Capstone raises $431M to advance Chilean copper projects

Capstone Copper (TSX: CS; ASX: CSC) and major shareholder Orion Resource Partners, have closed a $431-million bought deal to support the copper miner’s near-term growth initiatives in Chile.

Under the deal, Capstone and three Orion funds, sold a total of 68.4 million common shares of the copper developer at $6.30 per share to raise gross proceeds of $431.2 million. This includes the exercise of the underwriters’ overallotment option for 8.9 million shares.

Of the shares sold, over 56.5 million were issued by Capstone for $356.2 million, and the remaining 11.9 million were sold by Orion for approximately $75 million. 

Proceeds will be used to advance its Chilean copper developments, notably Mantoverde and Santo Domingo, as well as for future exploration programs.

Mantoverde is an open-pit mine operation located in the Atacama region capable of producing up to 40,000 tonnes of copper cathodes from processing oxide ores alone. The company currently analyzing an expansion of the newly commissioned sulphide concentrator to optimize the operation, and a feasibility study is scheduled for completion late in the second half.

The Mantoverde operation is 70% owned by Capstone and 30% by Misubishi Materials.

Santo Domingo is a fully permitted copper-iron project also located in the Atacama region. Capstone has laid out plans to integrate this project into Mantoverde to create a district-scale operation that will output 200,000 tonnes of copper as well as 4,500-6,000 tonnes of battery-grade cobalt annually.

Shares of Capstone Copper inched 1.3% higher at $6.44 apiece by noon ET, trading within a 52-week range of $4.40 and $7.25. The Vancouver-based miner has a market capitalization of $4.4 billion.