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Capstone Mining Corp
Symbol CS
Shares Issued 400,446,553
Close 2020-09-15 C$ 1.39
Market Cap C$ 556,620,709
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Capstone, Puerto Abierto sign MOU on Santo Domingo

2020-09-16 07:02 ET - News Release

Mr. Darren Pylot reports

CAPSTONE ENTERS INTO MOU WITH PUERTO VENTANAS S.A. FOR RAIL AND PORT FACILITIES AT SANTO DOMINGO

Capstone Mining Corp.'s 70-per-cent-owned subsidiary, Minera Santo Domingo (MSD), has entered into a memorandum of understanding (MOU) with Puerto Abierto SA (PASA), a wholly owned subsidiary of Puerto Ventanas SA (subsidiary of Sigdo Koppers SA), for Capstone's Santo Domingo project in Region III, Chile. During a 90-day period, both MSD and PASA will together explore mutual synergies and regional benefits for the proposed port component of the Santo Domingo project, Puerto Santo Domingo. The port is fully permitted and located 100 kilometres from the Santo Domingo project site. It will be one of only two cape-size vessel ports in the region, making it an attractive site for bulk shipments and a key asset allowing for broad resource development in Region III of Chile.

MOU details

MSD will allow PASA to study, at its own cost, during a term of 90 days, the project engineering and conduct a market study. PASA is looking to potentially acquire, construct, operate and maintain the deepwater port, including financing its development. Once in operation, Santo Domingo will receive preferred service as its volumes will represent a baseload of business for the port. The MOU also gives PASA 90 days to evaluate the replacement of the 110 km magnetite concentrate pipeline with a railway as part of its rail business, Ferrocarril del Pacifico SA (FEPASA). The Santo Domingo project infrastructure that is under consideration in this MOU represents approximately $400-million of the capex identified in the most recent National Instrument 43-101 technical report and includes:

  • Marine works including pier;
  • Iron concentrate pipeline from Santo Domingo mine to port;
  • Magnetite filter plant and stockpile building;
  • Copper storage building;
  • Ship loading and support facilities.

"Over the past three months we have seen a surge in interest in our fully permitted Santo Domingo project," said Darren Pylot, president and chief executive officer of Capstone. "I believe this relationship with Puerto Ventanas will serve as a major catalyst for our Santo Domingo project. Our path forward includes successful culmination of the strategic sales process, executing a gold stream agreement and arranging project debt financing."

"A partnership with PASA would simplify the Santo Domingo project as we would focus on construction and operational ramp-up of the mine site only, lowering our upfront capital requirements and allow each company to focus on their core business," said Dr. Albert Garcia, vice-president, projects, at Capstone. "This, coupled with the fixed cost, turnkey proposal from POSCO E&C, an internationally recognized, reputable EPC contractor for the mine site, significantly derisks the overall project."

"The signing of this MOU is a great opportunity for Puerto Ventanas to work with Capstone and to contribute our expertise providing port services and railway cargo solutions. Our track record is internationally recognized in the logistic services and we are confident that we can contribute to the success of the development of Minera Santo Domingo," said Juan Eduardo Errazuriz, chairman at Puerto Ventanas.

"We are looking forward to working with Capstone to offer them the best technical and economical solution for MSD logistics needs," said Jorge Oyarce, chief executive officer at Puerto Ventanas.

About Capstone Mining Corp.

Capstone Mining is a Canadian base metals mining company focused on copper. The company's two producing mines are the Pinto Valley copper mine located in Arizona, United States, and the Cozamin copper-silver mine in Zacatecas state, Mexico. In addition, Capstone has a large-scale, fully permitted, 70-per-cent-owned copper-iron-gold Santo Domingo project in Region III, Chile, in partnership with Korea Resources Corp., 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.

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