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

Nevada Copper Inc. is a Vancouver-based mining company focused on the Pumpkin Hollow copper project near Yerington, Nevada, a 22,862-acre complex that combines a fully constructed underground mine with a permitted open pit. The company filed chapter 11 on June 10, 2024 in the US Bankruptcy Court for the District of Nevada after a prolonged liquidity squeeze and operational and geotechnical challenges at Pumpkin Hollow. Local reporting described the mine shutting down and said Nevada Copper laid off 117 employees out of a workforce of 195. The filing followed failed funding discussions with major shareholders Pala Investments and Mercuria Energy.

At filing the debtors obtained a 60 million DIP commitment from Elliott affiliates and structured the case around a sale process. A stalking horse agreement with Southwest Critical Materials, an affiliate of Kinterra Capital, set a purchase price of about 128 million. The transaction closed in early October 2024, with the buyer announcing completion on October 9, 2024 and Nevada Copper confirming the closing in a Newswire release. The estates then filed a chapter 11 plan of liquidation built around sale proceeds, a small general unsecured distribution pool, and a plan administrator charged with winding down remaining claims.

Field	Value
Debtor	Nevada Copper, Inc. and affiliated debtors
Court	US Bankruptcy Court for the District of Nevada
Case number	24-50566 (HLB)
Petition date	June 10, 2024
Headquarters	Vancouver, British Columbia
Primary asset	Pumpkin Hollow copper project near Yerington, Nevada
Project scale	22,862 acres with underground mine and open pit
Employees at filing	195 employees
Layoffs announced	117 employees
Estimated assets	500 million to 1 billion
Estimated liabilities	100 million to 500 million
DIP financing	60 million commitment
Stalking horse / buyer	Southwest Critical Materials (Kinterra affiliate)
Purchase price	about 128 million
Sale closing	October 2024
Plan type	Chapter 11 plan of liquidation
Claims agent	Epiq Corporate Restructuring, LLC
Major shareholders	Pala Investments (57%) and Mercuria Energy (17%)

363 Sale Process and Liquidation Plan

Restructuring posture. Nevada Copper entered chapter 11 with a sale-first strategy that relied on a debtor in possession facility to maintain the Pumpkin Hollow assets while a buyer was identified. The final DIP facility approved in the case provided up to $60 million in total commitments, split between a $20 million interim draw and a $40 million delayed draw tranche. The lenders were affiliates of Elliott Investment Management, and the DIP agent was US Bank Trust Company, National Association. The DIP order authorized use of proceeds for ongoing maintenance, payroll, professional fees, and other estate expenses, while preserving collateral value for secured creditors during the sale process.

Sale structure. The debtors proposed a structured auction process with a stalking horse bidder and court approved bid protections. Southwest Critical Materials LLC was designated as the stalking horse bidder. The bid protections included a break up fee capped at 3 percent of the purchase price and an expense reimbursement cap of $1.25 million. Qualified bids had to be irrevocable and include a cash deposit equal to 10 percent of the purchase price. The sale order later approved a transaction that transferred substantially all assets free and clear of liens, claims, and interests, subject to assumption and cure mechanics for executory contracts.

Bid timeline and notice. The bid procedures set a September 2024 bid deadline, with an auction scheduled shortly thereafter and a sale hearing in early September. The debtors also proposed publication notice in a national paper and required bidders to provide adequate assurance of future performance for any assumed contracts or leases. Those mechanics are typical in a section 363 process, but they carry extra importance in mining cases where permits, surface access, and long term service agreements can be central to asset value.

Sale economics and proceeds. The asset purchase agreement set a headline price around $128 million, with a 10 percent deposit credited against the purchase price at closing. The disclosure statement later reported that the sale closed on October 8, 2024 and generated approximately $125 million in net cash proceeds for the estates, with a portion of cash also used to satisfy assumed liabilities on behalf of the buyer. The sale closed in early October 2024 and the buyer publicly announced completion the next day, emphasizing the strategic value of the assets and the intention to restart production.

Liquidation plan. After the sale, the debtors filed an amended plan of liquidation and a solicitation disclosure statement. The plan contemplates appointment of a plan administrator selected by the debtors with consent from key parties, and it empowers the administrator to object to claims, pursue residual causes of action, and make distributions. The plan defines a General Unsecured Cash Pool of $250,000, and it projects recoveries of roughly 1.4 percent to 2.3 percent for general unsecured claims and approximately 3 percent for certain term loan claims. Equity interests are slated for cancellation. These are projected recoveries based on the disclosure statement and are not final distributions.

Key case milestones. The case timeline reflects a rapid pivot from a distressed operating mine to a court supervised sale and wind down process.

