Mr. Randy Buffington reports

NEVADA COPPER PROVIDES UPDATE ON RESTART ACTIVITIES AT PUMPKIN HOLLOW AND THE PROPOSED RESTART FINANCING PACKAGE

Nevada Copper Corp. has provided an update on planned restart activities at its Pumpkin Hollow underground copper mine and developments with respect to the proposed financing package that was previously announced in the company's news release dated Aug. 25, 2022. The financing is expected to provide up to $93-million (U.S.) of liquidity to the company to support the restart and ramp-up of the underground mine.

Randy Buffington, president and chief executive officer, commented: "These past few weeks, the team has been focused on ensuring that we are prepared for the restart of underground operations. We have made significant progress in developing the plans, recruiting the people and implementing the systems necessary to derisk the restart. We have attracted several key technical positions and built the initial underground team to be able to execute on the first critical projects, primarily the remaining two dike crossings required to access the [East North zone]. We believe that taking a careful, phased approach to restarting the mine removes some of the bottlenecks the operation has faced in the past and will facilitate a rapid ramp-up to nameplate capacity once the mill restarts in mid-2023. We are looking forward to completing the capital projects and bringing the underground mine up to full operations so that we can turn our attention to development of the large open-pit project. I continue to appreciate the ongoing commitment and support of our team and key stakeholders as we work diligently to close this financing and get back to operations."

Operations and mine planning activities update

As previously announced, the company has advanced planning for the restart of operations at its underground mine. The company engaged a third party consulting firm, John Wood Group PLC, to complete a mine plan focusing on accessing the larger, higher-grade stopes in the East North zone. The mine plan has been completed with an optimized stoping sequence that brings value forward in the life of mine, and derisks the restart by advancing development activities and building significant underground inventory ahead of restarting the mill in mid-2023. Included in the mine plan are updated operating costs, which are not expected to be materially different from previous estimates as they have not been significantly impacted by inflationary pressures.

The restart plan, as envisaged, will be executed in three phases following the closing of the restart financing package:

• Phase 1: completion of the remaining two dike crossings and certain capital projects and work force development;
• Phase 2: underground stope and inventory development;
• Phase 3: stope mining and mill start-up.

In September, the company entered phase 1 by reinitiating development activities with one mining crew focused on completing the second dike crossing. It is anticipated that the crossing will be completed and well advanced beyond the geological dike feature within the next 30 days, at which time the crew will move onto the third and final dike crossing. In addition, the company is preparing to issue bid packages to interested development contractors to perform underground development activities and for completion of the remaining capital projects, including: (i) coarse ore bin 2; (ii) vent shaft stripping and surface fans installation; and (iii) Geho dewatering system.

In early 2023, the company plans to begin rapid development with the use of a development contractor to advance into the higher-grade stopes of the EN zone and build significant underground ore inventory. The company will continue to recruit additional underground personnel to prepare for stope mining in the second quarter of 2023. With a significant stockpile of ore on surface and underground inventory expected to be built up, the mill is planned to start up in the third quarter of 2023.

Restart financing package update

As disclosed in the prior announcement, the key components of the restart financing package are as follows:

• Equity investments ($40-million (U.S.)): Pala Investments Ltd., the company's largest shareholder, and Mercuria Energy, a significant shareholder of the company, are each expected to provide $20-million (U.S.) in exchange for common shares of the company. Pala has already advanced $13.5-million (U.S.) of such financing to the company.
• Stream and royalty financing ($30-million (U.S.)): Triple Flag Precious Metals Corp. is expected to increase its existing net smelter return royalty on the company's open-pit project from 0.7 per cent to 2 per cent for a purchase price of approximately $26.2-million (U.S.), subject to a full buyback of the increased royalty percentage. In addition, Triple Flag is expected to accelerate the approximately $3.8-million (U.S.) remaining to be financed under the company's existing metal purchase and sale agreement with Triple Flag.
• KfW IPEX-Bank GmbH facility extension ($15-million (U.S.) committed): The company's senior credit facility with KfW is expected to be amended to provide for a new tranche of up to $25-million (U.S.), of which Pala, Triple Flag and Mercuria would commit the first $15-million (U.S.) as a backstop.
• Deferrals under senior project facility and working capital facility (expected to be at least $8-million (U.S.)): KfW is expected to defer three interest payments under the KfW facility. Concord Resources Ltd. is expected to defer interest and principal payments under the company's working capital facility.

Under the restart financing package, Pala is expected to consolidate approximately $73-million (U.S.) of the indebtedness currently owing to Pala by the company into an amended or new debt instrument, which indebtedness would be convertible into common shares.

Please see the prior announcement for additional details regarding the restart financing package.

