Nevada Copper Corp NEVDQ

NCU and the Elephant in the room

[longshot52]

Everyone here is talking about how the share price is going down because of lower copper prices, but no one mentions an even more important reason - NCU is quickly running out of money. On Sep 30th they had ~$6.5M in cash and $30M in contractual obligations in the next 12 months (comes out to $2.5M/mth). The total obligations are ~$196M, not including interest and they have no source of revenue. NCU will get $110M from RK Mine Finance but that is contingent upon them obtaining sufficient proceed necessary to achieve commencement of commercial production and certain project milestones. Both RK Mine Finance $90M+ and Pala Investments LTD $25M+ are loans that are secured by assets of NCU. The last time NCU raised money through a Private Placement was Apr 2010 at $3/share. NCU would have to issue 32M shares at 75 cents just to stay afloat over the next 10 1/2 mths. Do you think Pala would welcome that kind of dilution? At 75 cents the market says NCU is only worth $60M. In theory in the next few months when NCU runs out of money Pala may not give it another loan but strike a deal with RK Mine to buy all or a portion of their loan and put the company into receivership and screw the other half of the shareholders. Stranger things have happened. Back in 2008/2009 NCU was in much better shape as they had $2.5M in working capital, 375K in liabilities and a far lower burn rate, and only 40M shares outstanding.