Capstone Mining Reaches Agreement to Sell Minto Mine(01:53 Hrs. IST)
VANCOUVER, British Columbia, February 14, 2018 /PRNewswire/ --
Capstone Mining Corp. ("Capstone" or the "Company") (TSX: CS) has entered into a definitive share purchase agreement (the "Agreement") pursuant to which it has agreed to sell its Minto Mine to Pembridge Resources plc ("Pembridge") (LON: PERE) (the "Transaction"). Under the terms of the Agreement, Capstone will receive US$37.5 million in cash, plus working capital adjustments, and common shares representing 9.9% of the issued and outstanding shares of Pembridge upon completion of the Transaction.
"The divestiture of Minto will allow us to focus our resources on opportunities that will have a more meaningful impact on the long-term growth of the company," said Darren Pylot, President and Chief Executive Officer of Capstone. "This agreement is consistent with our continuing efforts to deliver shareholder value by focusing on our core assets and allows us to further strengthen our balance sheet. Minto has been an important part of the development of Capstone and we are optimistic for the future of Minto under Pembridge's stewardship."
The Transaction is subject to closing conditions, including the requirement for Pembridge to post the required financial security with respect to the closure bonding requirements at Minto. Capstone has agreed, for a period of one year post-closing, to retain one-third (approximately Cdn$24 million) of the existing surety bond if requested by Pembridge, after which time Capstone will have no further obligation with respect to the closure of the Minto Mine.
The Transaction is expected to close in the second quarter of 2018. Capstone intends to use net proceeds from the sale primarily to reduce outstanding borrowings under its revolving credit facility.
About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. We are committed to the responsible development of our assets and the environments in which we operate. Our three producing mines are the Pinto Valley copper mine located in Arizona, US, the Cozamin polymetallic mine in Zacatecas State, Mexico and the Minto copper mine in Yukon, Canada. In addition, Capstone has the large scale 70% owned copper-iron Santo Domingo development project in Region III, Chile, in partnership with Korea Resources Corporation, as well as exploration properties in Chile. Capstone's strategy is to focus on the optimization of operations and assets in politically stable, mining-friendly regions, centred in the Americas. Our headquarters are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX). Further information is available at www.capstonemining.com.
Cautionary Note Regarding Forward-Looking Information
This document may contain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this document and Capstone does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation.
Forward-looking statements relate to future events or future performance and reflect our expectations or beliefs regarding future events. Forward-looking statements include, but are not limited to, statements with respect to the ability of Pembridge to raise the necessary financing to complete the Transaction, the completion of the closing conditions, the Company's use of proceeds for the sale and Capstone's ability to find and transact on alternate opportunities. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes" or variations of such words and phrases, or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. In this document certain forward-looking statements are identified by words including "subject", "expected" and "intend". By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, amongst others, risks related to inherent hazards associated with mining projects, future prices of copper and other metals, changes in general economic conditions, and other risks of the mining industry as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review under the Company's profile on SEDAR at www.sedar.com . Although the Company has attempted to identify important factors that could cause our actual results, performance or achievements to differ materially from those described in our forward-looking statements, there may be other factors that cause our results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that our forward-looking statements will prove to be accurate, as our actual results, performance or achievements could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on our forward-looking statements.
Cindy Burnett, VP, Investor Relations and Communications, 604-637-8157, firstname.lastname@example.org