- The management information circular and related materials ( the “Meeting Materials”) have been filed by the Capstone Mining Corp. (“Capstone” or the “Company”) on SEDAR and are available under the Company’s profile at sedar.com
- For any questions please contact Capstone’s’ proxy solicitation agent and communications advisor, Laurel Hill Advisory Group, toll free at 1-877-452-7184 (+1-416-304-0211 outside North America) or email assistance@laurelhill.com.
Vancouver, British Columbia -
Capstone (TSX:CS) announced today that it has filed and mailed the Meeting
Materials for its special meeting of shareholders, optionholders,
restricted share units (“RSU”), performance share units (“PSU”) and
deferred share unit (“DSU”) holders of Capstone (collectively, the
“Securityholders”) to be held on February 28, 2022 at 10:00 A.M PT (the
“Meeting”) in connection with the proposed business combination with Mantos
Copper (Bermuda) Limited (“Mantos”), announced on November 30, 2021 (the
“Transaction”).
Transaction Details
The Transaction will be effected by way of a plan of arrangement under the Business Corporations Act (British Columbia). Upon completion of
the Transaction, the new company will be named Capstone Copper Corp.
(“Capstone Copper”) and all Capstone common shares will be exchanged for
newly issued Capstone Copper shares, based on the exchange ratio of one
common share in the capital of Mantos for each Capstone share held. The
Transaction will require the approval of: (i) 66 2/3% of Capstone's
shareholders, (ii) 66 2/3% of Capstone's shareholders and incentive award
holders voting together as a single class, and (iii) "minority approval"
(as defined in Multilateral Instrument 61-101 - Protection of Minority
Security Holders in Special Transactions) of Capstone's shareholders.
The Transaction is also subject to receipt of Competition Act
(Canada) approval, receipt of United States Hart-Scott-Rodino Antitrust Improvements Act approval, the
approval of the Mexican Federal Economic Competition Commission, approval
of the Toronto Stock Exchange, consents from certain third parties and
other customary closing conditions. The Arrangement Agreement includes a
non-solicitation provision, a right to match a superior proposal and a C$75
million termination fee payable in certain circumstances.
Officers and directors of Capstone, along with Capstone’s largest
shareholder, have entered into support and voting agreements, agreeing to
vote their shares in favour of the Transaction (representing approximately
26.5% of the issued and outstanding common shares of Capstone).
Upon completion of the Transaction, Mantos’ largest shareholder, funds
managed by Orion Resource Partners (“Orion”), will become an approximately
32% shareholder of Capstone Copper. Pursuant to a Registration and Board
Nomination Rights Agreement, Orion will have the right to nominate up to
two directors to the Capstone Copper board and has agreed to certain
restrictions on its ability to sell Capstone Copper shares for up to a one
year period following the completion of the Transaction. Upon completion of
the Transaction, the Capstone Copper board of directors is expected to be
composed of the following directors: George Brack (Lead Independent
Director), Darren Pylot (Executive Chair), John MacKenzie (CEO &
Director), Alison Baker, Bob Gallagher, Anne Giardini, and Peter Meredith.
Rationale for the Arrangement
Key strategic, financial and operational advantages for the combination
include:
-
Diversified Operating Platform in Prolific Mining Districts with
Long-Life Assets in the Americas
-
Significant Growth Potential with Robust Pipeline of Fully-permitted,
Multi-staged Growth Projects Across the Portfolio
-
Strong Financial Position and EBITDA Generation
-
A Unique Opportunity to Unlock District Scale Synergies for Mantoverde
and Santo Domingo
-
Experienced Mine Building and Operational Leadership Team Focused on
Value Creation
-
Committed to the High Standards of ESG
Information about the Meeting and Receipt of Interim Court Order
Due to the ongoing public health concerns related to the COVID-19 pandemic,
and in order to ensure the health and well-being of our Securityholders,
employees, communities and other stakeholders, the Meeting will be
conducted virtually via live audio webcast using the Lumi meeting platform
(web.lumiagm.com/404741767) on February 28, 2022 at 10:00 am (PT) .
