Pumpkin Hollow under new ownership
Kinterra Capital Corp. affiliate Southwest Critical Materials LLC is the new owner of the Pumpkin Hollow copper mine near Yerington now that the company has acquired the mine from Nevada Copper Corp., and Southwest Critical Minerals is on site, according to its new website.
"The team is currently working (with company management) on the post-acquisition integration," Kinterra spokeswoman Sneha Satish said in a Nov. 1 email, stating that the company will have more details later.
Nevada Copper announced on Oct. 9 that the sale to Kinterra had been completed for $128 million.
Nevada Copper shut down underground mining at Pumpkin Hollow and filed for Chapter 11 bankruptcy in June, laying off 117 workers at that time and canceling Small Mine Development's underground mining contract, affecting roughly 75 contract miners.
Another 78 employees were temporarily kept on at that time as the operation went into care and maintenance status after running low on money.
Although Kinterra wasn't ready to provide information on a restart of the copper mine and potential employee numbers, the company's co-managing partner, Cheryl Brandon, told Reuters on Oct. 29 that the mine is essentially a restart, and there is the potential for an open pit operation later.
"We see long-term value in the open pit project. And once we do the institutional work and develop project financing for it, we think major mining companies will be interested in buying the project from us," Kamal Toor, co-managing partner at Kinterra Capital told Reuters.
According to Nevada Copper before the sale was final, the asset purchase agreement was executed as a stalking horse bid in a sale process that met U.S. bankruptcy code, and the U.S. Bankruptcy Court in Reno approved the sale on Sept. 27. Kinterra's Southwest Critical Materials was the stalking horse.
The Superior Court of Justice of Ontario granted an order recognizing the sale of Pumpkin Hollow to Kinterra Capital's affiliate on Oct. 2, according to Nevada Copper's Oct. 9 announcement.
Nevada Copper stated that the proceeds from the sale to Kinterra were expected to be administered and distributed to certain creditors, subject to court approval, in the company's bankruptcy process, but there won't be enough money for payments to shareholders.
Toronto-based Kinterra is a private equity firm specializing in developing critical materials and strategic infrastructure for the energy transition, and with the acquisition of Pumpkin Hollow, Kinterra stated that it now controls more than 11 million pounds of copper across its portfolio or projects in the United States.
"This acquisition aligns with Kinterra's focus on investing in upstream energy transition minerals and infrastructure assets where there are strategic opportunities to take advantage of significant value dislocation," said Brandon said in the company's Oct. 9 announcement on the acquisition.
"Our ability to execute on complex transaction structures in a nimble and effective manner, all within a technically complex sector, differentiates our team and permits us to capitalize on high-value opportunities like Pumpkin Hollow," she said.
"Critical materials and related infrastructure are the foundation of the energy transition, and we are excited to add another excellent upstream asset to our portfolio, which prioritizes investments in stable jurisdictions," Toor said.
"Our relationships, technical know-how and experience have created a transactional flywheel that we will continue to leverage to opportunistically unlock value in a space that has historically suffered from structural underinvestment," he said on Oct. 9.
Kinterra said in the announcement that it will leverage its technical expertise and operational excellence to advance the multiple assets within the 22,862-acre Pumpkin Hollow package, aligning the projects with its sustainability standards and key stakeholder interests.
Nevada Copper's Pumpkin Hollow operations were up and down over the years as the company dealt with a shortage of funds, the impact of COVID-19, and underground challenges that included dewatering problems. The company acquired the property in 2006.
The mine was shut down in April 2020 for a few months, and again suspended mining in July 2022 due to operational and technical issues. The mine ramped up again in late 2023 and the mill restarted in October 2023, but there were repeated shutdowns due to production bottlenecks.
Earlier, low copper prices stalled shaft sinking in 2012 as efforts to obtain financing failed.
Before the bankruptcy filing Nevada Copper planned to process 5,000 tons of ore a day through the mill, and the company estimated that the mine had a 17-year mine life without additional exploration success.
The copper concentrate was trucked to a transloading facility on USA Parkway, at the industrial development off Interstate 80 about 50 miles from Pumpkin Hollow. The copper concentrate then went by rail to the coast and from there to a refinery overseas, according to the March Mining the West magazine.
