Nevada Copper Corp NEVDQ

Dundee Capital Markets: Buy rating and $3.00 target for NCU

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According to Dundee Capital Markets:

https://personal.crocodoc.com/LCYjmPr

Nevada Copper Corp.

(NCU-T: C$1.87)

May 13, 2015

BUY, High Risk

Dundee target: C$3.00

Pumpkin Hollow Permitting Delayed, But Worth The Wait

Permitting pushed back by 1Q: This morning NCU announced a permitting update on their 100% owned Pumpkin Hollow Project. All permit applications have been submitted, including modifications to the existing State air pollution and reclamation permits. NCU expects the modified permits will be completed by Q3/15, one quarter later than we initially expected. Despite the delay, we maintain our belief that NCU remains an attractive M&A target and is worth the wait. Based on HBM's recent acquisition of AZC, we believe NCU has an implied takeover valuation ranging from $2.23-$5.53/share. We have a BUY rating on NCU and a target price of $3.00/share based on 0.8x multiple (unch.) to our NAV of $3.72/share.

Financing Recap: As of March 31, 2015, NCU has a cash balance of US$22M. NCU also has US$110M remaining as the undrawn portion of its Red Kite facility. The final drawdown is subject to certain conditions including the completion of the main shaft and the arrangement of the balance of funding for Stage 1 project capital. NCU also has an available US$24M Caterpillar Financial equipment lease finance facility available for equipment purchasing.

If NCU chooses not to drawdown on the remainder of the Red Kite facility, then the company will have to raise approximately $277MM to finance the remainder of the Stage 1 CAPEX. Conversely, if NCU chooses to drawdown on the balance of the Red Kite Facility, then only $128MM would have to be raised. 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

• Partner in the Pumpkin Hollow project

• M&A