Nevada Copper Corp. said Dec. 22 that it entered into arrangements for a construction financing and recapitalization package totaling US$378 million, to be provided by Triple Flag Mining Finance Bermuda Ltd., Pala Investments Ltd., Red Kite Mine Finance, Concord Resources Ltd. and several institutional equity investors including JP Morgan Asset Management U.K.
The company's share price dropped by about 20% as a result of the announcement.
The package comprises a US$70 million precious metals stream from Triple Flag, an US$80 million senior secured loan from Red Kite, a US$53 million debt-to-equity conversion by Red Kite and Pala, a US$25 million working capital facility mandate with Concord, a US$90 million equity commitment from various equity investors including Pala and a US$60 million equity backstop from Pala that can be used by the company for subsequent equity offerings.
Closing remains subject to various correlating conditions.
According to Nevada Copper, the deals enable it to advance its Pumpkin Hollow copper project in Nevada toward initial production, targeted in 2019. The company aims to develop two mines at Pumpkin Hollow: a near-production, high-grade underground mine and a large-scale open pit with flexibility for staged development.
Nevada Copper will use the proceeds to resume construction of the underground project and begin extension drilling and optimization related to the open pit project in the first quarter of 2018.
The company also said it expects to be placed under the Toronto Stock Exchange's remedial delisting review as a result of its financial hardship application but added that it expects to meet the exchange's continued listing requirements upon completion of the US$90 million equity offering and the US$80 million loan agreement with Red Kite.