Whitehorse Daily Star

Purchaser looking to expand mine’s lifespan

Capstone Mining Corp. announced plans Wednesday to sell the Minto Mine to an upstart company, Pembridge Resources, listed on the London Stock Exchange.

By Chuck Tobin on February 15, 2018

Capstone Mining Corp. announced plans Wednesday to sell the Minto Mine to an upstart company, Pembridge Resources, listed on the London Stock Exchange.

Capstone vice-president Cindy Burnett told the Star this morning she understands Pembridge intends to continue operations as they are, with no plans to cut the existing the workforce.

Rather, Burnett emphasized, the company is looking to come in and expand the life of the copper mine, as well as pursue other opportunities.

She said Pembridge has a couple of people who are familiar with the Minto property.

Pembridge believes it can bring a new approach to the mine plan, Burnett suggested.

“They are very optimistic about the future of Minto.”

The sale will include a cash payment of US $37.5 million, plus the standard adjustments on the day of closing for assets like ore on the property that had been mined but not sold and still belongs to Capstone.

Capstone will also receive 9.9 per cent of the $50 million in shares Pembridge intends to sell initially, Capstone said in a press release.

“So we will own 10 per cent of Pembridge,” Burnett said.

The sale is scheduled to close before the end of June.

There are currently 146 Capstone employees working at the Minto Mine and another 141 contract workers. They include employees of Pelly Construction Ltd. of Whitehorse, which is responsible for the open pit mining.

The Minto Mine began producing in 2007 under Sherwood Copper Corp. Capstone purchased Sherwood to form a single company in 2008.

Capstone had planned to halt production at the Minto Mine late last year and put it into a state of care and maintenance.

As commodity prices for copper rose, it decided to continue operations and subsequently invested money preparing for further open pit mining.

It was planning to continue operations to mid-2021.

The price of copper was hovering this morning near a four-year high, trading at US$3.21 per pound.

In a press release issued by Pembridge today, company CEO David Linsley says:

“We believe Minto is an exceptional opportunity with the potential to benefit not only our shareholders but also the local and wider community for many years to come.

“We look forward to engaging with and working closely alongside the Selkirk First Nation, the various local communities, the Yukon government and the substantial workforce at the mine.”

The release goes on to say as soon as the sale closes, “Pembridge management will implement a number of strategies to seek to significantly extend the current four-year mine plan.”

The arrangement also requires Capstone to maintain one-third of the $72-million reclamation bond – $24 million – for one year after the closing date, if Pembridge asks it to.

“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,” Darren Pylot, president and CEO of Capstone, says in Wednesday’s press release.

“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.”

Burnett said Pembridge approached Capstone about the purchase of the Minto Mine a number of months ago.

Pembridge, she said, is a startup that wants to focus on mining.

“These are serious miners,” she said.

“We satisfied ourselves that they have access to significant financial backing to go through with this.... I think they are pretty excited about the future.”

Comments (6)

Up 0 Down 4

Sally Wright on Feb 20, 2018 at 2:29 pm

I want to see proof that this new outfit will start cleaning up the site immediately. The aerial picture in the paper looks like a horrible toxic mess. How has this benefited our economy exactly? I remember the jockeying that happened at the end of Faro's profitability. Now look at that billion $ nightmare. The Yukon has no fully cleaned up mine since the greedy, dirty lot showed up in 1898.

Up 5 Down 0

Groucho d'North on Feb 18, 2018 at 10:58 am

I wonder if the costs to extend the electrical grid to the mine site have been recouped yet?

Good to see some folks will get to keep their jobs a bit longer and suppliers hopefully will keep on supplying. I wish them continued success and a reliably high market price for copper and the trace minerals they sell.

Up 0 Down 8

Calf Wirter on Feb 16, 2018 at 3:04 pm

I have seen this too many times over the decades, a Donnie Trump type machine trolls up and down the water ways, sees a aging scow and offers to take it over on the cheap with no plans to change anything then it disappears like Jimmy Hoffa.

Up 7 Down 0

ProScience Greenie on Feb 16, 2018 at 10:51 am

Most likely good news. Minto has been a great deal for Yukoners and the longer the mine's life the better. We should always err on the side of a smaller stable operations with a long mine life than mega-projects that tend to be more boom/bust. Small is always better for the Yukon.

Up 1 Down 9

jc on Feb 15, 2018 at 8:58 pm

I hope the mine goes bankrupt and shuts down for good. Many of us years ago invested in it's stock and lost our shirts. Since then the company made millions on the ore and we got nothing but a kiss off. From what I heard many if not most of the employees are from outside. Good riddance Capstone. Outside of its poll tax to the FN, its done nothing for the Yukon.

Up 1 Down 9

LOL on Feb 15, 2018 at 8:52 pm

“'These are serious miners,' she said."
Uh oh. Creditors, get your cash out now.
Wonder how much longer until taxpayers are on the hook for this sites remediation?

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