Company and Asset Overview

Business profile. Nevada Copper Inc. is a Canadian mining company based in Vancouver, British Columbia. The company focused almost entirely on the Pumpkin Hollow copper project in Nevada, which positioned the firm as a single asset operator with a capital intensive development profile. The project is located in the Walker Lane mineralized belt of western Nevada and is described as a copper gold deposit with significant scale and permitting in place.

Pumpkin Hollow footprint. The Pumpkin Hollow project spans 22,862 acres near Yerington and includes both a fully constructed underground mine and a permitted open pit. Project descriptions emphasize that Nevada Copper owned 100 percent of the property and had already built significant surface infrastructure before the bankruptcy filing. The mine is often described as a large scale project with a long reserve life, and the underground component had already achieved initial production before development stalled.

Strategic significance. Industry coverage described Pumpkin Hollow as a rare US copper development asset. One outlet noted that, when fully completed, it would have been the third largest copper mine in the United States and the first newly permitted copper mine to start production in the country since 2008. That strategic positioning elevated the asset in the context of domestic copper supply and the energy transition, even as operational challenges mounted.

Project history. The Pumpkin Hollow deposit was first discovered in 1960, and more than 180,000 meters of drilling were conducted on the property over subsequent decades. Nevada Copper acquired the property in 2005 and invested heavily in development, including permits for the open pit and construction of the underground mine. The long development arc underscores why the asset retained value for buyers even after the bankruptcy filing.

Project highlights. The core attributes of the Pumpkin Hollow asset are summarized below.

Asset mix. The project consists of both underground and open pit components, with the underground mine largely constructed and the open pit fully permitted. This combination of completed infrastructure and future optionality is central to the asset's sale value. The buyer described the asset as a large scale, permitted copper project with an underground mine already constructed, reinforcing the idea that the capital invested over more than a decade could be preserved through a strategic buyer.

Operational Challenges and the Path to Chapter 11

Operational and geotechnical issues. Nevada Copper struggled with operational and geotechnical challenges at Pumpkin Hollow, a theme highlighted in coverage of the filing. The company cited operational and geotechnical challenges and the inability to secure new financing as key factors in the decision to seek chapter 11 protection. These issues constrained production and reduced liquidity, leaving the company dependent on additional capital to complete underground development and transition to steady state output.

Funding gap and stakeholder negotiations. The company attempted to raise additional capital from its largest shareholders but was unable to secure a deal. Mining industry coverage noted that negotiations with Pala Investments and Mercuria Energy did not result in a financing solution, leaving chapter 11 as the most viable alternative. Those stakeholders held significant equity positions, which meant their financing decisions directly affected the company's ability to avoid bankruptcy.

Pre filing liquidity efforts. In early 2024 the company reported a draw on a deferred funding arrangement. A February 2024 operations update said Nevada Copper had fully drawn 25 million of debt under a deferred funding agreement with Pala and Mercuria. The update reflects the incremental funding steps the company took before its cash position deteriorated and the filing became unavoidable.

Operational wind down. By mid June 2024 local outlets reported that the mine was shutting down and that Nevada Copper expected to cease operations. The company laid off 117 employees, reducing the workforce to 78 in order to keep a smaller team focused on care and maintenance and the sale process. A related report noted impacts to local contractors and service providers, underscoring the ripple effects of the shutdown in a rural Nevada community.

Regional impact. Regional business coverage emphasized the broader economic effect of the closure on Yerington and surrounding communities, highlighting the mine's role as a local employer and customer for contractors. The same coverage described the shutdown as a meaningful blow to a regional economy that had tied a decade of development expectations to the Pumpkin Hollow project, reinforcing why a going concern sale was prioritized even amid operational distress.

Leadership transition. The filing was accompanied by leadership changes. The company announced that Randy Buffington resigned as president and chief executive, and that Tom Albanese, the former CEO of Rio Tinto, was appointed as executive chair to oversee the restructuring. Mining coverage emphasized that Albanese would lead the effort to preserve value through the sale process, highlighting the board's strategy of deploying experienced industry leadership at a critical moment.

Capital Structure, Stakeholders, and Workforce

Balance sheet ranges. Nevada Copper entered chapter 11 with balance sheet ranges that reflected a heavy leverage profile typical of late stage mining development. A financial profile of the filing listed assets between 500 million and 1 billion and liabilities between 100 million and 500 million. Those ranges underscore the magnitude of capital invested in Pumpkin Hollow and the scale of obligations that had accumulated over multiple financing rounds.

