Capstone Copper Corp. (“Capstone” or the
“Company”) (TSX:CS) and Orion Fund JV Limited, Orion Mine Finance
Fund II LP and Orion Mine Finance (Master) Fund I-A LP
(collectively “Orion” or the “Selling Shareholders”) jointly
announce that they have entered into an agreement with a syndicate
of underwriters led by National Bank Financial and Scotiabank
(collectively, the “Underwriters”) under which the Underwriters
have agreed to purchase, on a bought deal basis from the Selling
Shareholders, 50,000,000 common shares of Capstone (“Common
Shares”) at a price of C$5.70 per Common Share (the “Offering
Price”), for gross proceeds to Orion of approximately C$285,000,000
(the "Secondary Offering"). Orion has granted the Underwriters an
option, exercisable in whole or in part at any time up to 30 days
after the closing of the Secondary Offering, to purchase up to an
additional 7,500,000 Common Shares at the Offering Price (the
“Over-Allotment Option”) which, if exercised in full, would
increase the gross proceeds of the Secondary Offering to Orion to
approximately C$327,750,000. The Secondary Offering is expected to
close on or about March 31, 2023 and is subject to Capstone and
Orion receiving all necessary regulatory approvals.
The net proceeds of the Secondary Offering will
be paid directly to the Selling Shareholders. The Company will not
receive any proceeds from the Secondary Offering.
The Secondary Offering will be made by way of a
prospectus supplement to the Company’s short form base shelf
prospectus dated March 1, 2023 in all of the provinces and
territories of Canada (other than Quebec) (the “Prospectus
Supplement”) and may be offered by way of private placement to
qualified institutional buyers in the United States.
As part of the Secondary Offering, Orion has
agreed, subject to certain limited exceptions, not to sell any
Common Shares or other securities of Capstone for a period of 150
days from the closing of the Secondary Offering. The Company has
also agreed, subject to certain limited exceptions, not to issue
any Common Shares or other securities of Capstone for a period of
90 days from the closing of the Secondary Offering.
The Selling Shareholders currently hold an
aggregate of 222,336,179 Common Shares, representing approximately
32.03% of the Company’s issued and outstanding Common Shares.
Following the closing of the Secondary Offering, but before giving
effect to the Over-Allotment Option, the Selling Shareholders will,
in the aggregate, beneficially own 172,336,179 Common Shares,
representing 24.83% of the outstanding Common Shares. Following the
closing of the Secondary Offering, and assuming that the
Over-Allotment Option is exercised in full, the Selling
Shareholders will, in the aggregate, beneficially own 164,836,179
Common Shares, representing 23.75% of the outstanding Common
Shares.
The securities under the Secondary Offering have
not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the “U.S. Securities Act”), or
the securities laws of any state of the United States and may not
be offered, sold or delivered, directly or indirectly, in the
United States (as such term is defined in Regulation S under the
U.S. Securities Act), except pursuant to an exemption from the
registration requirements of the U.S. Securities Act and applicable
state securities laws. This news release does not constitute an
offer to sell or solicitation of an offer to buy any of these
securities in the United States or in any jurisdiction in which the
offering or sale is not permitted.
The Prospectus Supplement will be filed on the
SEDAR website maintained by the Canadian Securities Administrators
at www.sedar.com on or before March 24, 2023.
ABOUT CAPSTONE COPPER CORP.
Capstone Copper Corp. is an Americas-focused
copper mining company headquartered in Vancouver, Canada. We own
and operate the Pinto Valley copper mine located in Arizona, USA,
the Cozamin copper-silver mine located in Zacatecas, Mexico, the
Mantos Blancos copper-silver mine located in the Antofagasta
region, Chile, and 70% of the Mantoverde copper-gold mine, located
in the Atacama region, Chile. In addition, we own the fully
permitted Santo Domingo copper-gold project, located approximately
30 kilometres northeast of Mantoverde in the Atacama region, Chile,
as well as a portfolio of exploration properties in the
Americas.
Capstone Copper’s strategy is to unlock
transformational copper production growth while executing on cost
and operational improvements through innovation, optimization and
safe and responsible production throughout our portfolio of assets.
We focus on profitability and disciplined capital allocation to
surface stakeholder value. We are committed to creating a positive
impact in the lives of our people and local communities, while
delivering compelling returns to investors by sustainably producing
copper to meet the world’s growing needs.
