Nevada Copper: $128M 363 Sale of Pumpkin Hollow and Liquidation Plan

The U.S. Bankruptcy Court for the District of Nevada confirmed Nevada Copper's amended chapter 11 plan of liquidation on April 18, 2025; the plan became effective on May 5, 2025, closing a sale-first case that left shareholders with no recovery. The plan distributed the proceeds of an approximately $128 million section 363 sale of the Pumpkin Hollow copper project to Southwest Critical Materials LLC, an affiliate of Kinterra Capital, which closed on October 8, 2024.

Nevada Copper, Inc. and five affiliated debtors filed chapter 11 on June 10, 2024 under lead case number 24-50566, before Judge Hilary L. Barnes. The Vancouver-headquartered miner entered bankruptcy after geotechnical problems shut underground mining, a 2023 milling restart faltered, and financing talks with controlling shareholders Pala Investments and Mercuria Energy failed to produce a rescue. The mine shut down and the company laid off 117 of 195 employees around the petition date, retaining the rest for care and maintenance and the sale.

Debtor	Nevada Copper, Inc. (6 jointly administered entities)
Court	U.S. Bankruptcy Court, District of Nevada
Case Number	24-50566
Petition Date	June 10, 2024
Judge	Hon. Hilary L. Barnes
Primary asset	Pumpkin Hollow copper project, Yerington, Nevada
Funded debt at filing	Approximately $505.8 million
DIP financing	$60 million commitment (Elliott affiliates)
Stalking horse / buyer	Southwest Critical Materials LLC (Kinterra affiliate)
Purchase price	Approximately $128 million
Sale closing	October 8, 2024
Plan type	Chapter 11 plan of liquidation
Confirmation Date	April 18, 2025
Effective Date	May 5, 2025
Claims agent	Epiq Corporate Restructuring, LLC
Major shareholders	Pala Investments (57%), Mercuria Energy (17%)

Open the public case profile for docket context, hearings, advisors, and plan updates.

Geotechnical Setbacks and the Failed Pala-Mercuria Rescue

A familiar sequence of operating failures. The First Day Declaration of Gregory J. Martin ties the filing to a chain of operating problems: geotechnical problems in 2022 forced a temporary halt to underground mining, which cut off the debtors' primary income source; milling restart efforts in 2023 were undermined by commissioning and filter-press issues; and an out-of-court sale process launched in late 2023 failed to produce a definitive rescue transaction before liquidity ran out. The debtors described the chapter 11 cases as a value-preservation bridge to a court-supervised sale while Pumpkin Hollow remained on care and maintenance.

The $25 million deferred draw and the financing gap. A February 8, 2024 operations update reported that Nevada Copper had fully drawn $25 million under a deferred funding agreement with Pala and Mercuria. The company sought additional capital from the two strategic investors — Pala held 57 percent and Mercuria 17 percent of the equity — but the parties did not reach a financing solution, leaving chapter 11 as the path to preserve value through a sale.

The Pumpkin Hollow asset. Pumpkin Hollow is a 22,862-acre copper project in the Walker Lane belt near Yerington, Nevada. Nevada Copper owned 100 percent of the property, held a fully constructed underground mine, and carried permits for an open pit. The deposit was discovered in 1960, and more than 180,000 meters of drilling were conducted over subsequent decades. Industry coverage described the project as a potential third-largest U.S. copper mine and the first newly permitted U.S. copper mine to begin production since 2008.

Site shutdown, layoffs, and leadership change. By mid-June 2024, the mine was shutting down and Nevada Copper expected to cease operations. The company laid off 117 of its 195 employees, retaining a reduced crew for 24/7 care and maintenance, safety, dewatering, and the sale process, with related impacts on local contractors around Yerington. Randy Buffington resigned as president and chief executive, and Tom Albanese, the former chief executive of Rio Tinto, was appointed executive chair to oversee the restructuring.

Capital Structure and the Pala-Mercuria Debt Stack

The First Day Declaration put total funded debt at roughly $505.8 million as of the petition date, split between about $279.2 million of secured debt and about $226.6 million of unsecured funded debt. The declaration identified four principal secured buckets: roughly $188 million under the second amended and restated credit agreement held by Pala, Triple Flag, Mercuria, and related parties; roughly $3 million under the Concord advance payment facility; roughly $78.2 million tied to Triple Flag stream agreement deposits; and roughly $10 million under Pala's third amended and restated loan facility.

