Nevada Copper files for bankruptcy projection in Nevada
Nevada Copper Corp. [NCU-TSX] has filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code in Nevada after failing to secure additional funding from its key stakeholders. As a result, the company said it is unable to continue carrying on business.
In conjunction with the Chapter 11 filings, the company has requested customary relief to support its employees and critical vendors during the bankruptcy process. As part of the relief, the company is asking the District of Nevada Bankruptcy Court for permission to continue to pay employee salaries and wages, and to continue other benefit programs regardless of whether amounts were owing prior to the commencement of the Chapter 11 case.
Meanwhile, the company said it has received a commitment for US$60 million debtor in possession (DIP) financing to provide liquidity through the restructuring period, of which the company is asking that US$20 million would be available on an interim basis. The company is seeking approval from the U.S. Bankruptcy Court for DIP financing.
The bankruptcy protection filing comes just months atter the company said it requires additional financing in order the complete the ramp-up of the underground mine at its Pumpkin Hollow copper operation in Yerington, Nevada.
As previously disclosed, Nevada Copper had fully drawn US$25 million of debt pursuant to a deferred funding agreement with its two largest shareholders, Pala Investments Ltd. and Mercuria Holdings (Singapore) Ptd Ltd. While Pala has continued to support the company it was under no obligation to do so, according to Nevada Copper, which has also been in discussions with third parties.
Nevada Copper is the owner of the Pumpkin Hollow project in Nevada, which hosts substantial reserves and resources, including copper, gold and silver. The asset includes the high-grade underground mine and processing facility and large-scale open pit pre-feasibility stage project.
Pumpkin Hollow is a high-grade skarn/iron oxide copper gold (IOCG) deposit located within a porphyry copper district within the Walker Lane mineral belt of western Nevada.
The company said several unforeseen setbacks impacted its progress on meeting operational targets.
Through the restructuring process, the company said it does not expect to continue operations, but does intend to preserve and protect its asset. Meanwhile, the company has announced the appointment of Tom Albanese as Chair of its Board of Directors and the resignation of Randy Buffington as President, CEO and director. Last week, the company received notice of the resignation of director Guillaume de Dardel, who was a nominee of Mercuria Holdings [Singapore] Pte Ltd.
Prior to the announcement, Nevada Copper’s share price had plunged to $0.03 after trading in a 52-week range of 22.5 cents and $0.01.