Capstone Mining Corp. (Capstone) has entered into a definitive share purchase agreement with Pembridge Resources plc (Pembridge) pursuant to which it has agreed to sell its Minto mine in Yukon, Canada. Under the terms of the agreement, Capstone will receive US$37.5 million in cash, plus working capital adjustments, and common shares representing 9.9% of the issued and outstanding shares of Pembridge upon completion of the transaction.
"The divestiture of Minto will allow us to focus our resources on opportunities that will have a more meaningful impact on the long-term growth of the company," said President and CEO of Capstone, Darren Pylot.
"This agreement is consistent with our continuing efforts to deliver shareholder value by focusing on our core assets and allows us to further strengthen our balance sheet. Minto has been an important part of the development of Capstone and we are optimistic for the future of Minto under Pembridge's stewardship."
According to Capstone, the transaction is subject to closing conditions, including the requirement for Pembridge to post the required financial security with respect to the closure bonding requirements at Minto.
Capstone has agreed, for a period of one year post-closing, to retain one-third (approximately CAN$24 million) of the existing surety bond if requested by Pembridge, after which time Capstone will have no further obligation with respect to the closure of the Minto Mine.
The transaction is expected to close in 2Q18. Capstone intends to use net proceeds from the sale primarily to reduce outstanding borrowings under its revolving credit facility.
Read the article online at: https://www.globalminingreview.com/finance-business/15022018/pembridge-resources-to-take-over-minto-mine/