Nevada Copper secures $5M additional Pala investment

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By Ted Liu

Nevada Copper Corp. (TSX: NCU) announced that its long-term cornerstone shareholder, Pala Investments Limited, has agreed to make a further investment of US $5 million in the company.

As at April 15, 2016, Pala Investments Ltd. controlled 50.05% of Nevada Cooper’s outstanding shares

Nevada Copper has also successfully secured extensions to the loan maturities under its existing senior term loan facility with EXP T1 Ltd, an affiliate of Red Kite Mine Finance and its loan facility with Pala.

The Pala investment is in the form of a convertible loan subordinated to the existing Red Kite loan facility, on terms similar to Pala’s existing convertible loans. The maturity of Pala’s outstanding convertible loans has also been extended to December 31, 2018 such that the maturity is aligned with that of the new loan tranche. In connection with the financing, Pala will be issued 2.5 million warrants with a 3-year term with an exercise price at C$0.97, being a 25% premium to the average 20-day VWAP closing market price of the common shares of the Company on February 24, 2017.

Under the amendments to the Red Kite loan facility, monthly interest payments for March to June 2017, estimated at US $4.8 million, will be prepaid from proceeds of the Pala Financing. Interest payments for the balance of 2017 and 50% of the 2018 monthly interest will be accrued. The milestone deadlines for project construction drawdown conditions to be satisfied and the date for first loan principal repayment have both been extended to December 31, 2018.

“Nevada Copper is pleased to have the continued ongoing support of both Pala and Red Kite. The additional funding from Pala and improved Red Kite loan terms provide Nevada Copper with the opportunity to pursue its key initiatives and evaluation of project development options as copper markets continue to improve. Pumpkin Hollow is a Tier 1 asset which has been significantly de-risked and is fully-permitted/shovel-ready with a 1,900 foot production-sized shaft with lateral development, all of which make it a unique and desirable asset in an improving copper market,” said Giulio Bonifacio, CEO of Nevada Copper.

Nevada Copper has also streamlined its board of directors to six members with the retirement of Victor Bradley, Joe Giuffre and Paul Matysek. Evgenij Iorich, a Non-Executive Director, has been appointed Non-Executive Chairman.

photo credit: Nevada Copper