Nevada Copper Corp. (TSX: NCU) (“
Nevada
Copper” or the “
Company’’), further to
its press releases on March 27, 2020 and March 30, 2020, is
providing an update in respect of the balance sheet strengthening
package announced on March 27, 2020 (collectively, the
“
Refinancing Transactions”). Additional
information is set out below with respect to the convertible loan
facility entered into with Pala Investments Limited
(“
Pala”) on March 27, 2020 (the
“
Convertible Loan”). The Company expects
conditional listing approval from the Toronto Stock Exchange (the
“
TSX”) in respect of the share issuances to Pala
described below and to permit the conversion feature in respect of
the Convertible Loan to be granted on or about April 6, 2020.
Convertible Loan
The conversion price of the Convertible Loan has
now been fixed at C$0.1575 (the “Conversion
Price”). Pala may, at any time, and from time to time,
convert all or a portion of the Convertible Loan, including any
accrued interest thereon, into common shares of the Company
(“Common Shares”) at the Conversion Price. As
noted in the prior press releases, the Convertible Loan bears
interest at the rate of 14% per annum, quarterly in arrears. The
Company has the option to pay such interest in cash if permitted by
the Company’s senior credit facilities. In the event the Company
elects not to pay such interest in cash, Pala has the option to
either: (i) receive the amount of such interest payment through the
issuance of Common Shares based on the market price (as such term
is defined in the policies of the TSX) of the Common Shares at the
time of such interest payment; or (ii) add the amount of such
interest payment to the then outstanding principal amount of the
Convertible Loan (which shall thereafter accrue interest at the
interest rate under the Convertible Loan), in which case such
interest will either be repaid on maturity of the Convertible Loan
or converted into Common Shares at the Conversion Price. The
Convertible Loan is also repayable subject to a make whole amount,
whereby Pala will receive the balance of all remaining interest
amounts to the end of the full term of the Convertible Loan, upon
certain change of control events.
Potential Maximum Dilution in respect of the
Refinancing Transactions
Prior to giving effect to the Refinancing
Transactions, Pala currently owns 274,379,447 Common Shares being
approximately 36.01% of the issued and outstanding Common Shares.
Assuming the issuance of the 31,400,000 Common Shares in respect of
fees relating to the repayment of the $30,000,000 unsecured credit
facility entered into with Pala on November 29, 2019, as amended,
the issuance of 7,500,000 Common Shares in respect of the fee
payable in respect of the backstop agreement entered into on March
27, 2020 (the “Backstop”) among the Company, Pala
and Triple Flag Mining Finance Bermuda Ltd. and the issuance of the
18,900,000 Common Shares relating to the fees payable to Pala in
connection with the provision by Pala of guarantees of certain
surety bonds provided to third party contractors to support the
ramp-up process relating to the Pumpkin Hollow Underground Mine,
the number of Common Shares that may be issued as a result of the
Refinancing Transactions to Pala and in total is set out below
(including the Common Shares issuable upon the due exercise of the
15,000,000 Common Share purchase warrants issued to Triple Flag
Precious Metals Corp. and assuming exercise in full of the Backstop
at the Common Share prices set forth below and exercise of the
Convertible Loan at the Conversion Price and assuming all interest
under the Convertible Loan is capitalized and converted at maturity
at the Conversion Price, in each case based on the exchange rates
noted below):
|
|
Total Number of Common Shares issued to Pala (In
Millions) |
% of Common Shares owned by Pala relative to Common Shares
currently outstanding |
% of Common Shares owned by Pala relative to Common Shares
outstanding after Refinancing Transactions |
Total Number of Common Shares issued pursuant to the
Refinancing Transactions (In Millions) |
% of Common Shares issued pursuant to the Refinancing
Transactions relative to Common Shares currently
outstanding |
C$0.10 / Common Share Backstop / C$0.1575 Conversion
Price |
$1=C$0.68 |
879.8 |
115.5% |
69.7% |
894.8 |
117.4% |
$1=C$0.73 |
819.5 |
107.6% |
68.5% |
834.5 |
109.5% |
$1=C$0.76 |
787.1 |
103.3% |
67.9% |
802.1 |
105.3% |
C$0.20 / Common Share Backstop / C$0.1575 Conversion
Price |
$1=C$0.68 |
732.7 |
96.2% |
66.7% |
747.7 |
98.1% |
$1=C$0.73 |
682.5 |
89.6% |
65.6% |
697.5 |
91.5% |
$1=C$0.76 |
655.6 |
86.0% |
64.9% |
670.6 |
88.0% |
Note: (1) If the Canadian dollar weakens below
$1.00 = C$0.68 then the number of Common Shares issuable to Pala
will proportionately increase.
