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Capstone selling Minto copper mine to Pembridge Resources

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Capstone selling Minto copper mine to Pembridge Resources

Capstone Mining Corp. said Feb. 14 that it signed a definitive deal to sell its Minto copper mine in Canada's Yukon Territory to Pembridge Resources plc for US$37.5 million in cash.

The consideration will also include working capital adjustments and common Pembridge shares representing 9.9% of the company's outstanding share capital.

Capstone President and CEO Darren Pylot said, "[T]he 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." Minto went through a temporary closure in January 2016 due to low copper prices at the time.

The deal remains subject to certain conditions, including Pembridge posting the required financial security for Minto's closure bonding requirements. Related to this requirement, Capstone agreed to retain one-third of the existing surety bond, equivalent to about C$24 million, for one year after closing if requested by Pembridge. After the year, Capstone will have no further obligation over Minto's closure.

Capstone anticipates the sale to close in the second quarter and plans to use the proceeds to reduce outstanding debt under its revolving credit facility.