Base metals developer Nevada Copper has announced a significant financing package to ramp up its Pumpkin Hollow underground mine, where mining activities were suspended last year owing to liquidity challenges.

The $115-million financing package will be used to accelerate the development of the mine with the goal of achieving a nameplate production capacity of 5 000 t/d by the end of the year.

The financing demonstrates key shareholder support and allows for the immediate mobilisation of US underground mining contractor, Small Mine Development (SMD).

“We continue to make excellent progress on our capital and development projects in preparation for restart of mining in the second half of 2023. With significant progress delivered across capital projects, drilling and mine development, in addition to the mobilisation of SMD as the underground mining contractor, we are moving swiftly to complete the ramp-up of the underground mine,” said president and CEO Randy Buffington.

TSX-listed Nevada Copper has entered into an agreement with Scotia Capital, on behalf of a syndicate of underwriters, to purchase on a bought-deal basis 173 705 000 units at C$0.27 each for gross proceeds of C$47-million. The underwriters have an overallotment option of about C$54-million.

The company’s biggest shareholder, Pala, has agreed to purchase C$33.5-million of the units under the offering, while another significant shareholder, Mercuria, has agreed to subscribe for C$6.7-million of units.

Nevada Copper has also entered into a binding financing package agreement with Pala, Mercuria and TF R&S Canada, an affiliate of stream and royalty financing partner Triple Flag.

Further, the company said that it had drawn the first $15-million of the $25-million extension tranche that was added to its senior credit facility with KfW IPEX-Bank last year. Pursuant to the financing agreement, Pala, Mercuria and Triple Flag have committed to provide the remaining $10-million undrawn amount under the extension tranche, with Pala, Mercuria and Triple Flag committing to each provide $3.33-million of the extension tranche.

The company, Pala, Mercuria and Triple Flag have also agreed to support the expansion of the extension tranche by $10-million, to an aggregate amount of $35-million.

In addition, Nevada Copper and Triple Flag have agreed that certain metal deliveries that become due to Triple Flag under its stream agreement will be financed through loans or advances under the extension tranche for up to $15-million for 2023.

Upon the closing of the offering, Pala and Mercuria have agreed to enter into a deferred funding agreement, pursuant to which they will provide up to $15-million and $10-million, respectively, subject to certain conditions, to be drawn pro rata by the company, if required, until June 30, 2024.

“With significant copper mineral reserves and resources and once operating at nameplate capacity, the underground mine will support the global drive towards electrification and a renewable energy future. This financing positions us to advance our ramp-up of the underground mine and meet our goal of achieving steady-state operations by the end of 2023,” said Buffington.