Nevada Copper rallies on $38 million financing news

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Nevada Copper Corp. [NCU-TSX], which recently restarted its Pumpkin Hollow copper-gold mine in Nevada, said Friday January 29 that it has raised $38 million from a bought deal offering of 230 million units priced at 16.5 cents each. That included 30 million units that were issued to cover over-allotment options.

Each unit consists of one common share of the company and one-half of a common share purchase warrant. Each warrant is exercisable for one common share at $0.22 per warrant share until July 29, 2022.

Concurrently, the company completed a previously announced private placement of 79.6 million units to Pala Investments Ltd. the company’s largest shareholder. As previously announced, Pala has pledged to provide a new credit facility to the company, providing US$15 million to be drawn down.

On Friday, Nevada Copper shares rose 6.25%, or $0.01, to $0.17 on volume of almost 1.6 million. The shares are currently trading in a 52-week range of 34 cents and $0.06.

Nevada Copper recently restarted the milling operations at its Pumpkin Hollow underground project following a temporary suspension of copper production due to the impact of the COVID-19 pandemic.

The plant restart and ramp up benefits from the processing plant’s initial consistent performance in Q1 2020, Nevada Copper said in a press release. The company said there are approximately 160,000 tons of stockpiled material at surface available for immediate processing. The stockpiled ore will be supplemented with additional development ore and subsequent stope ore hoisted via the East North Ventilation Shaft (ENVS).

Production at Pumpkin Hollow’s processing plant began on December 16, 2019, utilizing development ore stockpiled during the underground mine construction.

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 project hosts an underground mine as well as a permitted open pit development project located four kilometres west of the underground mine.

Nevada Copper was expected to produce 13 million lbs copper in the second half of 2020, ramping up to 50 million lbs in 2021 and 64 million lbs in 2022. That compares to an average of 50 million lbs over a 14-year mine life. During the first five years of production, the all-in-sustaining cost is expected to be US$1.86/lb. The life of mine all-in-sustaining cost is expected to be US$1.96/lb.

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