Capstone unveils US$150 million streaming deal with Wheaton

Capstone Mining’s Cozamin Mine in Mexico. Source: Capstone Mining Corp.

Share this article

Capstone Mining Corp. [CS-TSX] on Friday December 11 unveiled a US$150 million streaming agreement with Wheaton Precious Metals Corp. [WPM-TSX, NYSE] covering 50% of the silver production at Capstone’s Cozamin Mine in Mexico.

Under the agreement, Wheaton will make an up-front cash payment of US$150 million upon closing for 50% of the silver production until 10 million ounces has been delivered.

At that point, Capstone’s delivery commitment drops to 33% of silver production for the life of the mine.

Capstone shares advanced on the news, rising 6% or $0.12 to $2.10 on volume of 1.67 million. The shares trade in a 52-week range of $2.05 and 33 cents.

Wheaton advanced slightly, rising 0.6% or 31 cents to $52.39 on volume of 328,849. The shares are currently trading in a 52-week range of $76.69 and $26.99.

“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,” said Capstone President and CEO Darren Pylot.

“The US$150 million for 50% of Cozamin’s silver is a strong validation of the ultimate mine life potential we expect to demonstrate through further resource and reserve conversion and ongoing exploration,’” he said.

The company recently attributed its better-than-expected third quarter results to the performance of the Cozamin mine, which reported the lowest quarterly cash cost (US$0.36 per pound) in its operating history.

During the third quarter, the mine benefitted from an optimized mine plan focused on higher copper grades (1.77%), and higher throughput (3,090 tonnes per day), resulting in higher production (10.6 million pounds), higher by-product credits on strong silver prices in addition to higher silver grades (46.5 g/t) and recoveries of 79%, as well as lower cash costs from reduced operation development metres.

In the third quarter, Capstone produced 38.5 million pounds of copper at a consolidated cash cost of US$1.82 per payable pound produced.

The company’s year to date consolidated production of 112.5 million pounds of copper and consolidated cash costs of US$1.91 per pound is on track with Capstone’s full year guidance of 140-155 million pounds at cash costs of US$1.85-US$2.00 per pound.


Share this article

Leave a Reply

Your email address will not be published. Required fields are marked *

Don't miss the

NEWSLETTER

Exclusive editorial

Breaking News

Quality Company Coverage

Expert Writers

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

Resource World Magazine will use the information you provide on this form to be in touch with you and to provide updates and marketing.