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TORONTO , March 30, 2020 /CNW/ – Pala Investments Limited (“Pala“), a multi-strategy investment company focused on the mining and metal value chain, entered into the following transactions with Nevada Copper Corp. (the “Company“) on March 27, 2020 (collectively, the “Transactions“) in connection with the Company’s substantial balance sheet strengthening package announced on such date:

(1)  Pala entered into a convertible loan facility (the “Loan Facility“) with the Company in the principal amount of US$30,000,000 (“Convertible Loan“). The Loan Facility bears interest at an annual rate of 14% and matures in 4 years. The proceeds of the Loan Facility were used to repay in full the existing credit facility dated November 29, 2019 between Pala and the Company, as amended (the “Existing Facility“).

At the option of the Company, subject to approval of the Toronto Stock Exchange (the “TSX“), accrued interest under the Loan Facility may be satisfied through the issuance of common shares of the Company (the “NCU Shares“) based on the five-day volume weighted average price (“VWAP“) of the NCU Shares ended on the day prior to the relevant interest payment date, provided that the Company may always pay such interest in cash if permitted to do so under its existing financing arrangements.

Subject to approval of the TSX, Pala may, at any time, and from time to time, convert all or a portion of the Convertible Loan into NCU Shares at a price per NCU Share which is the lower of: (a) C$0.1575 (being a 1% premium to the five-day VWAP of the NCU Shares on the TSX over the period ending March 25, 2020 ); and (b) a 5% premium to the five-day VWAP of the NCU Shares on the TSX over the period ending on April 1, 2020 (being the expected date of obtaining the TSX approval, the “TSX Approval Date“)), with a minimum conversion price of C$0.12 per NCU Share.

(2)  Pala and the Company entered into an amendment to the Existing Facility, whereby all fees, interest and other expenses that have accrued, are outstanding or became outstanding as a result of the repayment of the Existing Facility, in the aggregate amount of US$3,400,000 , will, subject to approval of the TSX, be satisfied through the issuance of an aggregate of 32,400,000 NCU Shares to Pala on the TSX Approval Date (the “Fee Shares“).

(3)  Pala, the Company and Triple Flag Mining Finance Bermuda Ltd. entered into a backstop agreement (the “Backstop“) providing for up to US$20,000,000 which will be available for the Company to call on capital from Pala when required until December 31, 2021 if it is unable to raise capital from other sources. If funds are called by the Company under the Backstop, the obligations of the Company under the Backstop will be satisfied through the issuance of NCU Shares, which NCU Shares will be issued at a price to be agreed by the Company and Pala within the applicable pricing rules of the TSX, but if a price cannot be agreed will be based on the market price (as defined in the policies of the TSX) at the relevant time less a discount of 20%. If the Backstop is called after December 31, 2020 , and the obligations under any such call would require disinterested shareholder approval under the policies of the TSX, the Company must obtain such approval as a condition to completion of the call under the Backstop. In the event such disinterested shareholder approval is not obtained, any amounts called under the Backstop for which such approval was sought will be in the form of subordinated unsecured debt which will have substantially the same terms as the Existing Facility, but without the related fees, with a 3 year maturity date and prepayable at any time. For certainty, any calls made by the Company under the Backstop prior to December 31, 2020 will not be subject the shareholder approval requirements of the TSX. Notwithstanding the foregoing, Pala may elect to fund its obligations under the Backstop through the issuance by the Company of convertible debt, which convertible debt will have a 3 year term to maturity, a conversion price of a 5% premium to the market price (as defined by the policies of the TSX) of the NCU Shares at the time of issuance, no fees payable, an interest rate of 12% and shall be prepayable by the Company at any time. There is a fee payable to Pala upon entering into the Backstop in an aggregate amount of US$800,000 , which, subject to TSX approval, will be payable through the issuance of an aggregate of 7,500,000 NCU Shares on the TSX Approval Date (the “Backstop Fee Shares“), reflecting a price per NCU Share of C$0.1575 .

(4)  In connection with the provision by Pala of certain surety bonds provided to third party contractors to support the ramp-up process relating to the Pumpkin Hollow Underground Mine, Pala is owed an aggregate of US$2.1 million relating to fees for providing such surety bonds. Such fees will be satisfied, subject to TSX approval, through the issuance of an aggregate of 18,900,000 NCU Shares (the “Indemnity Fee Shares“) on the TSX Approval Date, reflecting a price per NCU Share of C$0.1575 .

Immediately prior to the Transactions, Pala held an aggregate of 274,379,447 NCU Shares, representing approximately 36.01% of the issued and outstanding NCU Shares on a non-diluted basis.

Immediately following the Transaction, assuming the issuance of the Fee Shares, Backstop Fee Shares and Indemnity Fee Shares and assuming exercise of the Convertible Loan at conversion price of C$0.1575 (collectively, the “Pala Issuances“), Pala would hold the following number of NCU Shares:

Exchange Rate

Total number of NCU Shares
issued to Pala pursuant to Pala
Issuances

Total number of NCU held by
Pala assuming Pala
Issuances

% of NCU Shares owned
by Pala assuming Pala
Issuances

US$1 = C$0.68

361,321,008

635,700,455

56.6%

US$1 = C$0.73

340,600,391

614,979,838

55.8%

US$1 = C$0.76

329,476,692

603,856,139

55.3%

 

Furthermore, Pala may acquire additional NCU Shares pursuant to Backstop, however the price per NCU Share to be paid by Pala in connection therewith has not been determined and it is therefore not possible to determine the number of NCU Shares that may be issuable to Pala in connection with the Backstop.

Pala has entered into the 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 NCU 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 Suite 598 – 999 Canada Place, Vancouver, British Columbia , Canada V6C 3E1. Pala is a company existing under the laws of Jersey and its address is 12 Castle Street, St. Helier, Jersey JE2 3RT.

About Pala

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 Holdings Limited

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