The Pumpkin Hollow restart plan is intended to de-risk the path to full-scale production by focusing on de-bottlenecking and completing critical capital projects. The objective is to build-up enough stope ore inventory to facilitate a more efficient ramp-up upon mill restart. Nevada Copper will change the arrangement with the underground mining contractor to improve performance of ramp-up activities and ultimately transition certain underground mining activities to the company. Miners would complete a second dike crossing during the third quarter of 2022 and a third (and final) dike crossing would be completed by the end of 2022. Stoping in the higher-grade East North mining zone could be begin in the second quarter of 2023, which would allow the mill to restart in the third quarter of 2023.

If the restart plan is executed as planned and on schedule, mine management anticipates that underground production will ramp-up to hoisting rates of approximately 3,000 tons per day (t/d) in the third quarter of 2023 and then further increase to 5,000 t/d in the fourth quarter of 2023.

Non-binding terms have been agreed with the company’s senior lender, KfW IPEX-Bank (KfW), its working capital provider, Concord Resources Ltd., its largest shareholder, Pala Investments Ltd., another significant shareholder, Mercuria Energy, and its stream and royalty partner, Triple Flag Precious Metals Corp. for a restart funding package of up to $93 million.

Pala and Mercuria will provide $20 million each in exchange for common shares of the company. Pala has already provided an early disbursement of $7.5 million from its $20 million commitment. Triple Flag will increase its existing net smelter returns (NSR) royalty on the company’s open-pit project from 0.7% to 2% for a purchase price of $26.2 million, subject to a full buyback of the increased royalty percentage. In addition, Triple Flag will accelerate the $3.8 million remaining to be funded under the company’s existing metals purchase and sale agreement for the underground mine.

Nevada Copper’s senior credit facility with KfW will be amended to provide for a new tranche of up to $25 million, of which Pala, Triple Flag and Mercuria would commit the first $15 million as a backstop. KfW will defer three interest payments under the KfW Facility. Concord will defer interest and principal payments under the company’s working capital facility.

Nevada Copper and Pala will consolidate all the debt under an amended credit facility. The outstanding loans would include the $53 million outstanding under the Pala Facility, and $20 million that was recently advanced to the company under a promissory note in June and July 2022. Amounts owing under the Amended Credit Facility would be convertible into common shares of the company, at Pala’s option, at a conversion price equal to a 20% premium to Nevada Copper’s stock price.

In conjunction with the restart financing package, Nevada Copper CEO Randy Buffington will join the board as a director. Both Triple Flag and Mercuria will each have the right to nominate a director and to have a representative on the board’s technical committee. Matt Anderson will replace Kris Sims as the interim CFO of the company. He previously served as the director of corporate finance for Argonaut Gold Inc.