”, or “believes” or the
negatives thereof or variations of such words and phrases or
statements that certain actions, events or results “may”, “could”,
“would”, “might” or “will” be taken, occur or be achieved.
Forward-looking statements or information should not be read as
guarantees of future performance and results. They are subject to
known and unknown risks, uncertainties and other factors which may
cause the actual results and events to be materially different from
any future results, performance or achievements expressed or
implied by such forward-looking statements or information.
Such risks and uncertainties include, without
limitation, those relating to: the ability of the Company to
complete the ramp-up of the Underground Mine within the expected
cost estimates and timeframe; requirements for additional capital
and no assurance can be given regarding the availability thereof;
the impact of the COVID-19 pandemic on the business and operations
of the Company; the state of financial markets; history of losses;
dilution; adverse events relating to milling operations,
construction, development and ramp-up, including the ability of the
Company to address underground development and process plant
issues; failure to obtain extensions under and amendments to the
Amended KfW Facility; ground conditions; cost overruns relating to
development, construction and ramp-up of the Underground Mine; loss
of material properties; interest rates increase; global economy;
limited history of production; future metals price fluctuations;
speculative nature of exploration activities; periodic
interruptions to exploration, development and mining activities;
environmental hazards and liability; industrial accidents; failure
of processing and mining equipment to perform as expected; labor
disputes; supply problems; uncertainty of production and cost
estimates; the interpretation of drill results and the estimation
of mineral resources and reserves; changes in project parameters as
plans continue to be refined; possible variations in ore reserves,
grade of mineralization or recovery rates from management’s
expectations and the difference may be material; legal and
regulatory proceedings and community actions; accidents; title
matters; regulatory approvals and restrictions; increased costs and
physical risks relating to climate change, including extreme
weather events, and new or revised regulations relating to climate
change; permitting and licensing; volatility of the market price of
the Company’s securities; insurance; competition; hedging
activities; currency fluctuations; loss of key employees; other
risks of the mining industry as well as those risks discussed in
the Company’s Management’s Discussion and Analysis in respect of
the year ended December 31, 2020 and in the section entitled “Risk
Factors” in the Company’s Annual Information Form dated March 18,
2021. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in
forward-looking statements and information. The forward-looking
statements and information contained herein are based upon
assumptions management believes to be reasonable, including,
without limitation: no adverse development in respect of the
property at the Pumpkin Hollow project; no material changes to
applicable laws; the ramp-up of operations at the Underground Mine
in accordance with management’s plans and expectations; no
worsening of the current COVID-19 related work restrictions;
reduced impacts of the COVID-19 pandemic in the medium-term and
long-term; no material adverse change to the price of copper from
current levels; and the absence of any other factors that could
cause actions, events or results to differ from those anticipated,
estimated or intended. The forward-looking information and
statements are stated as of the date hereof. Nevada Copper
disclaims any intent or obligation to update forward-looking
statements or information except as required by law. Readers are
referred to the additional information regarding Nevada Copper’s
business contained in Nevada Copper’s reports filed with the
securities regulatory authorities in Canada. Although the Company
has attempted to identify important factors that could cause actual
actions, events, or results to differ materially from those
described in forward-looking statements, there may be other factors
that could cause actions, events or results not to be as
anticipated, estimated or intended. For more information on Nevada
Copper and the risks and challenges of its business, investors
should review Nevada Copper’s filings that are available at
www.sedar.com.
Nevada Copper provides no assurance that
forward-looking statements and information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements or
information. Accordingly, readers should not place undue reliance
on forward-looking statements or information.
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