Three Valley Copper (TSXV: TVC; US-OTC: TVCCF) has quickly suspended operations at its Minera Tres Valles (MTV) complicated close to town of Salamanca in Chile because of the constant underperformance of its Don Gabriel open pit mine, the corporate’s major supply of ore.
The corporate additionally halted building of the block cave at its Papomono mine, situated three km away from the Don Gabriel mine, in the identical complicated.
Michael Staresinic, the corporate’s president and CEO, informed The Northern Miner that it’d take a minimum of three to 4 months for the corporate to restart its operations.
“Ideally we’re working with our lenders and our advisors to find out a technique that’s in the very best curiosity of the undertaking,” mentioned Staresinic. This, he mentioned, may embody bridge loans, debt financing or waivers of working and different covenants.
Staresinic famous that if issues had gone in accordance with plan, the Papomono mine, which is “excessive grade, low price,” may have began working in per week. However the poor efficiency of the Don Gabriel operation, meant that the corporate didn’t have the capital to function Papomono.
“That is block caving. Consider it as an hourglass, when you flip it over, you may’t cease it. When you begin a caving operation, you need to have the sources for persevering with it, within the absence of which, we danger damaging the mine,” he mentioned.
Indicators of bother emerged in Could final 12 months when the corporate revealed its first quarterly report. In it, Staresinic said that “the ramp-up of operations” at Don Gabriel began slower than anticipated and that the corporate skilled the next proportion of waste to ore and decrease grade than anticipated.
In August, the corporate revised its steerage for 2021, lowering its anticipated copper manufacturing from 6000 to 7000 tonnes to 4,500 to five,500 tonnes. Precise manufacturing got here in at 4,209 tonnes.
In November, the corporate introduced that its lenders agreed “to not speed up or implement their rights or treatments” ought to Minera fail to make its scheduled mortgage repayments or replenish the working reserve account to re-establish the minimal required reserve.
To protect liquidity, the corporate has suspended exploration at Minera, the place greater than 100 copper outcrops have been recognized alongside with70 artisanal mining websites with geological traits like that of the Papomono and Don Gabriel orebodies, the corporate says.
Whereas the corporate has about US$7 million in working capital, it says, the quantity isn’t sufficient to “finance the anticipated funding hole” at Minera and pay for the corporate’s ongoing necessities, the corporate mentioned.
Three Valley Copper owns 95.1% of the Minera complicated. It bought an preliminary 70% stake for US$40 million from the Vecchiola Group, a household enterprise, in October 2017, and raised its stake to 95.1% in December 2021.
The information despatched Three Valley Copper’s shares plunging 78.4% or 14.5¢ to finish the day at 4¢ apiece. Over the past 12 months the corporate has traded in a variety of 16.5¢ and $1.02. Three Valley Copper has 112.1 million widespread shares excellent for a market cap of $64.4 million.