- Payment of February 2, 2010 hedge settlement balance
- Company receives new notice from Nedbank regarding failure to make
payment due on March 2, 2010
- Nord expects to make full payment of the amount owed during the grace
period that ends March 23, 2010
- Nord expects to achieve positive operating cash flow in second
TUCSON, AZ, March 4 /CNW/ - Nord Resources Corporation (TSX:NRD/OTCBB:NRDS.OB), which is ramping up copper mining and processing operations at the Johnson Camp Mine in Arizona, announced today that it has paid the balance of $374,895 that was owing on the $674,895 payment due on February 2, 2010 under the company's Copper Hedge Agreement with Nedbank Capital Limited. All currency amounts are in U.S. dollars.
Nord also announced that it received a new notice from Nedbank, similar to the prior one, concerning the company's failure to make the full payment of $513,474 that was due on March 2, 2010 under the Copper Hedge Agreement. Under the agreement, Nord has until March 23, 2010 to make the full payment, failing which an Event of Default would occur. An Event of Default under the Copper Hedge Agreement, if any, would trigger a cross-default under the $25 million secured loan facility with Nedbank, which is secured by the real and personal property of Johnson Camp Mine. In that case, Nedbank would be in a position to pursue any and all remedies under the Copper Hedge Agreement and the Secured Loan Agreement.
"As with the February payment, we fully expect to make the March payment required within the grace period," said Randy Davenport, the company's interim Chief Executive Officer.
"As we have previously indicated, Nord continues to make substantial progress ramping up copper production, but the rate of increase has been slower than expected and this has affected our operating cash flow," Mr. Davenport said. "As our production increases and the price of copper has remained stable or has increased, our operating cash flow is increasing. We expect to be able to achieve positive operating cash flow in the 2010 second quarter."
As previously announced, Nord received an exemption from certain shareholder approval requirements under the rules of the Toronto Stock Exchange (TSX) in connection with Nord's $12 million private placement completed in November 2009, on the basis of financial hardship. Reliance on this exemption automatically triggered a TSX de-listing review to confirm that Nord continues to meet the TSX listing requirements. On February 23, 2010, the company announced that the TSX has determined to defer its de-listing decision until no later than March 25, 2010. While Nord believes that it continues to comply with such requirements, it is unclear what impact Nedbank Capital's notice regarding the overdue March 2, 2010 payment will have on the de-listing review.
About Nord Resources
Nord Resources Corporation is a copper mining company whose primary asset is the Johnson Camp Mine, located approximately 65 miles east of Tucson, Arizona. Nord commenced mining new ore on February 1, 2009. For further information, please visit our website at www.nordresources.com.
All statements in this news release, other than those of historical facts, may be considered "forward-looking", including statements regarding our company's expectation that we will be able to pay the balance of the overdue payment under the Copper Hedge Agreement within the 20-day grace period from operating cash flow, copper production targets at the Johnson Camp Mine, our belief that we will continue to comply with TSX listing requirements, and our expectation that we will be able to achieve positive operating cash flow in the 2010 second quarter. Our expectation that we will be able to pay the balance of the overdue payment under the Copper Hedge Agreement within the 20-day curative period, and our expectation that we will be able to achieve positive operating cash flow in the 2010 second quarter, are based primarily on our assumption that our copper production levels will continue to rise as predicted, given the measures that we have taken to address the problems we have encountered in our mining and processing operations, and on our assumption that current input costs and copper prices will remain constant over the relevant period.
Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, the market price of copper, general economic, market, and business conditions, ability to reach full production rates, statements or information with respect to known or unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. In addition, Nord's business and operations are subject to the risks set forth in Nord's most recent Form 10-K, Form 10-Q, and other SEC filings which are available through EDGAR at www.sec.gov, and in Nord's prospectus and other filings with the British Columbia and Ontario Securities Commissions, which are available through SEDAR at www.sedar.com. Nord assumes no obligation to update the forward-looking statements except as may be required by law.
SOURCE Nord Resources Corporation
For further information: For further information: Wayne Morrison, Chief Financial Officer, Nord Resources Corporation, (520) 292-0266, www.nordresources.com; Investor and Media Relations, Richard Wertheim, Wertheim + Company Inc., (416) 594-1600 ext. 223, or (416) 518-8479 (cell), or by email at email@example.com