Nevada Copper reminds shareholders that the terms of the restart financing package are currently non-binding, and closing is subject to, among other things, finalization of the specific terms thereof, negotiation and execution of definitive documentation, and the satisfaction of various regulatory requirements. The company and its key financing partners intend to enter into definitive documents in respect of, and close, the restart financing package concurrently on or about Oct. 5, 2022. The closing of the restart financing package will be subject to the approval of the Toronto Stock Exchange.

As disclosed in the prior announcement, there can be no assurance that binding agreements will be entered into or completed (or the required regulatory approvals obtained) on terms satisfactory to the company and within the required time frame or at all. In addition, there can be no assurance that the company will be able to raise the further financing to supplement the restart financing package that will be required to complete the restart and ramp-up process. The company expects the costs of the restart and ramp-up process to be in the range of $70-million (U.S.) to $75-million (U.S.). In addition, the company needs to satisfy and/or defer various outstanding vendor payables. Together, these costs and payables are expected to exceed the amount of the restart financing package. As a result, the company continues to evaluate other additional financing options, including a public offering.

The company intends to use the available proceeds from the restart financing package of approximately $71.5-million (U.S.) (representing the $93-million (U.S.) of liquidity less $13.5-million (U.S.) already advanced by Pala and less $8-million (U.S.) in deferrals under the KfW facility and the company's working capital facility) to finance ramp-up costs (approximately $15.7-million (U.S.) to finance capital expenditures and approximately $29.1-million (U.S.) to finance operating costs), vendor payments (approximately $23.5-million (U.S.)) and general corporate purposes, such as overhead (approximately $3.2-million (U.S.)).

If the restart financing package is not completed, absent other financing, the company will not be able to continue carrying on business in the ordinary course and may need to pursue proceedings for creditor protection. The company's creditors may also seek to commence enforcement action, including realizing on their security over the company's assets.

Potential maximum dilution in respect of the restart financing package

Pala currently owns 167,759,110 common shares, representing approximately 37 per cent of the outstanding common shares on a non-diluted basis. Mercuria currently owns 48.7 million common shares, representing approximately 11 per cent of the outstanding common shares on a non-diluted basis.

Pala is expected to finance its equity investment of $20-million (U.S.) by the cancellation of approximately $13.5-million (U.S.) in short-term debt advanced to the company by Pala as interim financing and by the payment of approximately $6.5-million (U.S.) on the closing date. The Pala equity investment will be at a subscription price equal to a 15-per-cent discount to the five-day volume-weighted average price of the common shares on the Toronto Stock Exchange as of the trading day prior to the closing date. By way of illustration, if the closing of the Pala equity investment occurred on Sept. 23, 2022, 120,088,496 common shares would be issued to Pala using a 15-per-cent discount to the five-day VWAP of 26.6 Canadian cents and then converting such VWAP into U.S. dollars using the Bank of Canada exchange rate on Sept. 23, 2022, of $1 (Canadian) equals 73.69 U.S. cents. In addition, approximately $1,665,000 (U.S.) of guarantee and other fees will be satisfied by the issuance of common shares to Pala at the equity subscription price. Based on the illustrative equity subscription price, this will result in an additional 9,999,655 common shares being issued to Pala. The transactions described in this paragraph, together with the Pala debt instrument, are referred to as the Pala equity investment herein.

Mercuria is expected to finance its equity investment of $20-million (U.S.) in two tranches. The first tranche of $10-million (U.S.) will be paid on the closing date. The second tranche of $10-million (U.S.) will be deposited into escrow on the closing date and will be released upon the satisfaction or waiver of certain conditions. These conditions include the completion of certain steps in the ramp-up process that the company expects to achieve before the end of 2022. The first tranche of the Mercuria equity investment will be at a subscription price equal to the equity subscription price. The second tranche of the Mercuria equity investment will be at a subscription price equal to a 15-per-cent discount to the five-day VWAP of the common shares on the TSX as of the trading day prior to the applicable date of closing. By way of illustration, if the closing of both tranches of the Mercuria equity investment occurred today, 120,088,496 common shares would be issued to Mercuria using the illustrative equity subscription price.

In connection with the Mercuria equity investment, Mercuria is expected to receive common share purchase warrants of the company. Each warrant will entitle Mercuria to, subject to satisfying certain vesting conditions, acquire one common share at an exercise price equal to a 20-per-cent premium to the equity subscription price. The warrants will vest, from time to time, in conjunction with the conversion of the Pala debt instrument, thereby providing Mercuria with an ability to maintain its pro rata shareholding interest. The vesting of 50 per cent of the warrants will also be subject to the vesting condition that the second tranche of the Mercuria equity investment has closed. The warrants will expire upon maturity of the Pala debt instrument. By way of illustration, if all warrants vested and were exercised today, 119,205,651 common shares would be issued to Mercuria assuming the illustrated conversion of the Pala debt instrument described below. The transactions described in the foregoing two paragraphs are referred to as the Mercuria equity investment herein.

