Capstone Mining of Canada, run by British investment firms Audley Capital Advisors and Orion Mine Finance, and Mantos Copper, which focuses on Chile, are merging to form a new, Americas-focused copper producer, Capstone Copper.
The new miner will be listed on the Toronto Stock Exchange and will produce more than 175000 tons of copper in 2021, with combined reserves of 4.9 million tons, the companies said.
Headquartered in Vancouver, British Columbia, Capstone Copper will operate in (Pinto Valley) in the United States, (Cozamin) in Mexico and (Mantos Blancos, Mantoverde and Santo Domingo) in Chile.
The plan is to increase the combined company's copper production by 45 per cent to 260000 tonnes a year by 2024 through a fully financed project currently under way by Mantos Blancos and a 30 per cent stake in Mantoverde (Mitsubishi Materials).
Under the terms of the deal, each current shareholder of, Capstone Mining will receive a share of the new company owned by Capstone Mining. Current Capstone owners will own 61 per cent of the new company, while Mantos shareholders will own 39 per cent.
John MacKenzie, executive chairman of Mantos, will lead the merged company as CEO, while Darren Pylot, the boss of Capstone, will serve as executive chairman.
Mantos Copper acquired the Mantoverde and Mantos Blancos copper mines from Anglo American in 2015.
The Mantoverde open-pit mine, located in the arid Atacama Desert, has an estimated 2.1 million tons of copper reserves.
The company recently completed the expansion of its sulphide concentrator in another business, Mantos Blancos, extending the life of its assets to 2035.
The deal is expected to close in the first quarter of 2022, the two sides said.
Copper, used in construction and electricity, has become one of the most popular commodities because of its key role in the transition to a green economy. Red metal is needed for battery storage, electric car charging stations and related Electroweb infrastructure.
Chile is the world's largest copper producer, meeting more than 30% of the world's copper demand. The metal accounts for as much as 15% of the country's gross domestic product.
