Nevada Copper Provides Update on Public Offering and Announces Filing of Preliminary Prospectus - Seite 2

“We are exceptionally pleased with the strong support shown by our existing and new shareholders. Given the strong demand, this offering brings multiple benefits to the Company. With this new funding, we look forward to our mill restart next month and commencing ramp-up to full scale production and continuing to advance our other growth and exploration plans.”

Corporate Governance

The board of directors (the “Board”) of Nevada Copper formed a special committee (the “Special Committee”) consisting of members of the Board who are independent of Pala Investments Limited (“Pala”) and Castlelake L.P. (“Castlelake”), to consider the proposed terms of the Offering involving Pala and Castlelake, including the prepayment of the existing US$30 million convertible loan facility that the Company entered into with Pala on March 27, 2020 (the “Convertible Loan”) of which Pala and Castlelake own approximately 98% of the principal amount thereof, the repayment of certain short-term financing provided by Pala and the additional subscriptions under the Offering by Pala and certain funds managed by Castlelake (the “Castlelake Funds”). The Special Committee has met separately from the full Board. After careful consideration, the Special Committee unanimously recommended that the Board approve the terms of the Offering relating to these matters.

The Offering Price was negotiated by the Company and Scotiabank, on behalf of itself and the other Underwriters, with such Underwriters all acting on an arm’s length basis from the Company, Pala and Castlelake. 

Potential Maximum Dilution in respect of the Offering

Pala currently owns 332,179,447 Common Shares, representing approximately 40.5% of the issued and outstanding Common Shares on a non-diluted basis. The Castlelake Funds currently own an aggregate of 136,632,313 Common Shares, representing approximately 16.7% of the issued and outstanding Common Shares on a non-diluted basis. In connection with the Offering, Pala has agreed to subscribe for 289,202,677 Units (which is approximately 27,000,000 Units less than previously disclosed in the Company’s press release on July 13, 2020 following Pala agreeing to reduce its participation due to the oversubscription of the Offering) and the Castlelake Funds have agreed to subscribe for an aggregate of 149,902,852 Units, which is approximately 35.3% and 18.3%, respectively, of the Common Shares outstanding before giving effect to the Offering. Of such amounts, the proceeds from the subscription of 180,262,677 Units by Pala and 122,714,852 Units by the Castlelake Funds will be used by the Company to repay an amount of US$19,890,688¹ to Pala (being an aggregate of US$19,684,006 in principal amount (inclusive of the US$2,400,000 arrangement fee payable to Pala in connection with the entering into of the Convertible Loan and interest of US$1,198,784, which amounts have been capitalized) and US$206,682 of accrued interest to the expected repayment date) and US$13,540,700 to the Castlelake Funds (being an aggregate of US$13,400,000 in principal amount and US$140,700 of accrued interest to the expected repayment date) being all amounts outstanding to Pala and the Castlelake Funds under the Convertible Loan. As noted in the Company’s press release on July 13, 2020, each of Pala and the Castlelake Funds have agreed to waive the applicable prepayment premium under the Convertible Loan in connection with such proposed repayment. An arm’s length third party lender previously acquired an aggregate principal amount of US$500,000 of the Convertible Loan from Pala. In connection with the Offering, this third party lender has agreed to subscribe for 5,414,024 Units. As a result, the remaining principal amount of the Convertible Loan, along with any accrued interest and fees thereunder, will also be prepaid upon the closing of the Offering.