Nevada Copper Corp. (TSX: NCU) (“Nevada Copper” or the “Company’’)
is pleased to provide an operations update including development
progress and restart preparations at Pumpkin Hollow.
Accelerated Mine Development and Restart
Planning
The Company is making significant progress and is
on target to re-start copper production in August 2020, following
the temporary suspension of copper production due to the impact of
COVID-19:
- Mine Development: Multiple key milestones have
been completed ahead of schedule on final configuration of the East
Main Production Shaft, including:
- The main shaft has been sunk and lined to final depth
- Permanent production hoist systems have been installed and the
headframe has been configured for shaft equipping and subsequent
production
- Equipping of the shaft below surface is progressing ahead of
schedule, and is currently approximately 32% complete
- The surface materials handling infrastructure has been
completed and moved to its final position on the south side of the
head frame
- Final shaft configuration and commissioning of the hoisting
system in production configuration is ahead of schedule and is
expected to be complete in Q4, 2020
- Ongoing Lateral Development:
- Lateral development rates are ahead
of the revised plan targets, the focus of which has been to
complete key underground infrastructure areas, develop improved
access to ore stoping areas and prepare stopes for ramp-up
production on commissioning of the Main Shaft
- Ore stockpiled ahead of the process
plant restart is continuing to increase, now sitting at over
150,000 tons
- Mine planning to develop detailed
production mining layouts and stope sequencing has commenced
following receipt of the updated geological model and revised
geotechnical design parameters developed from underground infill
drilling and mapping of the development
- The updated geotechnical parameters
indicate changes to some of the stope dimensions in the East South
deposit. Updated design, extraction sequences and scheduling are
currently being finalized and now being incorporated into the final
mine plan to support the ramp up schedule
- Process Plant:
- Restart of the processing plant and
ramp-up of operations is expected to re-commence in August
2020
- Restocking of consumables and
additional spares for the mill is underway and the re-mobilization
of mill personnel has commenced in anticipation of the plant
restart
- Shipping Arrangements:
- The concentrate shipping arrangements are in place with a
concentrate truck-to-rail transload facility established at Tahoe
Reno Industrial Centre site east of Reno, Nevada with access to the
Union Pacific mainline. Concentrates will be shipped by rail to US
west coast ports for bulk shipment
The company intends to complete its accelerated
development plan and restart concentrate production in August 2020,
subject to revision based on impacts of the COVID-19 pandemic and
ongoing mine planning in addition to other factors.
Evan Spencer, Chief Executive Officer of Nevada
Copper, stated “We are now entering the key stage before the
re-commencement of production at Pumpkin Hollow. Our team and
contractors are continuing to deliver on schedule as we prepare for
production later this month.”
“We are very pleased with the strong demand from
investors to participate in the Company’s equity offering completed
in July 2020 and would like to thank our existing shareholders and
new institutional and retail investors for their continued support.
We look forward to completing ramp-up of production at Pumpkin
Hollow and continuing to advance our organic growth pipeline,
including the open pit and exploration properties.”
Open Pit ProjectThe Company
expects to continue advancing optimizations for its Open Pit
Project following the current focus on ramp-up of the Underground
Mine. The optimizations are expected to include further extension
and in-fill drilling as a follow-up to the last Open Pit drilling
program, which identified significant additional mineralization and
indicated the ore body extends beyond the original pit boundary and
remains open in multiple directions, as well as value engineering
options and trade-offs with the aim of further enhancing project
economics. Further updates on Open Pit advancement plans will be
communicated as appropriate.
Exploration
The Company continues to evaluate its extensive
mineral landholdings at and around Pumpkin Hollow, including
drilling and/or trenching, where appropriate, and to look for
opportunities to increase its landholdings at the appropriate
time.
The Company recently staked an additional, highly
prospective land package covering approximately 680 acres
immediately contiguous to its existing Pumpkin Hollow property and
along the eastern boundary of the Tedeboy area. Review of
historical aero-magnetic survey data in this area has identified a
magnetic high which coincides with the identification of anomalous
copper mineralization from surface grab samples confirming the
prospectivity of this newly acquired property.
The Company continues to prioritize advancing its
high-priority targets in accordance with cash availability.
Financing Highlights
During the first six months of 2020 and thereafter,
the Company entered into the following financing initiatives:
- Amendment to the KFW IPEX-Bank Facility providing for an
aggregate of $12.2 million in payment deferrals, with no principal
payments due until July 2022 and no debt service reserve account
funding due until January 2022.
