Capstone Enters $150M Streaming Agreement with Wheaton Precious Metals at Cozamin Mine, Mexico
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Capstone Mining, through a wholly-owned subsidiary, has entered into a definitive precious metals purchase agreement with Wheaton Precious Metals International. Wheaton will pay an upfront cash consideration of $150 million upon closing for 50 percent of the silver production until 10 million ounces have been delivered, thereafter dropping to 33 percent of silver production for the life of mine from the company’s Cozamin Mine in Zacatecas, Mexico.
“This deal is transformational, giving Capstone one of the lowest debt positions amongst base metal producers at a time when we are expecting significant copper production and cash flow growth. The $150 million for 50 percent of Cozamin’s silver is a strong validation of the ultimate mine life potential we expect to demonstrate through further resource to reserve conversion and ongoing exploration,” said Darren Pylot, president and CEO of Capstone.
“We are now looking to strengthen our partnership with Wheaton as we are in advanced discussions for a potential gold stream on Santo Domingo,” added Pylot.
Transaction Terms
Upfront cash consideration of $150 million to Capstone upon closing of the stream agreement, expected in January 2021. Wheaton will make ongoing payments equal to 10 percent of the spot silver price at the time of delivery for each ounce delivered to them. Capstone will deliver 50 percent of life of mine payable silver from Cozamin until 10 million ounces have been delivered, after which the stream will be reduced to 33 percent. The stream agreement is effective December 1, 2020. Closing of the transaction is subject to the completion of certain corporate matters and customary conditions.
“This is a strong endorsement from a global leader in the metals streaming sector. This will give Capstone an opportunity to get back to having a sector-leading balance sheet to fund strategic growth initiatives. By paying down debt, Capstone can now quickly build equity for shareholders moving forward,” said Jason Howe, Capstone’s SVP Corporate Development.
About Capstone Mining
Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. Their two producing mines are the Pinto Valley copper mine located in Arizona and the Cozamin copper-silver mine in Zacatecas State, Mexico. In addition, Capstone has the large scale 70 percent owned copper-iron Santo Domingo development project in Region III, Chile, in partnership with Korea Resources Corporation, as well as a portfolio of exploration properties. Capstone’s strategy is to focus on the optimization of operations and assets in politically stable, mining-friendly regions, centered in the Americas. They are committed to the responsible development of its assets and the environments in which they operate.
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