Registered Securityholders and duly appointed proxyholders will have an
opportunity to participate, vote in real time and ask questions during the
Meeting by following the instructions set out in the Meeting Materials.
Beneficial Securityholders who have not duly appointed themselves as
proxyholders, may attend the Meeting as guests. Guests may listen but
cannot vote at the Meeting or ask questions. Securityholders should closely
review the Meeting Materials to ensure that they are able to cast their
vote and participate in the Meeting.
On January 27, 2022, Capstone obtained an interim order (the “Interim
Order”) from the Supreme Court of British Columbia (the “Court”)
authorizing the holding of the Meeting and matters relating to the conduct
of the Meeting. At the Meeting, Securityholders will be asked to consider
and, if deemed advisable, pass a special resolution (the “Arrangement
Resolution”) to approve an arrangement (the “Arrangement”), in accordance
with the terms of an arrangement agreement (the “Arrangement Agreement”)
entered into by the Company and Mantos on November 30, 2021, pursuant to
which Mantos agreed to acquire all of the issued and outstanding Capstone
common shares (“Capstone Shares”) by way of a statutory plan of arrangement
(the “Plan of Arrangement”) under section 288 of the Business Corporations Act (British Columbia).
The Meeting Materials contain important information regarding the
Transaction, how Securityholders can participate and vote at the Meeting,
the background that led to the Transaction and the reasons for the
unanimous determinations of the special committee of independent Capstone
directors (the “Special Committee”) as well as the board of directors of
the Company (the “Board”) that the Transaction is in the best interests of
the Company and is fair to Shareholders. Securityholders should carefully
review all of the Meeting Materials as they contain important information
concerning the Transaction and the rights and entitlements of
Securityholders thereunder.
The Meeting Materials have been filed by the Company on SEDAR and are
available under the Company’s profile at www.sedar.com.
Board of Directors’ Recommendation
Following the unanimous recommendation of the Special Committee, the Board
has unanimously approved the Transaction and recommend that shareholders
vote in favour of the Transaction. GenCap Mining Advisory Ltd. and CIBC
World Markets Inc. have provided fairness opinions dated November 29, 2021
to the Board and the Special Committee, respectively, stating that, as of
the date of such opinions and based upon and subject to the assumptions,
limitations and qualifications stated in such opinions, the consideration
to be received by the Capstone shareholders is fair, from a financial point
of view, to such holders.
Shareholder Questions and Voting Assistance
For any questions or assistance with voting, shareholders can contact
Laurel Hill Advisory Group at 1-877-452-7184 (toll-free in North America),
416-304-0211 (calls outside North America) or by email at assistance@laurelhill.com.
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 two producing mines are the Pinto
Valley copper mine located in Arizona, US and the Cozamin copper-silver
mine in Zacatecas State, Mexico. In addition, Capstone owns 100% of Santo
Domingo, a large scale, fully permitted, copper-iron-gold project in Region
III, Chile, as well as a portfolio of exploration properties. 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) under the symbol CS.
