Nevada Copper files for bankruptcy, names new top boss

Cash-strapped miner Nevada Copper (TSX: NCU) has filed for bankruptcy protection under Chapter 11, kicking off a restructuring process during which its Pumpkin Hollow mine will be halted.

President and chief executive, Randy Buffington, has resigned and the Canadian company has appointed mining veteran Tom Albanese, its lead independent director, as the new chairperson.

The move follows Nevada Copper’s announcement last week that it had “significantly scaled down operations” at the Nevada-based copper mine after failing to secure necessary funding to keep the project running.

The Vancouver-based miner had said earlier this year it required additional funding to meet ongoing challenges at Pumpkin Hollow, where it restarted operations in the fourth quarter of 2023. Issues encountered included a build-up of water underground, an incomplete ore handling system and unexpected bottlenecks that caused repeated shutdowns of the processing plant.

Nevada Copper has asked for standard support measures for its employees and essential vendors as part of the Chapter 11 process. It is seeking approval from the court to continue paying employee salaries, wages, and benefit programs, regardless of any outstanding amounts prior to filing for bankruptcy. 

To ensure liquidity during the restructuring period, the miner has obtained a commitment for $60 million in debtor-in-possession financing from US hedge fund Elliott Investment Management. Nevada Copper has requested that $20 million of this amount be made available on an interim basis, subject to court approval.

Nevada Copper’s shares plunged to a new low of C$0.030 on Friday and they are down over 78% so far this year. Its market capitalization now stands at C$43.2 million ($31.4m).