In an effort to raise additional funds to continue its operations, Nevada Copper (TSX: NCU) has agreed terms with its senior lender KfW IPEX-Bank and its largest shareholder Pala Investments for a loan of up to $70 million by way of a new tranche extension to the existing senior credit facility with KfW.
The funding would be provided by Pala, with the potential participation of other lenders. Of the total amount, $50 million will be committed to be advanced by the lenders (including the outstanding amount of the previously announced up to $20 million promissory note provided by Pala). An additional $20 million may be available for future draw by the company on an uncommitted basis.
Nevada Copper is in ongoing discussions with KfW, Pala and other lenders with the aim of executing binding agreements during the month of July 2022. While these negotiations are going on, the company plans to make further draws under the $20 million promissory note from Pala in order to meet its immediate cash needs.
If implemented, the proposed financing package will provide access to “significant further liquidity” for the company to maintain the assets at the Pumpkin Hollow underground copper mine, it says.
Pumpkin Hollow was the first copper mine to come online in the US over the past decade. The underground mine is capable of producing 50 million lb. of copper annually during a 13.5-year mine life, but most mining activities were suspended at the beginning of the month.
Furthermore, the financing would allow Nevada Copper to pursue certain projects such as completing the dike crossing to gain access to the East North mining zone, the largest mining area within the underground mine.
The company would also be able to work on the Pumpkin Hollow open pit project, which it is advancing towards feasibility status, and to explore further financing and strategic options.