The company also announced that it “has not made payments that were due to certain creditors and vendors, including its mining contractor Redpath,” and that the company has been served a notice of default by Redpath. Though they note that both companies have reached an agreement to stop any mining work at the underground project.
There are currently 3 analysts covering Nevada Copper with an average 12-month price target of C$0.62, or an upside of roughly 170%. Out of the 3 analysts, 2 have hold ratings while 1 analyst has a sell rating on the stock. The street high price target sits at C$0.75 which represents an upside of about 225%.
In Haywood Capital Markets’ note on the news, they reiterate their hold rating on the stock and slash their 12-month price target from C$0.60 to C$0.25, saying that while the new financing helps bring the company back from the brink, it is still not out and in the clear, as the company has close to $200 million in debt and a 38% equity ownership by Pala which will make obtaining new investment a challenge.
Haywood goes on to say that if the debt financing is implemented, it will help stabilize the company and allow them to maintain the assets at the Pumpkin Hollow mine, complete the required dike crossing and advance the open-pit mine feasibility study.
Lastly, Haywood expects that Nevada Copper will revise its production targets and guidance. They have elected to lower their estimates. Haywood now expects copper production will be 10 million pounds in 2022, down from 41 million previously expected. By 2023, they expect the company to produce 40 million pounds, down from 56 million.
Below you can see Haywood’s updated estimates.
Haywood Slashes Nevada Copper's Price Target To Just $0.25 | the deep dive b.