Nevada Copper (TSX: NCU) said on Thursday that it has “significantly scaled down operations” at its Pumpkin Hollow mine after failing to secure necessary funding and fears that the business may not continue if the situation does not improve.
Earlier this year, the company revealed that additional funding was required to meet the ongoing challenges at its Nevada copper mine since restarting operations in the fourth quarter of 2023. Issues encountered included a build-up of water underground, incomplete ore handling system and unexpected bottlenecks that caused repeated shutdowns of the processing plant.
“We took critical steps and refocused resources to mitigate and address these issues. The hoisting and ore handling system has returned to full capacity and mill operations continue to incrementally improve with over two months of mill feed stockpiled on surface,” CEO Randy Buffington said in the February 8 press release.
Due to these challenges, Nevada Copper said it generated lower sales through the ramp-up process than previously anticipated, which also negatively impacted its financing requirements. As previously disclosed, the company has fully drawn $25 million of debt under a deferred funding agreement with its two largest shareholders, Pala Investments and Mercuria Holdings.
Pala has since been providing sole funding for the company’s operating needs in the form of debt but is not obligated to do so, and has indicated that it may not be prepared to provide further funding, Nevada Copper said.
As a result, the Vancouver-based miner’s cash position has become “substantially depleted”, leading to a significant scale down of operations at the Pumpkin Hollow mine.
In the absence of securing sufficient funding on an urgent basis, the company will not be able to continue carrying on its business and may have to seek creditor protection, Nevada Copper stated in Thursday’s release.
Moreover, the company has received notices of resignation from directors Evgenij Iorich and Stephen Gill, who were both nominees of Pala.
Nevada Copper’s shares plunged to a new low of C$0.10 and is down over 92% over the past year. Its market capitalization now stands at C$21.4 million ($15.6m).
Source: MINING.COM – Read More