Contact Information
Jerrold Annett, SVP, Strategy and Capital
Markets647-273-7351jannett@capstonecopper.com Kettina Cordero,
Director Investor Relations &
Communications604-262-9794kcordero@capstonecopper.com
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
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 the Company 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 and the impacts of the ongoing and
evolving COVID-19 pandemic and the evolving geopolitical
environment. Forward-looking statements include, but are not
limited to, statements with respect to the Secondary Offering, the
exercise of the Over-Allotment Option, the timing of closing and
the number of securities held by the Selling Shareholders following
the completion of the Secondary Offering and the risks included in
our continuous disclosure filings on SEDAR at www.sedar.com. The
potential effects of the COVID-19 pandemic on our business and
operations are unknown at this time, including Capstone Copper’s
ability to manage challenges and restrictions arising from COVID-19
in the communities in which Capstone Copper operates and our
ability to continue to safely operate. The impact of COVID-19 to
Capstone Copper is dependent on a number of factors outside of our
control and knowledge, including the effectiveness of the measures
taken by public health and governmental authorities to combat the
spread of the disease, global economic uncertainties and outlook
due to the disease, supply chain delays resulting in lack of
availability of supplies, goods and equipment, and evolving
restrictions relating to mining activities and to travel in certain
jurisdictions in which we operate.
In certain cases, forward-looking statements can
be identified by the use of words such as “anticipates”,
“approximately”, “believes”, “budget”, “estimates”, expects”,
“forecasts”, “guidance”, intends”, “plans”, “scheduled”, “target”,
or variations of such words and phrases, or statements that certain
actions, events or results “be achieved”, “could”, “may”, “might”,
“occur”, “should”, “will be taken” or “would” or the negative of
these terms or comparable terminology. In this document certain
forward-looking statements are identified by words including
“anticipated”, “expected”, “guidance” and “plan”. 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
operations and closure of mining projects, future prices of copper
and other metals, compliance with financial covenants, surety
bonding, our ability to raise capital, Capstone Copper’s ability to
acquire properties for growth, counterparty risks associated with
sales of our metals, use of financial derivative instruments and
associated counterparty risks, foreign currency exchange rate
fluctuations, market access restrictions or tariffs, changes in
general economic conditions, availability and quality of water,
accuracy of Mineral Resource and Mineral Reserve estimates,
operating in foreign jurisdictions with risk of changes to
governmental regulation, compliance with governmental regulations,
compliance with environmental laws and regulations, reliance on
approvals, licences and permits from governmental authorities and
potential legal challenges to permit applications, contractual
risks including but not limited to, our ability to meet the
completion test requirements under the Cozamin Silver Stream
Agreement with Wheaton Precious Metals Corp.
(“Wheaton”), our ability to meet certain closing
conditions under the Santo Domingo Gold Stream Agreement with
Wheaton, acting as indemnitor for Minto Metals Corp.’s surety bond
obligations post divestiture, impact of climate change and changes
to climatic conditions at our operations and projects, changes in
regulatory requirements and policy related to climate change and
greenhouse gas (“GHG”) emissions, land reclamation
and mine closure obligations, aboriginal title claims and rights to
consultation and accommodation, risks relating to widespread
epidemics or pandemic outbreak including the COVID-19 pandemic; the
impact of COVID-19 on our workforce, risks related to construction
activities at our operations and development projects, suppliers
and other essential resources and what effect those impacts, if
they occur, would have on our business, including our ability to
access goods and supplies, the ability to transport our products
and impacts on employee productivity, the risks in connection with
the operations, cash flow and results of Capstone Copper relating
to the unknown duration and impact of the COVID-19 pandemic,
impacts of inflation, geopolitical events and the effects of global
supply chain disruptions, uncertainties and risks related to the
potential development of the Santo Domingo project, risks related
to the Mantos Blancos Concentrator Debottlenecking Project and the
Mantoverde Development Project, increased operating and capital
costs, increased cost of reclamation, challenges to title to our
mineral properties, increased taxes in jurisdictions the Company
operates or is subject to tax, changes in tax regimes we are
subject to and any changes in law or interpretation of law may be
difficult to react to in an efficient manner, maintaining ongoing
social licence to operate, seismicity and its effects on our
operations and communities in which we operate, dependence on key
management personnel, potential conflicts of interest involving our
directors and officers, corruption and bribery, limitations
inherent in our insurance coverage, labour relations, increasing
input costs such as those related to sulphuric acid, electricity,
fuel and supplies, increasing inflation rates, competition in the
mining industry including but not limited to competition for
skilled labour, risks associated with joint venture partners and
non-controlling shareholders or associates, our ability to
integrate new acquisitions and new technology into our operations,
cybersecurity threats, legal proceedings, the volatility of the
price of the Common Shares, the uncertainty of maintaining a liquid
trading market for the Common Shares, risks related to dilution to
existing shareholders if stock options or other convertible
securities are exercised, the history of Capstone Copper with
respect to not paying dividends and anticipation of not paying
dividends and the anticipation of not paying dividends in the
foreseeable future and sales of Common Shares by existing
shareholders can reduce trading prices, 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 discussion and analysis of those statements and annual
information form, 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.
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