US hedge fund manager Elliott Investment Management has offered support to troubled Canadian miner Nevada Copper after the company filed for bankruptcy protection.
Before Monday’s bankruptcy filing, Nevada Copper had attracted two bidders though it failed to close a deal with either one, CFO Gregory J. Martin said in a court filing. To help pay for the Chapter 11 restructuring case, the company agreed to borrow as much as $60-million from Elliott affiliates. Elliott didn’t immediately provide comment.
While Nevada Copper said Elliott has offered to help with debtor-in-possession financing, the actual loan needs to be approved by the court. Elliott owns two-thirds of Triple Flag Precious Metals, a Canadian streaming company that invested in Nevada Copper’s operations.
Nevada Copper had been in the process of restarting mining at its Pumpkin Hollow project, but a series of operational setbacks including a build up of water underground saw costs spiral for the Vancouver-based company. Its key backers, which include Pala Investments and Mercuria Energy Group, balked at putting up more money.
The company’s collapse comes when the mining industry has never been more bullish on copper’s outlook, with the metal soaring above $11 000 a metric ton to hit a record last month. While copper prices have sharply dropped since then, many investors and mining executives see a deepening shortage of copper, a metal that’s essential in the global push to shift from fossil fuels to cleaner energy sources.