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Minto mothballed as sale falls through

Capstone Mining (TSX: CS) is mothballing its Minto copper mine in Yukon after London-listed Pembridge Resources failed to find finance for the acquisition announced in February.
Minto mothballed as sale falls through Minto mothballed as sale falls through Minto mothballed as sale falls through Minto mothballed as sale falls through Minto mothballed as sale falls through

Yukon copper mine to go on care and maintenance

Staff reporter

Capstone said last week that Minto's mining operations would cease immediately and it would be put on temporary care and maintenance while the company continued to explore "value maximising alternatives" - including discussions with Pembridge, and other potentially interested parties.

Pembridge (LSE: PERE) said "extremely challenging" market conditions had made it increasingly difficult to close the equity financing element of the Minto acquisition that would be favourable to all parties.

Under the deal struck in February, Pembridge was to pay Capstone US$37.5 million in cash and 9.9% of its equity for the only operating mine in the territory. 

Pembridge CEO David Linsley said the company had commitments for the significant majority of financing still in place and was in "ongoing discussions" to complete the final elements of a revised offer.

It had announced a $30 million offtake financing arrangement with an unnamed "major global Japanese trading house" in June. 

"It is therefore anticipated that an amended agreement will be reached in the best interests of both Pembridge, Capstone and their respective shareholders in the near future," Linsley said.

Capstone president and CEO Darren Pylot said the team would ensure Minto could be restarted efficiently and safely once the copper and equity markets improved.

He said about 200 employees and contractors would be affected and care and maintenance costs would be in the order of about US$5 million in both 2018 and 2019, then $4 million annually ongoing.

Minto produced 9,400 tonnes of copper of the company's 60,600t for the nine months to September 30.

The bulk of Capstone's copper production, some 39,000t year-to-date, was from Pinto Valley in Arizona, followed by 12,200t from its Cozamin polymetallic mine in Mexico.

Pembridge shares were in suspension and last traded at 1.28p, capitalising it at £290,000.

Capstone shares hit a 52-week low intraday on Friday of C64c and closed at 65c, about $1 lower than their value a year ago, capitalising the company close to $260 million.