Nevada Copper receives up to $30M (U.S.) term sheet NEVADA COPPER PROVIDES OPERATIONS AND CORPORATE UPDATE
Nevada Copper Corp. has provided an operations update, including October production and progress with completion of the Main shaft at its Pumpkin Hollow underground mine.
Mike Ciricillo, chief executive officer of Nevada Copper, stated: "We are pleased that the Main shaft steelwork is complete and that work is progressing on the materials handling system. In the meantime, we continue to hoist development ore via the East North vent shaft and look forward to our continued ramp-up to 5,000 tpd. We are also pleased that our lateral development rates are on schedule with development ore grades continuing to increase to targeted levels. Mill ramp-up continues positively with extended periods of operation approaching nameplate throughput and recovery."
Operational update
The company's underground lateral development rates continue to be on schedule, with ore grades encountered in continuing development reconciling well to resource model grades, and hoisted development ore grades improving as expected with stope development. Average stope development grades in October reached over 2 per cent copper equivalent grades.
During October the steelwork in the Main shaft was completed. Work is continuing in the Main shaft to complete the remaining loading pocket. By the middle of November the company plans to use the Main shaft to transfer materials, supplies and people, freeing the East North vent shaft to be used exclusively for development ore and waste movement, with a resultant expected increase in ore hoisting rates.
Staged commissioning of the Main shaft material handling system has commenced. The company is testing the communication system and interaction of these sections to ensure ramp-up can be accelerated once the underground conveyor is installed later in the quarter.
Processing plant performance continued to improve with recoveries increasing 10 per cent in October from September. Mill throughput rates are continuing to increase as mill optimization is continuing, reaching throughput rates approaching design. Campaign milling is being utilized to optimize ore stockpile management heading into the commissioning of the Main shaft materials handling system.
In October the company continued to deliver on spec copper concentrates to its offtaker, and October concentrate production increased 140 per cent from September, 2020.
Mine planning
Further to the company's Aug. 6, 2020, and Oct. 5, 2020, updates regarding localized geotechnical changes arising from recent definition drilling in the Upper East South zone, the company has continued its review of the costs associated with initially smaller stopes during the ramp-up period. Additional geotechnical review and continuing definition drilling completed in October continues to support the company's mine plan which shows production quickly transitioning to predominately larger stopes over Q1 2021 and thereafter, supporting sustained mining of larger stopes as previously planned. While the move to initially smaller stopes in the Upper East South zone will further derisk the project and does not affect the life-of-mine resource, the change will increase costs in the short term.
In light of the additional costs associated with this change in mine plan during the ramp-up period, management has concluded that the company will require additional financing over the next four months as it completes the ramp-up and transitions out of the immediate mining area back into originally planned larger stopes which are typical of the broader mine.
Financing update
The company is in discussions with KfW-IPEX Bank, its senior lender and has received a term sheet from a third party for an additional credit line of $20-million (U.S.) to $30-million (U.S.) to finance its increased cash requirements. Discussions are also continuing with other potential financing sources. The company's largest shareholder, Pala Investments Ltd., has confirmed it will continue to provide financial support to the company until the end of the year, by which time the company expects to complete a financing. There can be no assurance that a financing will be completed, and in the absence of sufficient financing, the company may not be able to continue operations. The company will provide further financing updates in the coming weeks.
The estimated timing for completion of the ramp-up remains subject to revision based on the availability of funding, the impacts of the COVID-19 pandemic and other factors.
Qualified persons
The information and data in this news release were reviewed by Greg French, CPG, and David Sabourin, PE, for Nevada Copper, who are non-independent qualified persons within the meaning of National Instrument 43-101.
About Nevada Copper Corp.
Nevada Copper is a copper producer and owner of the Pumpkin Hollow copper project. 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 mine and processing facility, which is now in the production stage, and a large-scale open-pit project, which is advancing toward feasibility status.