Pala is expected to consolidate approximately $73-million (U.S.) of the indebtedness currently owing to Pala by the company into the Pala debt instrument. The loans outstanding to be consolidated into the Pala debt instrument would include: (i) the total of approximately $53-million (U.S.) outstanding under the existing credit agreement entered into by Pala and the company in November, 2021; and (ii) $20-million (U.S.) that was advanced to the company under a promissory note in June and July, 2022. In connection with the entering of the Pala debt instrument, a 4-per-cent fee on the $20-million (U.S.) amount referred to above will be payable to Pala and capitalized as additional principal under the Pala debt instrument. Amounts owing under the Pala debt instrument would be convertible into common shares, at Pala's option, at a conversion price equal to a 20-per-cent premium to the equity subscription price. By way of illustration, if all amounts owing under the Pala debt instrument were converted today, 374,402,808 common shares would be issued to Pala using a 20-per-cent premium to the illustrative equity subscription price.

Based on the above illustrations, the number of common shares that will be issued as a result of the equity investments is set out in the attached table, assuming the conversion in full of the Pala debt instrument and the exercise in full of the warrants.

The total number of common shares to be issued pursuant to the equity investments (excluding conversion of the Pala debt instrument and exercise of the warrants) is 250,176,647, which represent approximately 56 per cent relative to the number of common shares currently issued and outstanding. The total number of common shares to be issued pursuant to the equity investments (including conversion of the Pala debt instrument and exercise of the warrants) is 743,785,105, which represent approximately 166 per cent relative to the number of common shares currently issued and outstanding.

TSX financial hardship exemption

Nevada Copper has applied to the Toronto Stock Exchange, pursuant to the provisions of Section 604(e) of the TSX company manual, for a financial hardship exemption from the requirements to obtain shareholder approval of components of the restart financing package on the basis that, absent the restart financing package, the company is in serious financial difficulty due to the lack of available cash and financing resources. Moreover, the company is currently in default under its various credit facilities and the company's metal purchase and sale agreement with Triple Flag. The restart financing package, including the equity investments, is designed to improve the company's financial situation. The entry into of each of the definitive agreements required in respect of the restart financing package will occur concurrently. The application was approved by the special committee (as defined below), which has determined that the transactions discussed herein are reasonable for Nevada Copper in the circumstances. Under the policies of the TSX, on the basis that the restart financing package was determined to be subject to the provisions of Section 607 of the TSX company manual for private placements, components of the restart financing package would have required shareholder approval by the company due to: (a) the number of common shares (including the common shares issuable upon the conversion of the Pala debt instrument and upon exercise of the warrants) issuable in connection with the restart financing package is in excess of 25 per cent of the number of common shares outstanding; (b) the number of common shares to be issued to insiders (assuming conversion of the Pala debt instrument and exercise warrants) is greater than 10 per cent of the number of common shares outstanding; and (c) the consideration (being the equity investments) to be received by insiders is greater than 10 per cent of the company's market capitalization. The restart financing package will not materially affect control of the company given Pala's existing level of ownership in the company.

The board of directors of the company has formed a special committee consisting of members of the board who are independent of Pala, Mercuria and management of the company to consider the proposed terms of the restart financing package, including the terms of the equity investments. The special committee has met continuously throughout the negotiation of the proposed terms of the restart financing package.

Nevada Copper expects that as a consequence of its financial hardship application, the TSX will conduct a remedial delisting review of the company. Although Nevada Copper believes that it will be in compliance with all continued listing requirements of the TSX upon the closing of the restart financing package, no assurance can be provided as to the outcome of such review or continued qualification for listing on the TSX. There can be no assurance that the TSX will accept the application for the use of the financial hardship exemption from the requirement to obtain shareholder approval described above.

The equity investments will be related-party transactions of the company for purposes of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions), and are subject to the formal valuation and minority approval requirements thereof unless an exemption is available. It is the intention of the company to rely on the financial hardship exemption provided for in sections 5.5(g) and 5.7(e) of MI 61-101.

Qualified person

The technical information and data in this news release have been reviewed by Steven Newman, registered member -- SME, vice-president, technical services, for Nevada Copper, who is a non-independent qualified person within the meaning of National Instrument 43-101.

About Nevada Copper Corp.

Nevada Copper (TSX: NCU) is a copper producer and owner of the Pumpkin Hollow copper project. Located in Nevada, United States, Pumpkin Hollow has substantial reserves and resources, including copper, gold and silver. Its two fully permitted projects include the high-grade underground mine and processing facility, which is now in the production stage, and a large-scale open-pit project, which is advancing toward feasibility status.

We seek Safe Harbor.