Capstone Copper Corp. (OTC:CSCCF) and Orion Mine Finance have brokered a financial deal, arranging a bought deal worth $375 million Canadian dollars with a syndicate of underwriters led by RBC Capital Markets.

The deal is expected to close on Feb. 8, 2024, subject to customary closing conditions and regulatory approvals.

“This marks an exciting time for Capstone. Mantoverde Development Project (MVDP) is transformational for our business and provides the base for incredible growth in the Mantoverde-Santo Domingo District,” said Capstone CEO John MacKenzie.

As part of the offering, Capstone Copper will issue 47,620,000 common shares at CA$6.30 each, generating gross proceeds of CA$300,006,000. Capstone will use net proceeds to advance near-term growth initiatives in Chile, specifically focusing on the MVDP project and Santo Domingo detailed engineering.

If successful, the MVDP project could increase copper production by over 40% while reducing unit operating costs — a positive catalyst for the industry which grapples with potential copper shortages among growing supply and mine closures in the region.

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The selling shareholders will receive gross proceeds of CA$74,970,000 from the secondary sale of 11,900,000 common shares. Orion has agreed, subject to limited exceptions, not to sell any common shares or other securities of Capstone for 90 days from the closing of the offering. Capstone, likewise, has agreed not to issue any common shares or other securities for the same period.

Additionally, the underwriters have the option to purchase up to 8.93 million shares at any time for 30 days after the offering closes. Exercising the option would raise the gross proceeds to a total of CA$431 million.

Capstone Copper, headquartered in Vancouver, Canada, focuses on copper mining in the Americas. The company operates several mines, including the Pinto Valley copper mine in Arizona, the Cozamin copper-silver mine in Zacatecas, Mexico, and the Mantos Blancos copper-silver mine in Chile. Additionally, Capstone holds a 70% interest in the Santo Domingo copper-iron-gold project, further enhancing its portfolio in the region.

The offering, subject to regulatory approvals, represents a strategic move by Capstone to fortify its position in the copper mining sector, particularly in Chile, a key region for its operations.

Photo: Shutterstock

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