Home » Nevada Copper Faces Potential Shutdown Over Financial Struggles

Nevada Copper Faces Potential Shutdown Over Financial Struggles

Immediate Funding Crucial to Continue Operations, Nevada Company Warns

by Ikeoluwa Ogungbangbe

Nevada Copper Corp. (TSX: NCU) has significantly reduced operations at its Pumpkin Hollow mine due to severe financial constraints, the company disclosed on Thursday. The firm urgently requires additional capital to sustain operations and is at risk of ceasing business if financial conditions fail to improve.

Earlier in the year, the company disclosed the pressing need for further funding to tackle ongoing operational challenges at its Nevada-based mine, which had resumed operations in the last quarter of 2023. Among the issues were the accumulation of water in the mine, an incomplete ore handling system, and unexpected bottlenecks that frequently stopped the processing plant’s operations.

Randy Buffington, CEO of Nevada Copper, detailed the measures taken to address these setbacks in a press release dated February 8. “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 the surface,” he stated.

However, these operational challenges have led to lower-than-expected sales during the ramp-up phase, further worsening the company’s financial woes. As a result, Nevada Copper revealed it had exhausted the $25 million in debt available under a deferred funding agreement with its two largest shareholders, Pala Investments and Mercuria Holdings.

Pala Investments has been the sole provider of operational funding in the form of debt. However, it is under no obligation to continue this support and has indicated a potential halt in further funding. This situation has led to a significantly depleted cash position for Nevada Copper, forcing a major scale-down in operations at the Pumpkin Hollow site.

Should the company fail to secure the necessary funding promptly, it faces the severe possibility of having to halt its business operations entirely and potentially seek creditor protection, according to the latest release from Nevada Copper. Adding to the company’s troubles, Nevada Copper also announced the resignation of directors Evgenij Iorich and Stephen Gill, both of whom were nominees from Pala Investments, indicating a shake-up in its board amidst the ongoing crisis.

The financial struggles have heavily impacted Nevada Copper’s stock, which declined to a new low of C$0.10 on the TSX on Thursday, marking a decline of over 92% over the past year. The company’s market capitalization has dwindled to C$21.4 million ($15.6 million), reflecting investors’ growing concerns about its viability.

You may also like

Leave a Comment

The African Miner is the vanguard of the mining industry, delivering world-class insight and news.

Latest Stories

© 2024 The African Miner. All Rights Reserved.