VANCOUVER - Capstone Mining Corp. ('Capstone' or the 'Company') (TSX: CS) is pleased to announce that it has entered into three separate agreements to advance Santo Domingo in Region III, Chile, as described in the Santo Domingo Project, Region III, Chile NI 43-101 Technical Report and Preliminary Economic Assessment1, to construction targeted by year-end 2021.
HIGHLIGHTS OF THREE SEPARATE TRANSACTIONS
Gold Stream Agreement with Wheaton Precious Metals for $290 Million
Capstone and Wheaton Precious Metals International Ltd. ('Wheaton') have entered into a precious metals purchase agreement for the production of gold from the Project (the 'Gold Stream Agreement'). Capstone will receive an upfront deposit of $30 million (the 'Early Deposit') and additional deposits totalling $260 million for total consideration of $290 million ('the Deposit'). The Early Deposit will be advanced on closing for the initial payment of the KORES minority interest. Wheaton will receive 100% of the gold production from the Project until 285,000 ounces have been delivered, thereafter dropping to 67% of the gold production. Wheaton will make ongoing payments equal to 18% of the spot gold price, until the Deposit has been reduced to zero, thereafter increasing to 22% of the spot gold price upon delivery.
Share Purchase Agreement to Consolidate 100% Ownership of Santo Domingo
Capstone has entered into a Share Purchase Agreement (the 'SPA') with Korea Chile Mining Corporation, a wholly owned subsidiary of Korea Resources Corporation (collectively, 'KORES') to purchase KORES' 30% ownership interest in Santo Domingo for $120 million in three cash payments over the next four years including an initial payment of $30 million. The SPA enables consolidation of 100% ownership in Santo Domingo which provides greater flexibility to Capstone's strategic process in securing a partner.
Santo Domingo Port Framework Agreement - Puerto Ventanas to Design, Build, Operate & Finance
Capstone has entered into a framework agreement with Puerto Abierto S.A., a wholly owned subsidiary of Puerto Ventanas S.A. (subsidiary of Sigdo Koppers S.A., collectively 'Puerto Ventanas' or 'PVSA'), under which Puerto Ventanas assumes responsibility for financing, constructing and operating the proposed port component of the Santo Domingo project. This represents approximately $250 million of the initial capital identified in the most recent NI 43-101 Technical Report. Discussions with Sigdo Kopper's rail business 'FEPASA' are ongoing and present an opportunity for a further $150 million reduction in Santo Domingo project capital costs by replacing the iron pipeline and related port infrastructure with a rail option.
'The gold stream and port agreements are key steps in our reduced capital strategy which aims to decrease the capital required by a target of $700 million. The consolidation of 100% ownership of the project allows Capstone to efficiently engage in discussions with potential strategic partners,' said Darren Pylot, President and CEO of Capstone, 'KORES is a large shareholder and they believe the company is at the forefront of significant copper growth.'
Jason Howe, Capstone's SVP Corporate Development stated, 'this is another strong technical and financial endorsement from Wheaton and speaks to the potential of this fully permitted project in Chile. The Port deal is a partnership with a leading port services company whose track record is internationally recognized.'
ABOUT CAPSTONE MINING CORP.
Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. 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. We are committed to the responsible development of our assets and the environments in which we operate. Our headquarters are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This news release, and the documents incorporated by reference herein, contains '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 Capstone Mining Corp. ('Capstone' or 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. Forward-looking statements include, but are not limited to, Capstone's ability to satisfy the conditions of closing the Gold Stream Agreement and complete required corporate matters, Capstone's ability to complete the required agreements contemplated in the Framework Agreement with Puerto Ventanas, Capstone and Puerto Ventanas' ability to finance the construction of the Port, Capstone's ability to finance the Santo Domingo Project, the successful completion of our strategic process for the Santo Domingo Project, statements with respect to the estimation of Mineral Resources and Mineral Reserves, the realization of Mineral Reserve estimates, the timing and amount of estimated capital costs for the construction of Santo Domingo Project, the estimation of the capital cost reductions contemplated as a result of the Port Agreement the estimation of future production, costs of production, the estimation of time to production for the Santo Domingo Project, the timing and possible outcome of legal proceedings and regulatory actions, and capital expenditures, the success of our mining operations, environmental risks, unanticipated reclamation expenses and title disputes. In certain cases, forward-looking statements can be identified by the use of words such as 'aims', 'plans', 'contemplated' 'expects', 'aiming', 'approximately', 'guidance', 'scheduled', 'target', 'estimates', 'forecasts', 'extends', 'convert', 'potential', 'intends', 'anticipates', 'believes' or variations of such words and phrases, or statements that certain actions, events or results 'may', 'could', 'should', 'would', 'will', 'might' or 'will be taken', 'occur' or 'be achieved' or the negative of these terms or comparable terminology.
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, permitting risks related to the Santo Domingo Port and other permits required for the Santo Domingo Project our ability to finance the Santo Domingo Project, our ability to find a strategic partner for the Santo Domingo Project, risk related to compliance with our covenants under our RCF, risks related to inherent hazards associated with mining operations and closure of mining projects, the inherent uncertainty of mineral exploration and estimations of exploration targets, 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, foreign currency exchange rate fluctuations, 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, licences and permits from governmental authorities, changes in governmental tax legislation or interpretation thereof, impact of climatic conditions on our operations, aboriginal title claims, land reclamation and mine closure obligations, uncertainties and risks related to the potential development of the Santo Domingo Project, increased constructions costs, 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, and other risks of the mining industry as well as 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.
Contact:
Jerrold Annett
Tel: 647-273-7351
Email: jannett@capstonemining.com
CAPSTONE MINING 
