Nevada Copper Provides Corporate and Operations Update
February 19 2021 - 7:12PM
Nevada Copper Corp. (TSX: NCU) (“
Nevada
Copper” or the “
Company”) provides a
corporate and operations update for the underground mine at its
Pumpkin Hollow project (the “
Underground
Project”).
Operations Update
Shaft Commissioning and Hoisting
- Following completion of the main
shaft material handling system, the Company achieved a peak daily
hoisting rate of over 3,000 tons in February, and has achieved a
hoisting rate equivalent to 5,000 tons per day on a shift
basis.
- Despite the improving hoisting
rates, the cumulative impact of a series of unplanned stoppages due
to mechanical issues and other incidents in the main shaft has led
to lower than expected ore production to date in 2021. Average
hoisting rates for February to date were approximately 1,600 tons
per day, compared to plan of approximately 3,000 tons per day.
Retrofitting work to resolve these issues is expected to be
completed in the coming weeks.
Milling Operations
- Mill throughput
has performed well at an average of approximately 3,100 tons of ore
per day to date in 2021, with a peak of 4,000 tons per day.
- Recoveries have continued to
increase, with average recoveries of approximately 90% in
February.
- Product specifications remain
consistent with expectations, with high-grade, clean copper
concentrates being delivered to the Company’s offtaker.
- The mill continues to process
development ore, with higher grade stope ore expected to be
available in the coming months as planned.
Production Ramp-up
- As a result of the
shaft delays noted above, and delayed upgrade of the underground
electrical and ventilation systems, production of copper
concentrates during the first half of 2021 is expected to be
significantly lower than planned.
- The resolution of the main shaft
commissioning items, the ongoing installation of incremental
underground power and ventilation upgrades and the deployment
underground of additional mobile fleet equipment is expected to
result in increased copper production rates beginning in the second
quarter of 2021.
- The Company expects that, due to
the delays noted above, steady state production of 5,000 tons of
ore per day will be deferred from mid year into the third quarter
of 2021.
“We are pleased with the continued improvements
of the milling operations and the peak hoisting numbers achieved
this month,” stated Mike Ciricillo, CEO of Nevada Copper. “We look
forward to completing upgrades to the Main Shaft in the coming
weeks and the resulting increases in hoisting and production.”
Financial Update
- The Company
recently executed and closed the credit facility previously
announced on December 9, 2020 (the “Credit
Facility”), which allows for $15 million to be drawn
subject to certain conditions. In addition, the lender has
confirmed its intention to make the accordion feature available to
the Company as required, which will expand the size of the Credit
Facility by $15 million.
- The project delays highlighted
above will reduce copper sales compared to the Company’s plan for
the first half of 2021. The Company intends to address the
resulting additional cash needs to advance the ramp-up through the
utilization of its cash on hand, the working capital facility, the
$5 million of dedicated cost overrun funds, and borrowings under
the Credit Facility.
Contractors Settlement
- The Company’s wholly-owned
subsidiary, Nevada Copper, Inc., has settled its legacy disputes
with its contractors, Cementation USA Inc. and Sedgman USA Inc.
Pursuant to the settlements, the Company has paid $1 million and
issued $2 million in common shares and will make $14 million of
cash payments via instalments beginning in September 2021. In
addition, the Company may be required to issue up to an additional
$2 million in common shares if certain performance measures are
achieved.
- These
settlements result in an improvement of the Company’s working
capital position by $16 million, including a reduction in amounts
payable by $4.7 million from what was previously projected. The
Company also received the return of cash from the release of its
litigation bond.
There can be no assurance that the actual costs
to complete the ramp-up will not be greater than expected by the
Company. In the event of further cost overruns, the Company will
need to seek additional funding. The Company continues to advance
its medium and longer-term mine planning analysis, including
related costs and timing implications.
Qualified Persons
The 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 non-independent Qualified Persons 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 in the production stage, and a large-scale open pit
project, which is advancing towards feasibility status.
NEVADA COPPER
CORP.www.nevadacopper.com
Mike Ciricillo, President and
CEO
For further information
contact:Rich Matthews, Investor RelationsIntegrous
Communicationsrmatthews@integcom.us+1 604 757 7179
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 operational matters and mine
development plans, production and ramp-up plans and the expected
costs, timing, results and funding thereof.
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 and events 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 ability of the
Company to complete the ramp-up of the Underground Project within
the expected cost estimates and timeframe; requirements for
additional capital and no assurance can be given regarding the
availability thereof; the impact of COVID-19 on the business and
operations of the Company; the state of financial markets; history
of losses; dilution; adverse events relating to milling operations,
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,
construction and ramp-up of the Underground Project; loss of
material properties; interest rates increase; global economy;
limited 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; 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 from management’s
expectations and the difference may be material; legal and
regulatory proceedings and community actions; the outcome of
disputes with the Company’s contractors; accidents; title matters;
regulatory approvals and 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
Company’s 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 and uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in
forward-looking statements or information. The forward-looking
information and statements are stated as of the date hereof. The
Company disclaims any intent or obligation to update
forward-looking statements or information except as required by
law.
The Company 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. Accordingly,
readers should not place undue reliance on forward-looking
statements and information.
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