VANCOUVER, British Columbia, April 29, 2013 /PRNewswire/ --
Capstone Mining Corp. ("Capstone") (TSX: CS) today announced that it has entered into a definitive agreement with BHP Copper Inc., a subsidiary of BHP Billiton Ltd. ("BHP Billiton"), to purchase BHP Billiton's wholly-owned Pinto Valley copper mining operation and the associated San Manuel Arizona Railroad Company ("SMARRCO") in Arizona, USA for US$650 million.
The Pinto Valley Mine is located in the Globe- Miami mining district in Arizona, approximately 125 kilometres east of Phoenix. It is projected to produce 130 - 150 million pounds of copper in concentrate and approximately 10 million pounds of copper cathode annually, along with by-product molybdenum and silver, at an estimated cash cost of approximately $1.80 per pound, net of by-product credits, for the first five years of production.
"Pinto Valley represents a unique opportunity to acquire a mid-sized producing copper mine in a well-established and low-risk mining jurisdiction with a significant mineral resource," said Darren Pylot, President and CEO of Capstone. "This acquisition gives Capstone our third producing mine with a long mine life and is consistent with Capstone's strategy of building an intermediate copper producer focused in the Americas.""The purchase price and financing structure allows us to maintain our financial flexibility, retaining approximately $135 million in cash," continued Mr. Pylot. "The retained cash, combined with the immediate cash flow and low on-going capital requirements expected from Pinto Valley and our current operations, provides us with the necessary financial resources to continue to fund our development projects." "During our extensive due diligence process we were very impressed with the world-class operations and the solid workforce and management team that are in place at Pinto Valley. We are looking forward to the Pinto Valley employees joining Capstone as we jointly prepare to realize the full value of the Pinto Valley asset well into the future," concluded Mr. Pylot.