The ability of Pala to convert any accrued
and/or capitalized interest under the Convertible Loan at the
Conversion Price would typically require shareholder approval under
the policies of the TSX as the Conversion Price may be at a price
that is outside TSX allowable pricing rules at the time such
accrued and/or capitalized interest becomes due, however the
Company expects to be exempt from such shareholder approval
requirement pursuant to the “financial hardship” exemption that it
has applied for.
About Nevada Copper
Nevada Copper (TSX: NCU) is a copper producer
and owner of the Pumpkin Hollow copper project. Located in Nevada,
USA, Pumpkin Hollow has substantial reserves and resources
including copper, gold and silver. Its two fully permitted projects
include the high-grade underground mine and processing facility,
which is now in production, and a large-scale open pit project,
which is advancing towards feasibility status.
Additional Information
For further information please visit the Nevada
Copper corporate website (www.nevadacopper.com).
NEVADA COPPER
CORP.Matthew Gili, President and CEO
For further information
call:Rich Matthews,VP Investor RelationsPhone:
604-355-7179Toll free: 1-877-648-8266 Email:
rmatthews@nevadacopper.com
Cautionary Language
This news release includes certain statements
and information that constitute forward-looking information within
the meaning of applicable Canadian securities laws. All statements
in this news release, other than statements of historical facts are
forward-looking statements. Such forward-looking statements and
forward-looking information specifically include, but are not
limited to, statements that relate to the approval of the Company’s
“financial hardship” application.
Often, but not always, forward-looking
statements and forward-looking information can be identified by the
use of words such as “plans”, “expects”, “potential”, “is
expected”, “anticipated”, “is targeted”, “budget”, “scheduled”,
“estimates”, “forecasts”, “intends”, “anticipates”, or “believes”
or the negatives thereof or variations of such words and phrases or
statements that certain actions, events or results “may”, “could”,
“would”, “might” or “will” be taken, occur or be achieved.
Forward-looking statements or information are subject to known or
unknown risks, uncertainties and other factors which may cause the
actual results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements or information.
Forward-looking statements or information are
subject to a variety of risks and uncertainties which could cause
actual events or results to differ from those reflected in the
forward-looking statements or information, including, without
limitation, risks and uncertainties relating to: the state of
financial markets; regulatory approvals; the impact of COVID-19 on
the business and operations of the Company; history of losses;
requirements for additional capital; dilution; adverse events
relating to construction, development and ramp-up, including the
ability of the Company to address underground development and
process plant issues; ground conditions; cost overruns relating to
development, completion and ramp-up of the Pumpkin Hollow
Underground Mine; loss of material properties; interest rates
increase; global economy; no history of production; future metals
price fluctuations and the continuation of the current low copper
price environment; speculative nature of exploration activities;
periodic interruptions to exploration, development and mining
activities; environmental hazards and liability; industrial
accidents; failure of processing and mining equipment to perform as
expected; labor disputes; supply problems; uncertainty of
production and cost estimates; the interpretation of drill results
and the estimation of mineral resources and reserves; changes in
project parameters as plans continue to be refined; possible
variations in ore reserves, grade of mineralization or recovery
rates may differ from what is indicated and the difference may be
material; legal and regulatory proceedings and community actions;
the outcome of the litigation with the Company’s prior contractor;
accidents; title matters; regulatory restrictions; increased costs
and physical risks relating to climate change, including extreme
weather events, and new or revised regulations relating to climate
change; permitting and licensing; volatility of the market price of
the Common Shares; insurance; competition; hedging activities;
currency fluctuations; loss of key employees; other risks of the
mining industry as well as those risks discussed in the Company’s
Management’s Discussion and Analysis in respect of the year ended
December 31, 2019 and in the section entitled "Risk Factors” in the
Company’s Annual Information Form dated March 29, 2019. Should one
or more of these risks and uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described in forward-looking statements or
information.
The Company provides no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements.
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