Further information is available at www.capstonemining.com
ABOUT MANTOS COPPER (BERMUDA) LIMITED
Mantos Copper is a copper-producing company that engages in the
exploration, development, extraction and processing of sulphide and oxide
ores and the production and sale of London Market Exchange Grade “A” copper
cathodes and clean copper concentrates, with gold and silver by-products
from two mining assets, Mantoverde and Mantos Blancos located in northern
Chile. Mantos Copper is owned by funds managed by Orion Resource Partners,
and Audley Mining Advisors Ltd. Orion is a global alternative investment
management firm that specializes in institutional metals and mining
investment strategies in the base and precious metals space. Audley Mining
Advisors is a special purpose vehicle owned by the founders of Mantos
Copper. Mantos Copper owns 99.99% of Mantos Blancos and 69.99% of
Mantoverde, with Mitsubishi Materials Corporation owning the remaining
30.00% of Mantoverde. Further information is available at www.mantoscopper.com
For further information please contact:
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 the Company 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 and the
impacts of the ongoing and evolving COVID-19 pandemic. Forward-looking
statements include, but are not limited to, statements with respect to the
estimation of Mineral Resources and Mineral Reserves, the expected success
of the underground paste backfill system study, the realization of Mineral
Reserve estimates, the timing and amount of estimated future production,
costs of production and capital expenditures, the timing and expected
results of the PV4 Study, construction at Cozamin, the Cobalt Study at
Santo Domingo and the budget for exploration at Cozamin, Santo Domingo,
Pinto Valley and other projects, the success of our mining operations, the
continuing success of mineral exploration, the estimations for potential
quantities and grade of inferred resources and exploration targets,
Capstone’s ability to fund future exploration activities, environmental
risks, unanticipated reclamation expenses and title disputes, the
consummation and timing of the Transaction, the timing for the shareholders
meeting for the Transaction and the mailing of materials. The potential
effects of the COVID-19 pandemic on our business and operations are unknown
at this time, including Capstone’s ability to manage challenges and
restrictions arising from COVID-19 in the communities in which Capstone
operates and our ability to continue to safely operate and to safely return
our business to normal operations. The impact of COVID-19 to Capstone is
dependent on a number of factors outside of our control and knowledge,
including the ,effectiveness of the measures taken by public health and
governmental authorities to combat the spread of the disease, global
economic uncertainties and outlook due to the disease, and the evolving
restrictions relating to mining activities and to travel in certain
jurisdictions in which we operate.
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 “anticipated”, “guidance”, “plan” and “expected”. 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 operations and closure
of mining projects, future prices of copper and other metals, compliance
with financial covenants, surety bonding, our ability to raise capital,
Capstone’s ability to acquire properties for growth, counterparty risks
associated with sales of our metals, use of financial derivative
instruments and associated counterparty risks, foreign currency exchange
rate fluctuations, market access restrictions or tariffs, changes in
general economic conditions, accuracy of Mineral Resource and Mineral
Reserve estimates, operating in foreign jurisdictions with risk of changes
to governmental regulation, compliance with governmental regulations,
compliance with environmental laws and regulations, reliance on approvals,
licenses and permits from governmental authorities, acting as Indemnitor
for Minto Exploration Ltd.’s surety bond obligations post divestiture,
impact of climatic conditions on our Pinto Valley and Cozamin operations,
aboriginal title claims and rights to consultation and accommodation, land
reclamation and mine closure obligations, risks relating to widespread
epidemics or pandemic outbreak including the COVID-19 pandemic; the impact
of COVID-19 on our workforce, suppliers and other essential resources and
what effect those impacts, if they occur, would have on our business,
including our ability to access goods and supplies, the ability to
transport our products and impacts on employee productivity, the risks in
connection with the operations, cash flow and results of Capstone relating
to the unknown duration and impact of the COVID-19 pandemic, uncertainties
and risks related to the potential development of the Santo Domingo
Project, including our ability to finance the Project, increased operating
and capital costs, challenges to title to our mineral properties,
maintaining ongoing social license to operate, dependence on key management
personnel, potential conflicts of interest involving our directors and
officers, corruption and bribery, limitations inherent in our insurance
coverage, labour relations, increasing energy prices, competition in the
mining industry, risks associated with joint venture partners, our ability
to integrate new acquisitions into our operations, cybersecurity threats,
legal proceedings, risks related to the consummation of the Transaction,
including failure to receive shareholder and other necessary consents and
approvals for the Transaction. As well as other risks of the mining
industry and those factors detailed from time to time in the Company’s
interim and annual financial statements and MD&A of those statements,
all of which are filed and available for review under the Company’s profile
on SEDAR at 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.