What's Happening?
Capstone Copper, a mining company based in Vancouver, Canada, has reached an agreement to sell a 25% stake in its Chilean projects, Santo Domingo and Sierra Norte, to Orion Resource Partners for $360 million.
The deal includes an initial payment of $225 million upon a positive final investment decision at Santo Domingo, with an additional $75 million to follow within six months. Orion will also invest $10 million in new Capstone shares, providing financial backing for exploration activities. The agreement reduces Capstone's equity investment in the Santo Domingo project and offers Orion a buy-back option post-commercial production.
Why It's Important?
This transaction is significant for Capstone Copper as it provides substantial financial resources to support exploration and development activities in Chile. The deal reflects a strategic partnership with Orion Resource Partners, enhancing Capstone's ability to advance its projects in the Atacama region. The investment aligns with Capstone's growth trajectory in the critical minerals industry, focusing on responsible and safe production. The agreement also highlights the importance of collaboration in the mining sector to achieve long-term goals and unlock value in key projects.
What's Next?
Capstone Copper will continue to focus on the development of its Chilean projects, leveraging the financial backing from Orion Resource Partners. The company aims to advance the Santo Domingo project, which is seen as a pillar of transformational growth in the region. Capstone's management team, experienced in successful project execution, will oversee the construction and ramp-up of Santo Domingo. The partnership with Orion is expected to strengthen Capstone's position in the copper mining industry, contributing to the clean energy transition.
