Nevada Copper provides Pumpkin Hollow operations update

Nevada Copper provides updates on restart activities at its Pumpkin Hollow underground mine. Randy Buffington, President and CEO of Nevada Copper, stated, “Since restarting mining and milling operations, we’ve made progress in a number of areas, including completion of life of mine projects such as the Geho dewatering system and phase two of the underground crushing and ore handling system, development of significant stope inventory underground and realignment of the site operations team, under the leadership of Chuck Pollard as Assistant General Manager. However, several unforeseen setbacks impacted our progress on meeting operational targets. We took critical steps and refocused resources to mitigate and address these issues. The hoisting and ore handling system has returned to full capacity and mill operations continue to incrementally improve with over two months of mill feed stockpiled on surface. While I am disappointed that these challenges have negatively impacted our ability to meet hoisting and processing targets, we continue to ramp-up toward steady state operations.” Recent Operating Developments: Hoisting improvements implemented, hoisting increased in the fourth quarter; Over 135,000 tons of ore stockpiled on surface; over 190,000 tons of stope ore ready to mine; Unexpected bottlenecks encountered in process plant systems are being mitigated; Third ore pass and temporary use of ore bin from new life-of-mine ore handling system provides material handling capacity to meet plan until underground crusher is installed; Paste plant fully commissioned; LOM fuel, paste lines in progress; LOM dewatering system in place; Development contractor ramping up development and expected to meet targets. As noted above, several key milestones have been achieved across many aspects of the mine, including completion of critical LOM projects and restart of all significant operations, however, key fourth quarter operational targets were not met. T Considering the unexpected challenges, the Company has generated lower sales through the ramp-up process than previously anticipated, negatively impacting financing requirements. As previously disclosed, the Company has fully drawn US$25 million of debt pursuant to a deferred funding agreement with its two largest shareholders, Pala Investments and Mercuria Holdings. Pala has since been providing sole funding for the Company’s operating needs in the form of debt on similar terms to the Company’s October 2022 credit facility with Pala, except such debt is unsecured and not guaranteed by the Company’s subsidiaries and the interest rate on the debt is SOFR + 10% and it matures in December 2024. The Company requires additional financing in order to complete the ramp-up of the Underground Mine. While Pala has continued to support the Company, it is under no obligation to do so. The Company is also in discussions with other third parties. There is no assurance that additional financing will be obtained in a sufficient amount, or at all. In the absence of securing sufficient funding from Pala or other third parties, the Company will not be able to continue carrying on business.