Nevada Copper says more funding needed for ramp-up

Pumpkin Hollow process plant and ENVS. Image from Nevada Copper Corp.

Nevada Copper (TSX: NCU) will need additional funding over the next four months to complete its ramp-up of operations at the Pumpkin Hollow underground mine, the company said on Tuesday.

Due to geotechnical changes arising from definition drilling in the Upper East South zone, Nevada Copper has elected to modify its mine plan, which now requires the company to reduce the size of certain early stopes in a localized area where initial ramp-up ore is planned. This change is expected to further de-risk the project, but will increase costs in the short term.

The copper miner said it is already in discussions with KfW-IPEX Bank, its senior lender, and has received a term sheet from a third party for an additional credit line of $20-$30 million to fund its increased cash requirements. Discussions are also ongoing with other potential funding sources, it added.

Pala Investments confirmed it will continue to provide financial support for the project until the end of the year

Nevada Copper’s largest shareholder, Pala Investments Limited, has confirmed it will continue to provide financial support for the project until the end of the year, by which time the company expects to complete a financing.

Meanwhile, the underground lateral development at Pumpkin Hollow continues at its scheduled rate, with ore grades encountered in ongoing development reconciling well to resource model grades, and hoisted development ore grades improving as expected with stope development, the company said.

Steelwork in the main shaft was completed during the month of October, with work underway to complete the remaining loading pocket.

By the middle of November, Nevada Copper said it plans to use the main shaft to transfer materials, supplies and people, freeing the east north vent shaft to be used exclusively for development ore and waste movement, with a resultant expected increase in ore hoisting rates.

Staged commissioning of the main shaft material handling system has also started. The company is testing the communication system and interaction of these sections to ensure ramp-up can be accelerated once the underground conveyor is installed later in the quarter.

Processing plant performance continued to improve with recoveries increasing 10% in October from September. Concentrate production increased 140% over the same period.

Shares of Nevada Copper plunged 18.7% by midday Tuesday following the latest operational update. The company has a market capitalization of C$96.7 million.