Orion Secures 25% Stake in Capstone’s Key Copper Projects for $360M

Strategic Partnership Deepens

Capstone Copper Corp. has announced a significant strategic partnership with Orion Resource Partners LP, whereby Orion will acquire a 25% ownership interest in Capstone’s flagship Santo Domingo and Sierra Norte copper projects. The deal, valued at up to US$360 million, marks a major milestone in Capstone’s development plans and reflects growing investor confidence in the projects’ potential.

The transaction is structured around a conditional investment framework. Orion’s initial commitment of US$225 million will be payable upon a positive final investment decision (FID) for Santo Domingo, followed by a matching contribution of US$75 million within six months. These payments collectively form the US$300 million initial investment, which will fund the next phase of project development.

Contingent Payments and Milestones

Beyond the initial investment, Orion has agreed to provide up to US$60 million in contingent consideration, payable in increments of US$20 million upon the achievement of key technical and permitting milestones. These include the publication of a technical report confirming substantial copper reserves at Sierra Norte, feasibility studies demonstrating oxide copper processing capabilities, and the incorporation of a cobalt processing circuit with associated permits.

This milestone-based payment structure aligns Orion’s investment with tangible project progress, mitigating risk while incentivizing Capstone to advance critical development stages efficiently.

Equity Injection and Ownership Dynamics

Concurrently with the transaction, Orion subscribed for common shares in Capstone through a private placement valued at US$10 million, at a premium to the recent trading price. This move increases Orion’s stake in Capstone and signals a strong vote of confidence in the company’s broader strategy.

Prior to this deal, Orion already held an 11.9% interest in Capstone, making this a related party transaction approved by Capstone’s board. Importantly, Capstone retains a buyback option allowing it to repurchase Orion’s 25% interest after commercial production begins, providing flexibility to reconsolidate ownership and potentially boost copper output under Capstone’s control.

Looking Ahead

The transaction’s closing was contingent on a positive FID, underscoring the importance of forthcoming project evaluations. The injection of capital and strategic partnership with Orion positions Capstone to advance Santo Domingo and Sierra Norte towards production, while balancing risk through milestone-linked payments and shared capital contributions.

Market watchers will be keen to monitor the timing of the FID, the progress of technical studies, and how this partnership influences Capstone’s operational and financial trajectory in the competitive copper mining sector.