VANCOUVER, British Columbia,
December 15, 2017 /PRNewswire/ --
Capstone Mining Corp. ("Capstone")
(TSX: CS) has completed the sale of its Kutcho development project
to Kutcho Copper Corp. ("Kutcho Copper") (formerly Desert Star
Resources Ltd.). Under the terms of the agreement, Capstone
received C$28.8 million in cash and
4,646,892 common shares of the newly named Kutcho Copper (the "SPA
Shares") (collectively, the "Kutcho Transaction").
"The divestiture of Kutcho allows us to further strengthen our
balance sheet and focus on our core assets," said Darren Pylot, President and Chief Executive
Officer of Capstone. "We look forward to participating in the
future anticipated success of Kutcho Copper through our share
ownership."
Capstone intends to use net proceeds from the sale to reduce
outstanding borrowings under its revolving credit facility and for
general corporate purposes.
Concurrently with the closing of the Kutcho Transaction,
Capstone acquired an additional 3,076,923 Desert Star Shares
(the "Placement Shares" and, together with the SPA Shares, the
"Total Shares") and 1,538,461 Desert Star Share purchase warrants
(the "Placement Warrants") pursuant to a non-brokered private
placement (the "Private Placement") for aggregate consideration of
C$1,999,999.95. Each Placement
Warrant entitles the holder thereof to acquire, on payment of
C$1.00, one Desert Star Share at any
time during the 36-month period following closing.
Prior to these transactions, Capstone did not own or control,
directly or indirectly, any Desert Star Shares. Following the
completion of the transaction and acquisition of the Total Shares,
Capstone owns and controls, directly or indirectly, 7,723,815
Desert Star Shares, representing approximately 16.5% of the current
issued and outstanding Desert Star Shares on a non-diluted
basis.
Capstone acquired the SPA Shares as consideration for the sale
of its Kutcho development project and acquired the Placement Shares
and the Placement Warrants for investment purposes. Capstone may
from time to time acquire additional securities, dispose of some or
all of the existing or additional securities, or may continue to
hold the securities of Desert Star. Pursuant to the terms of the
Kutcho Transaction and for so long as Capstone holds at least five
percent of the issued and outstanding shares of Desert Star
("Common Shares"), Capstone is entitled to certain participation
rights in respect of any future issuance or sale of Desert Star
Shares and is also entitled to nominate a representative to the
board of directors of Desert Star.
About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian base metals mining company,
focused on copper. We are committed to the responsible development
of our assets and the environments in which we operate. Our three
producing mines are the Pinto Valley copper mine located in
Arizona, US, the Cozamin
polymetallic mine in Zacatecas State, Mexico and the Minto copper mine in Yukon, Canada. In addition, Capstone has the
large scale 70% owned copper-iron Santo
Domingo development project in Region III, Chile, in partnership with Korea Resources
Corporation, as well as exploration properties in Chile. Capstone's strategy is to focus on the
optimization of operations and assets in politically stable,
mining-friendly regions, centred in the Americas. Our headquarters
are in Vancouver, Canada and we
are listed on the Toronto Stock Exchange (TSX). Further information
is available at http://www.capstonemining.com.
Cautionary Note Regarding Forward-Looking
Information
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 Capstone 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. Forward-looking statements include, but are not
limited to, statements with respect to the Company's use of
proceeds for the sale. In certain cases, forward-looking statements
can be identified by the use of words such as "plans", "expects",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "believes" or variations of such words and phrases,
or statements that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved" or the negative of these terms or comparable terminology.
In this document certain forward-looking statements are identified
by words including "anticipate" and "intend". 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
projects, future prices of copper and other metals, changes in
general economic conditions, 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's
discussion and analysis of those statements, all of which are filed
and available for review under the Company's profile on SEDAR
at http://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.
Contact:
Cindy Burnett
VP, Investor Relations and Communications
+1-604-637-8157
cburnett@capstonemining.com