Capstone Copper shares lift on Santa Domingo stake sale
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More news: Capstone Copper rallied after agreeing to sell a 25% stake in its Santo Domingo copper-iron-gold project in Chile to funds managed by Orion Resource Partners.
Shares in the copper producer were up 3.8% to $14.52 at 1:35pm AEDT as the mining sectoral index climbed 2.1%.
Capstone Copper to sell up to $552m stake in Santa Domingo mine to Orion Resource Partners
The news: Capstone Copper has announced it has agreed to sell a 25% stake in its Santo Domingo copper-iron-gold project in Chile to funds managed by investment firm Orion Resource Partners for a cash consideration of up to USD360 million ($552.4 million).
The numbers: Orion will pay USD225 million when the Santo Domingo Project reaches a positive final investment decision (FID). A further USD75 million matching contribution is payable within six months of FID and up to USD60 million in contingent cash consideration at the achievement of certain value enhancing milestones.
Capstone and Orion have also entered an equity subscription agreement in which Orion will buy USD10 million worth of Capstone shares, subject to Toronto Stock Exchange approval, at a 5% premium to the five-day volume weighted average price prior to announcement.
Capstone Copper's last close price on the ASX was $13.99. It was CAD12.71 on the Toronto exchange.
The context: The Santo Domingo project deal includes an option for Capstone to buy-back Orion’s 25% equity stake once commercial production is achieved.
Meanwhile, proceeds from the subscription will fund a new exploration program at Santo Domingo and Sierra Norte in Chile.
The source: ASX
