Nevada Copper (TSX: NCU) (OTC: NEVDF) (FSE: ZYTA) (“Nevada
Copper” or the “Company”) provides an update on operations
at its Pumpkin Hollow underground copper mine located in Yerington,
Nevada (the “
Underground Mine”) and on its
financial liquidity.
Response to Restricted Stope Access and
Dike Progress
As previously disclosed on June 6, 2022, an
unidentified weak rock structure being encountered in the main ramp
to the East South Zone restricted access to the Company’s planned
East South stoping zones. In response to this event, the Company
has taken steps to curtail operating activities while developing
plans to address this issue.
The Company has continued development of its
priority heading through the dike structure and into the East North
mining zone, which is expected to have significantly higher copper
grades and better geotechnical conditions compared with the East
South Zone. Although almost complete, additional work is required
to finish the dike crossing.
Due to the liquidity issues referred to below,
the Company may not be able to undertake further work on the ramp
to the East South Zone or the dike crossing.
Liquidity
As previously disclosed, the Company has been
seeking to raise additional funds to continue its operations,
including the ramp-up of the Underground Mine. The Company is in
ongoing discussions with third parties and the Company’s financing
partners, including its senior lender, KfW IPEX-Bank, and Pala
Investments Limited (“Pala”), the Company’s
largest shareholder, about additional funding and other financial
accommodations. The Company has drawn US$11.5 million under the
previously disclosed US$20 million promissory note from Pala.
Further draws under the promissory note are subject to agreed use
of proceeds and satisfactory arrangements being reached with
certain creditors and vendors (which have not yet been reached).
There can be no assurance that further draws under the promissory
note will be available.
While these discussions are ongoing, the Company
is taking measures to significantly reduce Underground Mine site
and other operational expenditures, including the suspension of
most mining activities. The Company has not made payments due to
certain creditors and vendors, including its mining contractor and
working capital provider, and is in discussions with them regarding
timing of payments and services and supplies. Consequently, the
Company is in default of its obligations under certain financing
and contractual arrangements.
While the Company is continuing discussions with
its financing partners and vendors to secure further funding and
other satisfactory arrangements, there is no assurance that such
funding and other arrangements will be obtained within the required
timeframe and in a sufficient amount, or at all. In the absence of
securing such 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.
Qualified Person
The technical information and data in this news
release has been reviewed by Steven Newman, Registered Member –
SME, Vice President, Technical Services for Nevada Copper, who is a
non-independent Qualified Person 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.
Randy BuffingtonPresident &
CEO
For additional information, please see the
Company’s website at www.nevadacopper.com, or contact:
Tracey Thom | Vice President,
IR and Community Relationstthom@nevadacopper.com+1 775 391 9029
Cautionary Language on Forward Looking
StatementsThis news release contains “forward-looking
information” and “forward-looking statements” 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 information and
forward-looking statements specifically include, but are not
limited to, statements that relate to financing requirements,
discussions with financing partners and vendors, and creditor
protection proceedings.
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: requirements for additional capital
and no assurance can be given regarding the availability thereof;
the outcome of discussions with creditors and vendors; potential
creditor protection proceedings; the ability of the Company to
complete the ramp-up of the Underground Mine within the expected
cost estimates and timeframe; the impact of COVID-19 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; 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; labour 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; dependence on
management information systems and cyber security risks; 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, 2021 and the
quarter ended March 31, 2022 and in the section entitled “Risk
Factors” in the Company’s Annual Information Form dated March 31,
2022. The forward-looking statements and information contained in
this press release are based upon assumptions management believes
to be reasonable, including, without limitation: no adverse
developments in respect of the property or operations at the
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 COVID-19 going
forward; the Company will be able to obtain sufficient additional
funding to complete the ramp-up, 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. The Company disclaims any intent
or obligation to update forward-looking statements or information
except as required by law. 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 information and statements, there may be other
factors that could cause actions, events or results not to be as
anticipated, estimated or intended. Specific reference is made to
“Risk Factors” in the Company’s Management’s Discussion and
Analysis in respect of the year ended December 31, 2021 and the
quarter ended March 31, 2022 and “Risk Factors” in the Company’s
Annual Information Form dated March 31, 2022, for a discussion of
factors that may affect forward-looking statements and information.
Should one or more of these risks or uncertainties materialize,
should other risks or uncertainties materialize or should
underlying assumptions prove incorrect, actual results and events
may vary materially from those described in forward-looking
statements and information. For more information on the Company and
the risks and challenges of its business, investors should review
the Company’s filings that are available at www.sedar.com.
The Company 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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