Nevada Copper needs additional funding for Pumpkin Hollow
Toronto-listed Nevada Copper’s share price closed 12.50% lower on Tuesday, as the company said that it needed additional funding for the ramp-up of its Pumpkin Hollow underground project in the US.
The company explained that a change in mine plan to initially mine smaller stopes in the Upper East South zone would increase costs in the short term and that it, thus, would require additional funding over the next four month.
Production would transition to predominantly larger stopes over the first quarter of 2021, supporting sustained mining of larger stopes as previously planned, Nevada Copper said.
The company reported that it was in discussions with senior lender KfW-IPEX Bank and had received a term sheet from a third party for an additional credit line of $20-million to $30-million to fund its increased cash requirements.
The miner’s largest shareholder, Pala Investments, would continue to provide financial support until the end of the year, by which time the company expected to complete a financing.
“. . . in the absence of sufficient financing, the company may not be able to continue operations,” the copper producer stated.
In an operations update on Tuesday, Nevada Copper said that the estimated timing for completion of the ramp-up remained subject to revision based on the availability of funding and the impacts of the Covid-19 pandemic
“We are pleased that the Main Shaft steelwork is complete and that work is progressing on the materials handling system. In the meantime, we continue to hoist development ore via the East North Vent shaft and look forward to our continued ramp-up to 5 000 t/d. We are also pleased that our lateral development rates are on schedule with development ore grades continuing to increase to targeted levels. Mill ramp-up continues positively with extended periods of operation approaching nameplate throughput and recovery,” said CEO Mike Ciricillo.
The company's stock closed at C$0.07 a share on Tuesday.
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