NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
VANCOUVER, British Columbia, March 22, 2023 — Capstone Copper Corp. (“Capstone” or the “Company”) (TSX:CS) and Orion Fund JV Limited, Orion Mine Finance Fund II LP and Orion Mine Finance (Master) Fund I-A LP (collectively “Orion” or the “Selling Shareholders”) jointly announce that they have entered into an agreement with a syndicate of underwriters led by National Bank Financial and Scotiabank (collectively, the “Underwriters”) under which the Underwriters have agreed to purchase, on a bought deal basis from the Selling Shareholders, 50,000,000 common shares of Capstone (“Common Shares”) at a price of C$5.70 per Common Share (the “Offering Price”), for gross proceeds to Orion of approximately C$285,000,000 (the “Secondary Offering”). Orion has granted the Underwriters an option, exercisable in whole or in part at any time up to 30 days after the closing of the Secondary Offering, to purchase up to an additional 7,500,000 Common Shares at the Offering Price (the “Over-Allotment Option”) which, if exercised in full, would increase the gross proceeds of the Secondary Offering to Orion to approximately C$327,750,000. The Secondary Offering is expected to close on or about March 31, 2023 and is subject to Capstone and Orion receiving all necessary regulatory approvals.
The net proceeds of the Secondary Offering will be paid directly to the Selling Shareholders. The Company will not receive any proceeds from the Secondary Offering.
The Secondary Offering will be made by way of a prospectus supplement to the Company’s short form base shelf prospectus dated March 1, 2023 in all of the provinces and territories of Canada (other than Quebec) (the “Prospectus Supplement”) and may be offered by way of private placement to qualified institutional buyers in the United States.
As part of the Secondary Offering, Orion has agreed, subject to certain limited exceptions, not to sell any Common Shares or other securities of Capstone for a period of 150 days from the closing of the Secondary Offering. The Company has also agreed, subject to certain limited exceptions, not to issue any Common Shares or other securities of Capstone for a period of 90 days from the closing of the Secondary Offering.
The Selling Shareholders currently hold an aggregate of 222,336,179 Common Shares, representing approximately 32.03% of the Company’s issued and outstanding Common Shares. Following the closing of the Secondary Offering, but before giving effect to the Over-Allotment Option, the Selling Shareholders will, in the aggregate, beneficially own 172,336,179 Common Shares, representing 24.83% of the outstanding Common Shares. Following the closing of the Secondary Offering, and assuming that the Over-Allotment Option is exercised in full, the Selling Shareholders will, in the aggregate, beneficially own 164,836,179 Common Shares, representing 23.75% of the outstanding Common Shares.
The securities under the Secondary Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States and may not be offered, sold or delivered, directly or indirectly, in the United States (as such term is defined in Regulation S under the U.S. Securities Act), except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or solicitation of an offer to buy any of these securities in the United States or in any jurisdiction in which the offering or sale is not permitted.
The Prospectus Supplement will be filed on the SEDAR website maintained by the Canadian Securities Administrators at www.sedar.com on or before March 24, 2023.
ABOUT CAPSTONE COPPER CORP.
Capstone Copper Corp. is an Americas-focused copper mining company headquartered in Vancouver, Canada. We own and operate the Pinto Valley copper mine located in Arizona, USA, the Cozamin copper-silver mine located in Zacatecas, Mexico, the Mantos Blancos copper-silver mine located in the Antofagasta region, Chile, and 70% of the Mantoverde copper-gold mine, located in the Atacama region, Chile. In addition, we own the fully permitted Santo Domingo copper-gold project, located approximately 30 kilometres northeast of Mantoverde in the Atacama region, Chile, as well as a portfolio of exploration properties in the Americas.
Capstone Copper’s strategy is to unlock transformational copper production growth while executing on cost and operational improvements through innovation, optimization and safe and responsible production throughout our portfolio of assets. We focus on profitability and disciplined capital allocation to surface stakeholder value. We are committed to creating a positive impact in the lives of our people and local communities, while delivering compelling returns to investors by sustainably producing copper to meet the world’s growing needs.
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