Gunnison Copper Repays US$7.3 Million of Nebari Secured Debt, Fully Eliminating Non-Convertible Portion of Second ARCA

On December 1, 2025, Gunnison Copper announced it has fully repaid the US$7.3 million non-convertible principal portion of its Second Amended and Restated Credit Agreement (ARCA) with Nebari Natural Resources Credit Fund I LP. Following this repayment, the only remaining balance under this agreement is a US$5.25 million convertible principal amount. The company's CFO, Craig Hallworth, stated that reducing debt is a core objective and this repayment marks a major step in strengthening the company's balance sheet and financial flexibility.

The repayment of the entire US$7.3 million non-convertible portion of the Nebari debt is a material positive development. This action directly addresses a key financial risk by eliminating the part of the secured debt that required cash repayment, thereby reducing future cash interest payments and the immediate threat of default.

This move was anticipated. The company's October 30, 2025, press release, which announced the closing of a C$13.1 million private placement, explicitly listed "partial repayment of outstanding debt due to Nebari" as a primary use of proceeds. The December 1st news confirms that management has executed this plan swiftly.

While positive, the context is critical. This de-leveraging was achieved through shareholder dilution via the October financing at C$0.45 per unit. Furthermore, a significant US$5.25 million of this debt remains, now entirely in convertible form. Nebari has already demonstrated its willingness to convert, having converted US$500,000 in early October. This remaining convertible debt represents a future source of dilution.

A review of the September 30, 2025, interim financials reveals a precarious balance sheet with total liabilities of C$113.9 million far exceeding total assets of C$267.5 million, resulting in a significant negative total equity of -C$60.4 million. This is primarily driven by large derivative liabilities associated with stream agreements and a large accumulated deficit.

Therefore, while the repayment is a commendable and necessary step in cleaning up the capital structure, it does not fundamentally alter the company's high-risk financial profile. It is a step in the right direction, not the final destination. The market likely anticipated this move following the financing, so the immediate impact on the stock price may be muted. The true value lies in the reduced financial risk and management's demonstrated discipline.

Gunnison Copper is a US-based copper developer and new producer focused on its assets in the Cochise mining district in Arizona. The company has two key projects:

1. Johnson Camp Mine (JCM): A fully-permitted, past-producing open-pit heap leach mine that was restarted in 2025. It achieved first copper cathode production in August 2025 and first sales in September 2025. The restart is fully financed by Nuton LLC, a Rio Tinto venture. JCM has a nameplate capacity of 25 million pounds of copper cathode per year.
2. Gunnison Copper Project: This is the company's flagship development project. It is a large, long-life open-pit copper project currently at the Preliminary Economic Assessment (PEA) stage. The December 2024 PEA outlined an 18-year mine life with an after-tax NPV (8%) of US$1.3 billion and an IRR of 20.9% at $4.10/lb copper. The company is currently conducting "High-Value-Add" work programs to improve these economics ahead of a PFS.