Struggling miner Nevada Copper on Monday announced non-binding terms with its lead lender, KfW IPEX-Bank, and top shareholder, Pala Investments, for a loan of up to $70 million.
The copper producer, which suspended mining activities at Pumpkin Hollow over the weekend, said lenders would commit $50 million and $20 million would be available for future drawdown on an uncommitted basis. .
Nevada Copper said it aims to execute binding agreements during the month of July.
“If implemented, the proposed financing package will provide access to significant additional cash for the company to maintain the assets of the Pumpkin Hollow underground copper mine and to pursue certain projects such as the completion of the crossing of the seawall and advancing feasibility study work on the open pit project, and to explore and advance discussions on other financing and strategic options,” the cash-strapped company said.
While negotiating the financial package, Nevada Copper would make further drawdowns under Pala’s previously disclosed $20 million promissory note to meet its immediate cash requirements.
The miner, however, warned that if further draws were not available, the financial package was not completed or satisfactory arrangements were not implemented with the sellers, he would not be able to proceed. its activities in the normal course of business and may have to take legal action. for the protection of creditors.
Nevada Copper has already received a notice of default from its mining contractor, Redpath, after failing to make payments that were due. Redpath has indicated that it intends to pursue its available remedies.
Despite the default, the company and Redpath reached an agreement on the suspension of mining work at the underground project and on limited work to be carried out in the future in order to protect the company’s assets.