On the unsecured side, the same declaration described about $78.3 million of unsecured loans owed to Pala and Mercuria and about $148.3 million of intercompany loans owed to the parent, Nevada Copper Corp., a Toronto Stock Exchange-listed company. Equity was concentrated in the two strategic investors, with Pala holding 57 percent and Mercuria 17 percent.

The amended disclosure statement later broke out the post-sale secured stack more specifically, including KfW term loans, the Canada working capital facility, Triple Flag streaming obligations, and junior secured claims, while explaining that sale proceeds were not sufficient to pay the secured debt in full.

DIP Financing and Post-Sale Cash Collateral

The Final DIP Order authorized a $60 million senior secured debtor-in-possession facility from affiliates of Elliott Investment Management, split into a $20 million initial term loan and a $40 million delayed-draw term loan, with U.S. Bank Trust Company, National Association as DIP agent. The $20 million initial draw was approved under the Interim DIP Order on June 14, 2024, with proceeds available for working capital, bankruptcy costs, adequate protection, and the carve-out. The final order granted priming liens and superpriority claims to the DIP lenders, subject to the carve-out, and provided adequate protection to the prepetition senior secured term loan parties, the working-capital purchaser, the Triple Flag stream purchaser, and the junior secured term loan parties.

After the sale closed, the case shifted from operating DIP financing to disputes over retained sale proceeds. A November 2024 cash-collateral stipulation treated certain retained proceeds as cash collateral, authorized a $46 million adequate-protection payment to the prepetition senior secured term loan agent, and reserved estate funds for professional fees and other retained obligations. The March 2025 second cash-collateral motion sought authority to make a second adequate-protection payment of about $4.43 million, maintain a $250,000 general unsecured cash pool, and preserve a $631,000 wind-down amount for remaining case administration.

363 Sale to Southwest Critical Materials

Bidding procedures and bid protections. The debtors filed their sale motion on June 20, 2024, seeking bidding procedures, stalking-horse protections, and contract-assumption procedures with Southwest Critical Materials LLC, an affiliate of Kinterra Capital, as stalking horse. The court entered the bidding procedures order on July 22, 2024, approving break-up and expense-reimbursement protections. The process set a September 6, 2024 bid deadline, required a 10 percent good-faith deposit for qualified bids, and contemplated a section 363 closing no later than 120 days after the petition date.

Sale order and closing. The sale order entered on September 27, 2024 approved transfer of substantially all assets free and clear of liens, claims, and interests. The court found that the stalking-horse agreement was the only qualified bid, so no auction occurred, and the order approved assumption-and-assignment mechanics for designated executory contracts and leases after cure-objection procedures ran their course. The sale closed on October 8, 2024 and generated approximately $125.46 million of defined sale proceeds, plus a separate $2.52 million received on account of inventory sold outside the main proceeds definition. Kinterra publicly announced completion on October 9, 2024, and Nevada Copper issued a release confirming the closing.

Buyer plans. Southwest Critical Materials said it controls a portfolio exceeding 11 billion pounds of copper across U.S. projects and stated it planned to restart production within 24 months.

Liquidating Plan and Creditor Recoveries

The estates filed an amended plan of liquidation and solicitation disclosure statement on February 18, 2025, and the court conditionally approved the disclosure statement on February 20, 2025. The plan provides for appointment of a plan administrator, selected by the debtors with the consent of key parties, who is empowered to object to claims, pursue residual causes of action, and make distributions.

The amended disclosure statement describes a liquidation plan with twelve classes subdivided by debtor. Other senior secured claims, other priority claims, and mechanic's and materialman's lien claims were treated as unimpaired and paid in cash or from a lien reserve. The impaired classes sit below that level, with most junior layers projected to recover nothing.

Claim class	Treatment	Projected recovery
Administrative and priority claims	Paid in full in cash	100%
DIP claims	Paid in full in cash	100%
Tranche A/B term loan claims	Paid from distributable cash	~3%
Tranche A-2 term loan claims	Paid from distributable cash	0%
Triple Flag stream claims	Residual	0%
Junior term loan and other junior lien claims	Residual	0%
General unsecured claims (NCU / NCI)	Paid from $250,000 pool	~1.4–2.3%
General unsecured claims (other debtors)	Residual	0%
Intercompany claims	Residual	0%
Equity interests	Canceled	0%

The debtors emphasized that waiver and restructuring steps by supporting parties removed more than $200 million from the balance sheet, but the plan still left shareholders out of the money on the debtors' valuation and waterfall.

