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Capstone Mining Sells Minto Mine For Up To USD 20 Million

Mining News - Published on Thu, 06 Jun 2019

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Capstone Mining Corp announced it has entered into a definitive share purchase agreement to sell its 100% interest in the Minto mine to Pembridge Resources PLC. Under the terms of the Agreement, Capstone will receive up to USD 20 million in cash, in staged payments. The Transaction closed simultaneously with the signing of the Agreement and is effective immediately. Mr Darren Pylot, President & CEO of Capstone, said that "The sale of the Minto mine is very good news all around. Capstone will no longer incur the expense of having the mine on care and maintenance, and the recommencement of operations will be positive for Minto employees, contractors and the local economy. Completing Minto's divestiture allows Capstone's management to focus on our core operations, which includes completing the strategic process for Santo Domingo."

The Transaction requires Pembridge to pay Capstone as follows:

USD 5 million within 60 days of reaching commercial production

USD 5 million within 90 days, following two consecutive quarters of commercial production in which the average London Metals Exchange Cash Copper Bid Price is greater than USD 3.00 per pound within the three years following commercial production

USD 10 million, within 90 days following two consecutive quarters of commercial production in which the Average LME Price is greater than USD 3.50 per pound within the three years following commercial production.

As a result of the Transaction, Capstone will derecognize an approximate USD 24 million asset retirement obligation in its financial statements this quarter; and will recognize an accounting charge of approximately USD 20 million to USD 30 million due primarily to the reversal of non-cash, cumulative translation adjustments related to foreign exchange at Minto which currently reside in equity. In conjunction with closing, Pembridge has posted a surety bond to cover potential future reclamation liabilities.

Source :

Posted By : Rabi Wangkhem on Thu, 06 Jun 2019
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