Nevada Copper has had to stop all repairs on its East South Zone at its Pumpkin Hollow mine in Nevada due to "liquidity issues", the company said.

The company is in negotiations with financing partners, including KfW IPEX-Bank and Pala Investments.

On 4 July, Nevada Copper reached an agreement with KfW and Pala Investments for a loan of up to US$70 million, provided primarily by Pala. The funds will go towards ongoing work at Pumpkin Hollow.

Of this, US$50 million will be advanced by the lenders, and the remaining US$20 million may be available for Nevada Copper to draw on an uncommitted basis.

Nevada Copper has drawn US$11.5 million under the US$20 million promissory note from Pala, and needs to make agreements with vendors and creditors before withdrawing the rest, the company said last week.

Nevada Copper has significantly reduced operational expenditures at its underground mine site. It has also in default to its mining contractor Redpath and working capital provider, and is negotiating with them on resumption of payments.

On June 7, the company informed investors that it was experiencing development delays at the Nevada mine after it identified a weak rock structure in the main ramp of the East South Zone.

The company said that additional drilling and geotechnical migration work would be necessary before mining could be resumed.

Nevada Copper has continued development of the East North mining zone, but may not be able to continue work on the ramp at the East South zone or the dike crossing.

The Pumpkin Hollow project contains open-pit mining and an underground mine. The open-pit project is fully permitted, and contains an estimated mineral resource of 5 billion pounds of copper. The underground mine contains an estimated mineral reserve of 23.9 million tonnes at 1.74% copper equivalent.