Nevada Copper (TSX: NCU; US-OTC: NEVDF) “significantly scaled down operations” at its Pumpkin Hollow mine after it failed to secure funding and two board members from its leading investor resigned.
The miner’s shares plunged to 2¢ apiece in Toronto on Thursday, down 90% over the past year, for a market capitalization of $28.6 million.
“The company’s cash position has become substantially depleted,” Nevada Copper said on Thursday. “In the absence of securing sufficient funding on an urgent basis, the company will not be able to continue carrying on business and may have no alternative but to seek creditor protection.”
Directors Evgenij Iorich and Stephen Gill, who were nominees of Switzerland-based Pala Investments, stepped down on Wednesday, the miner said.
Pala was 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 on Thursday.
2023 restart
Earlier this year, the company revealed that additional funding was required to meet challenges at Pumkin Hollow since it restarted late last year. The mine faced underground flooding, an 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,” CEO Randy Buffington said in a February 8 release. “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.”
Nevada Copper said it generated lower sales through the ramp-up process than anticipated, which hurt its financing requirements. The company had fully drawn US$25 million of debt under a deferred funding agreement with its two largest shareholders, Pala and Mercuria Holdings.
Be the first to comment on "Nevada Copper plunges as financing stalls"