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TORONTO, Oct. 31, 2022 /CNW/ – Pala Investments Limited (“Pala“), a multi-strategy investment company focused on the mining and metal value chain, has acquired 125,435,185 common shares (“Common Shares“) of Nevada Copper Corp. (the “Company” or the “Issuer“) pursuant to a private placement (the “Private Placement Shares“) that was closed concurrently with certain other financing transactions of the Company on October 28, 2022 (the “Issuer Financing Transactions“). The Private Placement Shares were issued at a price per Common Share of C$0.216 (the “Subscription Price“). The consideration payable by Pala to the Company for the Private Placement Shares was satisfied by Pala tendering certain outstanding indebtedness owed by the Issuer to Pala in the amount of US$20,000,000, being equal to C$27,092,928.75 using the Bank of Canada exchange rate as of October 27, 2022 of C$1.00=US$0.7382 (the “Exchange Rate“).

In addition, Pala has amended and restated its existing loan facility with the Company (the “Pala Facility“) pursuant to the terms and conditions of a second amended and restated loan facility (the “New Pala Facility“). The New Pala Facility refinances the entirety of the Pala Facility and certain interim financing provided by Pala to the Issuer, (together with interest accrued thereon and fees) resulting in an aggregate principal amount of US$76,156,134 (the “Pala Debt Principal Amount“). The Company has also provided Pala with 100% warrant coverage of the Pala Debt Principal Amount calculated using the Subscription Price (US$0.1594 using the Exchange Rate) resulting in the issuance of 398,723,212 warrants (the “Pala Warrants“) to Pala concurrent with the closing of the Issuer Financing Transactions. Each Pala Warrant entitles Pala to purchase one Common Share at a price of C$0.2592 until January 31, 2026 (the maturity date of the New Pala Facility) subject to acceleration in the event that all amounts under the New Pala Facility are repaid at an earlier time. To the extent that any interest under the New Pala Facility is not paid in cash, additional warrants on the same terms may be issued in connection therewith (with an exercise price equal to the then current market price of the Common Shares).

Pala has also entered into a backstop agreement with the Company pursuant to which Pala has agreed, subject to certain conditions, to backstop up to US$25,000,000 in exchange for issuances of Common Shares, convertible and/or non-convertible debt of the Company (the “Backstop“). The Company may exercise the Backstop if, subject to other conditions, an aggregate of US$65 million of the committed funding (excluding Pala’s equity contribution, which has already been funded) under the Issuer Financing Transactions has been made available to the Company. The issuance of any Common Shares and/or convertible debt of the Company upon the exercise, from time to time, of the Backstop will be subject to the approval of the Toronto Stock Exchange (the “TSX“) and the pricing of any equity component will be based on a 20% discount to the then current market price. The Backstop will expire on October 28, 2023.  In consideration of providing the Backstop, Pala received a commitment fee of US$1,000,000 (representing a 4% fee) payable in Common Shares at an issue price equal to the Subscription Price (US$0.1594 using the Exchange Rate) resulting in 6,271,759 Common Shares being issued to Pala concurrently with the closing of the Issuer Financing Transactions.

As part of the Issuer Financing Transactions, certain fees in the aggregate amount of US$2,374,037 owed by the Company to Pala were paid through the issuance of 14,889,394 Common Shares at the Subscription Price (US$0.1597 using the Exchange Rate), which were issued concurrently with the closing of the Issuer Financing Transactions. Further information in respect of the Issuer Financing Transactions is contained in the Company’s press releases dated October 26, 2022 and October 28, 2022, copies of which can be found under the SEDAR profile of the Company at www.sedar.com.

Pala’s Security Ownership

Immediately prior to the Issuer Financing Transactions, Pala (including securities held by Pala Assets Holdings Limited, an affiliate of Pala) held (i) an aggregate of 167,759,110 Common Shares, representing approximately 37.4% of the issued and outstanding Common Shares on a non-diluted basis and 58,052,292 Warrants, and (ii) an aggregate of 225,811,402 Commons Shares, representing approximately 44.6% of the issued and outstanding Common Shares, on a partially diluted basis (assuming the exercise in full of the 58,052,292 Common Share purchase warrants (“Warrants“)).

As a result of the Issuer Refinancing Transactions, Pala acquired an aggregate of (i) 146,596,339 Common Shares, and (ii) 398,723,212 Pala Warrants that are exercisable into 398,723,212 Common Shares. As a result thereof, immediately following the Issuer Financing Transactions, Pala (including securities held by Pala Assets Holdings Limited, an affiliate of Pala) held (i) prior to the exercise in full of the Pala Warrants, an aggregate of 314,355,449 Common Shares, representing approximately 47.7% of the issued and outstanding Common Shares on a non-diluted basis and 456,775,504 Warrants, which is an increase of 10.3% in Pala’s securityholding percentage on a non-diluted basis with respect to Common Shares, and (ii) assuming the exercise in full of all of its Warrants, an aggregate of 771,130,953 Common Shares, representing approximately 69.1% of the issued and outstanding Common Shares on a partially-diluted basis, which is an increase of 24.5% in Pala’s securityholding percentage on a partially-diluted basis in respect to Common Shares. In addition, if the Backstop is discharged in part or in full, or interest under the New Pala Facility is not paid in cash, Pala may acquire additional Common Shares or Pala Warrants, however the price per Common Share or Pala Warrant will be based on the future price of the Common Shares and it is therefore not possible to determine the number of Common Shares or Pala Warrants that may be issuable in connection therewith.

Pala is participating in the Issuer Financing Transactions for investment purposes and may increase or decrease the investment in the securities of the Company depending on its evaluation of the business, prospects and financial condition of the Company, the market for the Company’s securities, general economic and tax conditions and other factors.

The Common Shares are listed on the TSX under the symbol “NCU”. Nevada Copper Corp. is a corporation organized under the laws of British Columbia with its head office at 61 E. Pursel Lane, Yerington, Nevada, 89447. Pala is a company existing under the laws of Jersey and its address is 12 Castle Street, St. Helier, Jersey JE2 3RT.

Pala is an investment company focused exclusively on the mining sector with a strong track record of successful investments and value creation. Pala’s team has extensive experience within the sector and seeks to assist companies in which it has long-term shareholdings by providing strategic advice and innovative solutions in development, production, turnaround and advanced exploration situations. Pala invests across all geographies and in all mining commodities as well as mining services and consumables. For more information, visit www.pala.com.

SOURCE Pala Investments Limited