(Bloomberg) -- Nevada Copper Corp., a miner backed by Pala Investments and Mercuria Energy Group Ltd., has filed for bankruptcy protection, even as prices of the metal sit near the highest on record.

Nevada Copper had been in the process of restarting mining at its Pumpkin Hollow project, but a series of operational setbacks, including a build up of water underground, saw costs spiral. Its key backers balked at putting up more funds.

The collapse comes at a time when the mining industry has never been more bullish about the outlook for copper. The metal hit a record above $11,100 a ton last month and — while some of those gains have been portrayed as frothy speculation — many investors and mining executives see a deepening shortage of copper, which is essential for the decarbonization of the global economy.

Despite this year’s 15% gain in metal prices, Nevada Copper has demonstrated the challenges of developing new mines on a thin balance sheet. The company — worth more than $500 million at its peak — said Monday that it filed for Chapter 11 bankruptcy in Nevada. 

The company has been in talks with its shareholders in recent months to raise more funds and had also been looking to sell itself. Still, it said those efforts had been futile. 

“Those discussions have failed to result in obtaining such funding or other transaction, and the company has been unable to secure additional interim funding from its key stakeholders,” Nevada Copper said in a statement. “As a result, the company is unable to continue carrying on business.”

Pala, a commodities investment fund, holds a 57% stake in Nevada Copper, while commodity trader Mercuria owns 17%, according to data compiled by Bloomberg. 

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