Mr. Matthew Gili reports
NEVADA COPPER RELEASES Q3 FINANCIALS AND MD&A; UNDERGROUND PROJECT REMAINS ON SCHEDULE TO ENTER PRODUCTION IN Q4, 2019; ADDITIONAL CREDIT FACILITY ANNOUNCED
Nevada Copper Corp. has SEDAR filed its quarterly financial statements and management's discussion and analysis for the three and nine months ended Sept. 30, 2019. Additionally, the company confirms that its Pumpkin Hollow underground copper project is expected to enter production in Q4 2019.
Construction of the processing plant is materially complete and on schedule. Approximately 95,000 tons of development ore has been mined and stockpiled on the run-of-mine pad ready to feed the processing plant. The company's overall estimated construction costs to complete the underground project continue to be within the range announced in the company's MD&A for Q2 2019.
Construction progress update
- Underground project development proceeding well:
Total lateral development to date has now advanced 8,900 feet on both levels.
- Three thousand central ramp has reached the 3,000 level.
- Two thousand eight hundred fifty and 2,770 level stope development access headings continue to make good progress in preparation for future stope operations.
Second round of definition drilling is progressing well and continues to confirm the resource model.
Intermediate maintenance shops have been established on both the 2,850 and 2,770 levels.
Paste borehole drilling is completed and the paste/cement reticulation line is installed.
East-north vent shaft is within 250 feet of intersecting the Alimak raise.
Existing ore stockpile will continue to be added to and will supplement mine feed during ramp-up period, notwithstanding the later than originally anticipated completion of the east-north vent shaft.
- Surface infrastructure and processing equipment at the underground project advancing to plan:
Grinding area is mechanically complete.
Power has been introduced into grinding and flotation.
Tailings radial stacker and coarse ore radical stacker are complete.
Concentrate and tailings thickeners completed.
Filter press mechanical works have been completed and all plates loaded in the frames.
Water and air pipework completed.
Approximately 95,000 tons of development ore have now been stockpiled on surface.
- In order to provide the company with additional flexibility, the company has entered into a binding term sheet for a $30-million credit facility:
Provides additional financial resources to navigate the current depressed copper price environment, to address the impact of the delay in east-north vent shaft, and to address normal technical risks associated with ramp-up.
Simple, low-cost line of liquidity with no equity dilution.
Replaces the prior equity backstop facility.
Matt Gili, chief executive officer of Nevada Copper, stated: "We are now entering the final stages before the commencement of production at Pumpkin Hollow
. Our team and contractors are continuing to deliver on schedule as we prepare for production this quarter. The addition of a credit facility, non-dilutive to shareholders, provides access to additional liquidity as we ramp up copper production during the first half of 2020."
Further details of the credit facility
The credit facility is being arranged by Pala Investments Ltd., the company's largest shareholder. The negotiation of the term sheet has been supervised on behalf of the company by the independent members of the company's board of directors.
The credit facility would be available for an initial draw of $15-million, and three additional draws of $5-million each at the sole option of the company, subject to the satisfaction of certain conditions, including for the additional draws Pala having syndicated the facility. The credit facility would be a direct obligation of the company and would not be guaranteed or secured by any of its subsidiaries. It would have a maturity date of Sept. 30, 2021. The credit facility bears interest at 9 per cent for the first 12 months of the term and 10 per cent thereafter, subject to certain fees including a 3-per-cent arrangement fee. There are no common shares, warrants or other convertible securities issuable in connection with the credit facility. The credit facility replaces in its entirety Pala's $11.4-million commitment under the equity standby facility that it previously provided to the company. Further details are available in the Q3 financial statements.
The information and data in this news release were reviewed by David Swisher, PE, senior vice-president of operations for Nevada Copper, who is a non-independent qualified person within the meaning of National Instrument 43-101.
About Nevada Copper Corp.
Nevada Copper's underground project is in construction with a view to commencement of copper production in Q4 2019. Located in Nevada, United States, Pumpkin Hollow has substantial reserves and resources including copper, gold and silver. Its two fully permitted projects include the high-grade underground project (under construction) and a large-scale open-pit project.
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