Key professionals. Allen Overy Shearman Sterling US LLP, led by Fredric Sosnick, served as the debtors' lead restructuring counsel, with McDonald Carano LLP as Nevada counsel. The debtors retained AlixPartners, LLP as financial advisor and Moelis & Company LLC as investment banker, with Torys LLP as Canadian counsel for the parent's parallel CCAA recognition proceeding in Ontario. Lowenstein Sandler LLP was selected as counsel to the official committee of unsecured creditors, and Epiq Corporate Restructuring, LLC served as claims and noticing agent.

Shareholder Objections and Plan Confirmation

The sale process drew objections and reservations of rights from the United States Trustee, Trisura, CIGNA, RAM Enterprise, and other contract counterparties. The U.S. Trustee separately opposed a $5.3 million employee bonus plan, citing insufficient information to justify the proposed payments.

By plan solicitation, the central merits fight came from shareholders Changrun Lu and Yamei Yan. The debtors' notice of shareholder objections records their arguments that the amended liquidation plan failed the best-interests test, violated the absolute-priority rule, discriminated unfairly by excluding shareholders from the $250,000 pool, and suffered from notice and due-process defects. The objectors also asserted that the debtors had sold the assets for about $128 million without supplying enough valuation support to show that equity was truly out of the money.

The court held a combined disclosure statement and confirmation hearing on April 17, 2025 and confirmed the amended liquidation plan on April 18, 2025, with existing equity canceled. The plan became effective on May 5, 2025, at which point all existing interests in Nevada Copper were eliminated and the plan administrator was authorized to proceed with distributions and wind-down.

Key Timeline

Date	Milestone
June 10, 2024	Chapter 11 petitions filed; DIP financing sought
June 14, 2024	Interim DIP order entered
June 20, 2024	Sale motion and bidding procedures filed
July 15, 2024	Final DIP and cash collateral order entered
July 22, 2024	Bidding procedures order entered
September 16, 2024	Bar date order entered; general bar date set for October 15, 2024
September 27, 2024	Sale order entered approving asset sale
October 8, 2024	Sale to Southwest Critical Materials closed
November 2024	First post-sale cash-collateral stipulation; $46 million adequate-protection payment
February 18, 2025	Amended plan of liquidation and disclosure statement filed
February 20, 2025	Disclosure statement conditionally approved
April 17, 2025	Combined disclosure statement and confirmation hearing
April 18, 2025	Plan of liquidation confirmed
May 5, 2025	Plan of liquidation became effective; all existing equity interests eliminated

Frequently Asked Questions

Why did Nevada Copper file for chapter 11?

The company faced a liquidity shortfall after geotechnical and operational problems halted underground mining and a 2023 milling restart faltered, and it was unable to reach a financing agreement with Pala Investments and Mercuria Energy. The chapter 11 case was structured around a sale of substantially all assets.

When did Nevada Copper file and where is the case pending?

Nevada Copper filed chapter 11 on June 10, 2024 in the U.S. Bankruptcy Court for the District of Nevada under lead case number 24-50566, before Judge Hilary L. Barnes.

What DIP financing did Nevada Copper obtain?

The debtors obtained a $60 million DIP commitment from affiliates of Elliott Investment Management, structured as a $20 million initial draw and a $40 million delayed-draw tranche, with U.S. Bank Trust Company, National Association as agent.

Who bought Nevada Copper's assets and for how much?

Southwest Critical Materials LLC, an affiliate of Kinterra Capital, acquired substantially all assets at a purchase price of about $128 million. It was the only qualified bid, so no auction was held, and the sale closed on October 8, 2024.

What does the liquidation plan provide for creditors?

The confirmed plan establishes a $250,000 general unsecured cash pool projecting recoveries of about 1.4 to 2.3 percent for those general unsecured claims and about 3 percent for Tranche A/B term loan claims. Administrative, priority, and DIP claims are paid in full from sale proceeds, and existing equity was canceled with no recovery.

Who is the claims agent and what was the bar date?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The bar date order set a general claims bar date of October 15, 2024 and a governmental bar date of December 9, 2024.

For related ElevenFlo coverage of extractive-industry restructurings and liquidating plans, see Patriot Coal's second chapter 11 and sale to Blackhawk Mining, Blackjewel's chapter 11 coal liquidation, and Alpine Summit Energy Partners' liquidating plan after asset sales.