Nevada Copper starts sales process amid bankruptcy proceedings
A US court has granted the miner provisional approval to borrow $20m out of a $60m-loan to keep paying salaries and cover other needs.
Canada’s Nevada Copper has started a sales process as a part of a restructuring announced this week, which included filing for bankruptcy and halting its Pumpkin Hollow copper mine in Nevada, US.
Nevada Copper noted a Nevada court had granted it a provisional approval for its debtor-in-possession financing. This allows the company to borrow $20 million out of the previously announced $60 million loan facilitated by US hedge fund manager Elliott Investment.
The Vancouver-based miner said the emergency funding will be used to support care and maintenance at Pumpkin Hollow, as well as other financial needs during the Chapter 11 process. The miner had said earlier in the year that it would need about $10 million to keep Pumpkin Hollow idled
Nevada Copper also said it would request final approval for the remaining $40 million from Elliot to ensure liquidity for the remainder of the restructuring period during which it will continue paying employees’ wages and benefits.
Elliott owns two-thirds of Triple Flag Precious Metals Corp. (TSX, NYSE: TFPM), a streaming company that invested in Nevada Copper’s operations.
Before last week’s bankruptcy filing, Nevada Copper had garnered interest from two unnamed potential buyers, but was unable to finalize a deal with either, it said.
The company had said earlier this year it required additional funding to meet ongoing challenges at Pumpkin Hollow, where it restarted operations in the fourth quarter of 2023. Issues encountered included a build-up of water underground, an incomplete ore handling system and unexpected bottlenecks that caused repeated shutdowns of the processing plant.
The operational setbacks caused costs to spiral and its key backers, including Pala Investments Ltd. and Mercuria Energy Group Ltd., hesitated to sink more money into the operation.
Nevada Copper reported revenue of just $3.6 million for the quarter ended March 31, 2024, while climbed to $18.2 million.
The company is undergoing a delisting review by the Toronto Stock Exchange, and its shares are currently halted from trading.