Capstone raises $265 million to advance Chilean copper projects

The Mantoverde operation in Chile is 70% owned by Capstone Copper and 30% by Misubishi Materials. Credit: Mantos Copper

Capstone Copper (TSX: CS) (ASX: CSC), alongside shareholders Orion Fund JV Ltd., Orion Mine Finance Fund II LP and Orion Mine Finance (Master) Fund I-A LP, has announced the closing of their recently arranged bought deal to support the company’s near-term growth initiatives in Chile.

Under the financing, co-led by RBC Capital Markets, National Bank Financial and Scotiabank as joint bookrunners, Capstone and the Orion funds sold a total of 68.4 million common shares of the copper developer at C$6.30 per share to raise gross proceeds of C$431.2 million ($320m). 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 C$356.2 million ($265m), and the remaining 11.9 million were sold by Orion for approximately C$75 million ($55m). Capstone did not receive any proceeds from the secondary sale of shares by Orion.

As Capstone noted in its Feb. 1 release, net proceeds of the offering will be used to advance its Chilean copper developments, notably the Mantoverde optimized project and Santo Domingo detailed engineering, 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 is currently analyzing an expansion of the newly commissioned sulphide concentrator to optimize the operation, and a feasibility study is scheduled for completion late in H1 2024.

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 C$6.44 apiece by noon ET, trading within a 52-week range of C$4.40 and C$7.25. The Vancouver-based miner has a market capitalization of C$4.4 billion ($3.3bn).