Intercompany and deficiency claims. The disclosure statement estimated large intercompany balances and deficiency claims tied to the term loan structure. Those claims compete for a limited pool of distributable cash once administrative expenses and DIP obligations are paid, which is why projected recoveries for secured and unsecured classes are low. The structure also means that recoveries for trade creditors depend more on the fixed general unsecured pool than on a percentage of total sale proceeds.

Secured debt concentration. The capital structure was heavily weighted toward secured debt tied to the project. The term loan structure produced large secured claims, and the disclosure statement projected only partial recoveries for those claims. With most value concentrated in the Pumpkin Hollow collateral package, the case hinged on maximizing sale proceeds rather than reorganizing around ongoing operations.

Equity and shareholder profile. Nevada Copper's ownership was concentrated among strategic investors. The company reported that Pala Investments held 57 percent and Mercuria Energy held 17 percent of the equity. The remaining shares were held by public investors. Those concentrations meant that any restructuring outcome would be shaped by a small set of stakeholders with both equity and debt interests, and their financing decisions became central to the restructuring narrative.

Workforce impact. The workforce declined sharply at filing. The company employed 195 people before the petition date and laid off 117 employees, leaving 78 to maintain the site and support the sale process. Local coverage noted that contractors working at the mine were also affected, signaling a broader employment impact beyond the debtor's payroll.

Sale Process Mechanics and Transaction Economics

Stalking horse and bid protections. The debtors structured the sale around a stalking horse agreement with Southwest Critical Materials LLC, an affiliate of Kinterra Capital. The bid protections order approved a break up fee of 3 percent of the purchase price and capped expense reimbursement at $1.25 million. Those protections were designed to provide a baseline price while encouraging higher or better offers through the auction process.

Bid qualifications. Bidders were required to submit a cash deposit equal to 10 percent of the purchase price, demonstrate financial capacity, and specify which assets and liabilities they would assume. The auction schedule was set with a September 2024 bid deadline and hearing, balancing the need for speed with the complexity of the asset base. The sale process also included contract assumption and cure procedures to provide counterparties with notice and ensure that any assumed agreements could be transferred to the buyer.

Purchase price and closing mechanics. The stalking horse agreement set a purchase price around 128 million and included customary adjustments for assumed liabilities and cure costs. The sale order approved the transaction and authorized transfer of assets free and clear of liens. The buyer announced closing on October 9, 2024, and Nevada Copper issued a Newswire release confirming the completion and stating that sale proceeds would be administered for creditor distributions.

Economic impact of the sale. The disclosure statement reported net sale proceeds of approximately $125 million after adjustments, a figure consistent with a headline price of $128 million and adjustments for deposits and assumed liabilities. These proceeds were designated to fund the plan of liquidation, pay administrative expenses, and support limited recoveries for secured and unsecured creditors. In practice, the sale economics show how a capital intensive mining asset can translate into only partial creditor recoveries once secured debt, DIP costs, and administrative expenses are paid.

Buyer profile and restart plans. Kinterra Capital, through its affiliate Southwest Critical Materials, positioned the acquisition as a strategic bet on domestic copper. The buyer highlighted control of a portfolio exceeding 11 billion pounds of copper across US projects and said it planned to restart production within 24 months. That restart horizon illustrates the long lead time still required to bring the asset back to sustained output even after a successful sale.

Creditor Recoveries and Plan Economics

Liquidation framework. The chapter 11 plan filed after the sale is a liquidating plan, not a reorganization. It relies on the cash proceeds generated from the asset sale and contemplates a plan administrator who will oversee claim reconciliation, pursue remaining causes of action, and distribute any available value. This structure is common in mining cases where the asset base is transferred to a new owner and the remaining estate focuses on distributions rather than ongoing operations.

General unsecured cash pool. The plan defines a General Unsecured Cash Pool of $250,000, and the disclosure statement projects recoveries of 1.4 percent to 2.3 percent for general unsecured creditors. That projection indicates a small but defined pool for trade and other unsecured claims, with the recovery range driven by estimated claim totals and administrative cost assumptions. The plan ties distributions to a defined pool rather than a percentage of total sale proceeds, a structure that provides clarity but limits upside for unsecured creditors.

Secured creditor recoveries. The disclosure statement projected roughly 3 percent recovery for certain term loan claims. Those recoveries are based on the net proceeds available after payment of administrative expenses, DIP obligations, and other senior claims. The plan does not provide for recoveries to equity holders, and existing equity interests are scheduled to be canceled as part of the liquidation.

Distribution priorities. The plan's waterfall follows standard chapter 11 priority rules: administrative and priority claims are paid first, DIP obligations are satisfied, secured claims receive partial recovery based on collateral value, and the remaining cash funds the general unsecured pool. The plan administrator is responsible for implementing this waterfall and making distributions when claims reconciliation is complete.

