Cash-strapped Nevada Copper has received a nonbinding term sheet proposal from a third-party investor, which will result in a change of control of the company.
Together with the previously announced $93-million restart package, the proposed change of control transaction would be sufficient to complete the restart plan of the Pumpkin Hollow underground mine through to positive cashflow, the company reported on Wednesday.
In light of the ongoing consideration of the change of control proposal, main shareholder Pala Investment has said it will provide additional financing support to allow additional time for the evaluation and negotiation of the change of control proposal and the corresponding delay in the closing of the restart financing package.
Pala has offered to provide the company with additional financial support in the form of a $25-million backstop. This is on top of Pala’s $20-million equity investment under the restart financing package, increasing the liquidity available under the previously announced financing package from $93-million to $118-million.
From April 2022, Pala has provided an aggregate of $48.5-million of financing support to the company, including to bridge the closing of the restart financing package.
In a statement, Nevada Copper also provided an update on activities at Pumpkin Hollow.
The company said it had substantially completed the second and most critical dike crossing and that it was continuing lateral development beyond the dike feature in order to access the larger stopes on the higher-grade East North zone.
A tender for a new mining contractor for underground mine development has been issued, with several parties having expressed an interest. The contract will be awarded in December.