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6/28/18

Nevada Copper (NCU.to): The raising of the dead

The news today that Nevada Copper (NCU.to) is raising $80m by selling 133.3m shares at 60c apiece is mere confirmation that this stock is stone dead as a reasonable equity to play the copper market. Killed by Pala, Red Kite and Orion when they restructured the company last year (in order to get some of their own deep bagholder money out), this deal is for suckers only because no matter how high copper might fly in the months to come, this stock price isn't going anywhere.

Anuhow, here's the term sheet. Notice how many houses will be phoning their "special clients" in order to grab their slice of the $1.6m commish. TY UG.


Transaction Summary
  • Lead Mgrs: National 27.5%; BMO 22.5%; RBC/Scotiabank 10% each
  • Co-Mgrs: Numis 15%; TD 10%; Haywood 5%
  • Issuer: Nevada Copper Corp. (“Nevada Copper” or the “Company”).
  • Offering: Marketed treasury offering of 133,333,333 common shares (the “Common Shares”) (the “Offering”).
  • Offering Price: C$0.60 per Common Share.
  • Issue Amount: Approximately C$80 million.
  • Over-Allotment Option: The Company has granted the Underwriters an option, exercisable, in whole or in part, at any time until and including 30 days following the closing of the Offering, to purchase up to an additional 15.0% of the Offering at the Offering Price to cover over-allotments, if any.
  • Use of Proceeds: The net proceeds of the Offering will be used to complete construction of the underground mine, fund development of the open pit project, for exploration programs and for general corporate and working capital purposes.
  • Form of Offering: Marketed public offering by way of a prospectus supplement to the Company’s short form base shelf prospectus dated June 13, 2018 filed in all provinces of Canada, except Québec. U.S. sales to “qualified institutional buyers” by private placement pursuant to the exemption from registration provided by Rule 144A under the U.S. Securities Act.
  • Form of Underwriting: Underwritten deal pursuant to an underwriting agreement containing “disaster out”, “regulatory out”, “litigation out” and “material adverse change out” clauses running to Closing.
  • Eligibility: Eligible for RRSPs, RRIFs, RESPs, TFSAs, RDSPs and DPSPs.
  • Selling Concession: $0.012 per Common Share.
  • Comment: This is a marketed deal for common shares at $0.60.  The shares are being marketed at a discount of 14.3% vs the last reference price of C$0.70 (as of June 27 close).