Industry Context: US Copper Supply and Strategic Value

Domestic supply constraints. The Pumpkin Hollow project was often framed as a rare US copper development asset. Industry coverage described it as a potential third largest copper mine in the United States and the first newly permitted copper mine to start production in the country since 2008. That rarity explains why a sale process could still attract a well capitalized buyer even after operational setbacks and bankruptcy.

Critical minerals positioning. Copper is essential to electrification, grid expansion, and energy transition infrastructure, and policy makers have emphasized domestic supply for critical minerals. The Pumpkin Hollow project sits in a region known for mineralization and was cited as a meaningful component of US copper supply. This strategic framing helped preserve asset value even as the debtor faced liquidity collapse.

Portfolio scale and capital alignment. The buyer framed the acquisition as part of a broader US critical minerals portfolio, noting control of more than 11 billion pounds of copper across multiple domestic projects. That scale matters because large investors often look for portfolio synergies, shared technical expertise, and long term capital support that individual project developers struggle to secure. The Kinterra strategy suggests the asset's value is tied not only to near term cash flow but to a longer horizon development thesis.

Project history and scale. The deposit has a long history. It was discovered in 1960 and later became the focus of extensive drilling and development work, with more than 180,000 meters of drilling conducted by US Steel and other operators. Nevada Copper acquired the property in 2005 and invested heavily in infrastructure, making it one of the more advanced copper projects in the United States before the bankruptcy filing.

Permitting and infrastructure advantages. The project includes a fully constructed underground mine and a permitted open pit. The buyer described the asset as a large scale, permitted project with significant infrastructure already in place, and the acquisition release emphasized the scale of the property and its contribution to a broader copper portfolio. Those characteristics are particularly valuable in mining, where permitting and infrastructure can take years and represent substantial sunk costs.

Local and regional impact. The mine's shutdown affected employment in a rural region of Nevada. Local coverage reported layoffs and contractor disruptions, illustrating the broader community impact of the restructuring. The planned restart by the buyer suggests that, while Nevada Copper as an entity will wind down, the Pumpkin Hollow assets may return to production under new ownership.

Frequently Asked Questions

What is Nevada Copper and what is Pumpkin Hollow?

Nevada Copper Inc. is a Vancouver based mining company focused on the Pumpkin Hollow copper project in Nevada. The asset covers a 22,862-acre complex with an underground mine and a permitted open pit. Industry coverage described Pumpkin Hollow as a potential third largest US copper mine and the first newly permitted copper mine to start production in the country since 2008.

Why did Nevada Copper file for chapter 11?

The company faced liquidity constraints after operational and geotechnical challenges at the mine and failed funding negotiations with key stakeholders. It was unable to secure additional capital from Pala Investments and Mercuria Energy, leaving chapter 11 as the path to preserve asset value through a sale process.

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

Nevada Copper filed chapter 11 on June 10, 2024 in the US Bankruptcy Court for the District of Nevada. The lead debtor is Nevada Copper, Inc., and the case is centered on the Pumpkin Hollow project in Yerington, Nevada.

What DIP financing did Nevada Copper obtain?

The debtors secured a 60 million DIP commitment from Elliott affiliates. The facility was structured with a $20 million interim draw and a $40 million delayed draw tranche and funded care and maintenance, payroll, and the sale process.

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

Southwest Critical Materials LLC, an affiliate of Kinterra Capital, was selected as the stalking horse bidder and agreed to buy substantially all assets. The agreement set a purchase price of about 128 million, with the sale closing in early October 2024 and announced on October 9, 2024.

Did the mine shut down and how were employees affected?

Local reporting described the mine shutting down and said Nevada Copper laid off 117 employees out of a workforce of 195. The company retained a smaller team to maintain the site and support the sale and wind down process.

What does the liquidation plan propose for creditors?

The amended plan of liquidation proposes to distribute sale proceeds after paying administrative expenses and DIP obligations. It establishes a $250,000 general unsecured cash pool and projects recoveries of roughly 1.4 percent to 2.3 percent for general unsecured claims, with certain secured term loan claims projected to recover about 3 percent.

Will equity holders recover anything?

The plan projects no recovery for existing equity interests. Equity is slated to be canceled under the plan, with proceeds directed to administrative, DIP, secured, and general unsecured claims.

What happens to the Pumpkin Hollow project after the sale?

Kinterra Capital, through Southwest Critical Materials, said it plans to restart production within 24 months. The new owner emphasized the scale of the asset and its role in a broader portfolio of US copper projects.

Who is the claims agent for Nevada Copper?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

For more bankruptcy case analyses and restructuring updates, visit ElevenFlo's bankruptcy blog.