Capstone Copper Secures C$375 Million (USD 281.25 Million) in Funding Through Public Offering
Capstone Copper and Orion Fund, along with Orion Mine Finance Fund II LP and Orion Mine Finance (Master) Fund I-A LP, have announced a significant financial deal involving the sale of 59,520,000 common shares at a price of C$6.30 (USD 4.725) each, totaling C$374,976,000 (USD 281,232,000) in gross proceeds. This deal, orchestrated by a syndicate of underwriters led by RBC Capital Markets and including National Bank Financial and Scotiabank, is set to close on or about February 8, 2024, pending the satisfaction of customary closing conditions and regulatory approvals.
The arrangement also offers an over-allotment option, allowing the underwriters to purchase up to an additional 8,928,000 common shares within 30 days post-closing, potentially raising the total gross proceeds to C$431,222,400 (USD 323,416,800). Of the total shares sold, Capstone will issue 47,620,000 shares for C$300,006,000 (USD 225,004,500), while the remaining shares will be sold by Orion, contributing C$74,970,000 (USD 56,227,500) to the selling shareholders.
Capstone intends to allocate the net proceeds from this offering to further its growth initiatives in Chile, including the advancement of the Mantoverde Optimized Project and the detailed engineering of Santo Domingo. Funds will also support expansionary exploration programs and bolster the company's general corporate and working capital, enhancing its balance sheet flexibility. The selling shareholders, on the other hand, will directly receive the proceeds from the secondary sale of shares, with no funds from this portion of the offering going to Capstone.
The offering will be executed through a prospectus supplement to Capstone's short form base shelf prospectus dated March 1, 2023, and is targeted at qualified institutional buyers in the United States under Rule 144A of the U.S. Securities Act, as well as in certain jurisdictions outside Canada and the United States where exemptions from prospectus and registration requirements apply.
In alignment with the offering, Orion has agreed not to sell any Capstone common shares or other securities for 90 days following the close of the offering, with Capstone also agreeing to a similar 90-day restriction on issuing any additional common shares or securities.
Before the offering, the selling shareholders held approximately 23.7% of Capstone's issued and outstanding common shares. Post-offering, and before the exercise of the over-allotment option, their collective stake will reduce to 20.6%, and potentially to 20.3% if the over-allotment option is fully exercised.
