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Nevada Copper Corp. shareholders are poised to lose their entire investment, with the struggling Canadian miner seeking bankruptcy protection, and hoping to secure emergency financing from U.S. hedge fund Elliott Investment Management.
The Vancouver-based company has struggled for years to ramp up production at its Pumpkin Hollow copper mine in Nevada. Earlier this year, the company told investors it was a going-concern risk and was running a dangerously high debt load against a dwindling cash position. As of the end of March, Nevada Copper held only US$300,000 in cash, had a working-capital deficit of US$115.4-million, and total debt of approximately US$262-million.
On Monday, the company’s U.S. subsidiary filed for Chapter 11 bankruptcy protection in a Nevada court. Randy Buffington also resigned as chief executive officer at that time, while former Rio Tinto PLC CEO Tom Albanese took over as chairman. Mr. Albanese was already the lead independent director and an investor in Nevada Copper before his appointment. According to Refinitiv, he is the company’s fifth-biggest shareholder.
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