Three Valley Copper Suspends Mining Operations and Provides Strategic Review Update - Seite 2

        Operating Guidance

The Company is now retracting its revised preliminary operating outlook for 2022 and 2023.

The Company’s revised operating guidance for 2021 was to produce between 4,500 and 5,500 tonnes of copper cathodes. Actual production for 2021 was slightly lower than guidance at 4,209 tonnes which represents less than 25% of MTV’s overall copper cathode production capacity.

To further preserve liquidity, MTV has also temporarily suspended its exploration program, and suspended certain sustaining and expansion capital expenditures. Notwithstanding these actions, based on MTV’s current cash flow forecast, MTV will require additional financing in the next several months. Three Valley Copper currently maintains working capital of approximately US$7 million separate from MTV but this is not sufficient to finance the expected funding gap at MTV and fund the Company’s ongoing corporate requirements. Three Valley Copper is reviewing its alternatives while preserving its cash resources.

The cessation of mining activities at MTV may result in one or more events of default under the amended and restated senior secured lending facility. The Company and MTV are currently in discussions with MTV’s senior secured lenders and copper cathode offtake provider to determine if a continuing successful partnership can be maintained through, inter alia, bridge loan financing, additional debt financing, forgiveness or conversion of debt, waivers of operating and other covenants, deferrals of or renegotiation of repayment terms and/or renegotiation of the fixed price portion of the offtake agreement. The Company and MTV are also exploring MTV’s ability to renegotiate the Judicial Reorganization Agreement (“JRA”) executed in August 2020. At this time there can be no assurance that any agreement can be reached with the senior secured lenders and/or offtake provider or that a renegotiation of the JRA is possible, and the Company will continue to report on the progress of such discussions.

Strategic Review Process

The Strategic Review Process has not yet resulted in any binding offers being received by the Company. Discussions remain ongoing but there can be no assurance that such discussions will result in any type of transaction, what the value of any transaction might be, what the terms or timing of such a transaction might be or that the Company will be able to continue as a going concern if no transaction is concluded.