- Agreement with Concord Resources to delay repayments that would
otherwise have fallen due under the Working Capital Facility until
September 2020
- Royalty agreements with an affiliate of Triple Flag Precious
Metals Corp. and an amendment to the Company’s stream agreement
(the “Stream Agreement”) with Triple Flag Mining Finance Bermuda
Ltd. providing proceeds of $30 million and an additional $5 million
to be paid to the Company through the reinvestment of 50% of the
value of metal deliveries made under the Stream Agreement
- Payroll Protection Program loan provided by the United States
federal government in the amount of $2.4 million that the Company
received in April 2020
- Completion of its public offering on July 28, 2020 (the
“Offering”) which raised approximately CAD$98 million of net
proceeds
A portion of the net proceeds from the Offering was
used to prepay in full the Company’s $30 million convertible loan
facility. The principal amount outstanding including capitalized
and accrued interest and fees was $33.8 million. The Company also
used a portion of the net proceeds from the Offering to repay other
outstanding indebtedness (including short-term financing provided
by Pala in the principal amount of $15.1 million). The Company
intends to use the remaining net proceeds from the Offering to fund
its operations, including the accelerated mine development plan and
to re-start and ramp-up production of the Underground Project and
for general corporate purposes.
Q2 2020 Financial Statements
The Company has filed on SEDAR its condensed
consolidated interim financial statements and the related
management’s discussion and analysis for the quarter ended June 30,
2020. Copies of these documents are available on the Company’s
website at www.nevadacopper.com and under the Company’s SEDAR
profile at www.sedar.com.
Qualified PersonsThe information
and data in this news release was reviewed by Greg French, C.P.G.,
and David Sabourin, P.E, for Nevada Copper, who are a
non-independent Qualified Person within the meaning of NI
43-101.
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 transitioning to the production stage, and a large-scale open
pit project, which is advancing towards feasibility status.
NEVADA COPPER
CORP.www.nevadacopper.com
Evan Spencer, President and
CEO
For further information
contact:Rich Matthews, Investor RelationsIntegrous
Communicationsrmatthews@integcom.us+1 604 355 7179
Cautionary Language
This news release includes certain statements and
information that constitute forward-looking information and
forward-looking statements within the meaning of applicable
Canadian and United States securities laws. Such forward-looking
statements and forward-looking information specifically include,
but are not limited to, statements and information that relate to:
Nevada Copper’s plans for the Project; the impacts of the COVID-19
pandemic, the end of the suspension and re-start of copper
production at the Underground Project and plans in respect thereof;
the anticipated use of proceeds from the Offering; the Company’s
mine development and ramp-up plans (including as a result of the
updated geological model, revised geotechnical design parameters
and final mine plan) and the expected results thereof; the ongoing
exploration activities and the objectives and results thereof; and
the other plans of Nevada Copper with respect to the exploration,
development, construction and production at the Project.
Forward-looking statements and information include
statements regarding the expectations and beliefs of management.
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 should not be read as
guarantees of future performance and results. They are subject to
known and unknown risks, uncertainties and other factors which may
cause the actual results and events to be materially different from
any future results, performance or achievements expressed or
implied by such forward-looking statements or information.
Such risks and uncertainties include, without
limitation, those relating to: the state of financial markets; the
impact of the COVID-19 pandemic 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 Underground Project; loss of material properties;
interest rates increase; global economy; no history of production;
future metals price fluctuations; 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; labour 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 from management’s expectations and the difference may be
material; legal and regulatory proceedings and community actions;
the outcome of the disputes with the Company’s contractors;
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 May 15, 2020. Should one or
more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described in forward-looking statements and
information. The forward-looking statements and information
contained herein are based upon assumptions management believes to
be reasonable, including, without limitation: no adverse
development in respect of the Property; no material changes to
applicable laws; the re-start of copper production and ramp-up of
operations at the Underground Project in accordance with
management’s plans and expectations; no worsening of the current
COVID-19 related work restrictions; reduced impacts of the COVID-19
pandemic in the medium-term and long-term; no material adverse
change to the price of copper from current levels; and the absence
of any other factors that could cause actions, events or results to
differ from those anticipated, estimated or intended. The
forward-information and statements are stated as of the date
hereof. Nevada Copper disclaims any intent or obligation to update
forward-looking statements or information except as required by
law. Readers are referred to the additional information regarding
Nevada Copper’s business contained in Nevada Copper’s reports filed
with the securities regulatory authorities in Canada. Although the
Company has attempted to identify important factors that could
cause actual results to differ materially, there may be other
factors that could cause results not to be as anticipated,
estimated or intended. For more information on Nevada Copper and
the risks and challenges of its business, investors should review
Nevada Copper’s filings that are available at www.sedar.com.
Nevada Copper provides no assurance that
forward-looking statements and information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements or
information. Accordingly, readers should not place undue reliance
on forward-looking statements or information.
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