Nevada Copper Corp T.NCU

RE:Dundee Capital Markets comments on Nevada Copper Corpoation

[shakerman640]

According to Dundee Capital Markets:

https://www.ge.tt/5RTb9kM2/v/0?c

Nevada Copper Corp.

(NCU-T: C$1.22)

August 21, 2015

Rating: BUY, High Risk

Dundee target: C$3.00

Pumpkin Hollow Is Shovel Ready - Now Show Me The Money

Pumpkin Hollow land conveyance completed: NCU announced this morning that the Yerington Land Conveyance of federal land encompassing NCU's Pumpkin Hollow Project to the City of Yerington (the "City") has closed. On August 20th, the Bureau of Land Management signed a deed of sale that conveys 10,058 acres of federal land to the City. Pursuant to an existing agreement between NCU and the City, 9,310 acres of the acquired land will be re-conveyed to NCU - the final steps to re-convey the land are now entirely administrative, and the City has advised NCU that it can immediately proceed with any work needed to develop the Pumpkin Hollow Project. In combination with NCU's existing 1,550 acres of private land, the newly conveyed land places the entire Pumpkin Hollow integrated open pit and underground mine on private land, owned by NCU, and allows the project to be constructed and operated with its current Nevada State permits.

Permitting & land conveyance de-risked: This is very positive news for NCU - the completion of the land conveyance and recent receipt of all necessary permits represents a significant de-risking milestone for the Pumpkin Hollow Project. Project financing is the major catalyst on the NCU story.

Pumpkin Hollow financing recap: If NCU chooses not to drawdown on the remainder of the Red Kite facility, the company will have to raise approximately $277MM to finance the remainder of the Phase 1 CAPEX, or $1.07Bn to finance the integrated option. Conversely, if NCU chooses to drawdown on the balance of the Red Kite Facility, then only $167MM would have to be raised to fund Phase 1, or ~$897M for the integrated approach.

NCU CAPEX & Financing Requirements



Source: DCM, Company Documents

The final draw on the Red Kite loan facility will be advanced on the completion of certain project and financing milestone options. We believe NCU would prefer not to drawdown on the balance of the Red Kite facility, and could consider equity, debt, selling part of its assets, finding a partner in the Pumpkin Hollow project, or M&A.

Bottom Line: We maintain our belief that NCU is an attractive M&A target - based on HBM's recent acquisition of AZC, we believe NCU has an implied takeover valuation ranging from $2.00-$5.57/share. We have a BUY rating on NCU and a target price of $3.00/share based on a 0.9x multiple to our NAV of $3.33/share.