Canada-based Capstone Mining and Chile-based Mantos Copper have announced the merger of both companies to create a new copper company called Capstone Copper, which will focus on high-quality assets. .
The new company will be listed on the Toronto Stock Exchange and will be based in Vacouver, Canada. Capstone Copper's projects will include Pinto Valley in the US, Cozamin in Mexico and Mantos Blancos, Mantoverde and Santo Domingo in Chile. The new company is expected to have a combined copper production of more than 175,000 tons of copper in 2021 and reserves of more than 4.9 million tons.
The new company plans to increase combined production by 45 percent by 2024 to 240,000 tons of copper per year from its fully funded projects Mantos Blancos and Mantoverde. In addition, the company expects to further increase production by 45 percent to 380,000 tons of copper with the development of other projects such as Santo Domingo.
Following the completion of the transaction, Capstone shareholders will own 61 percent of the new company, while Mantos shareholders will own 39 percent. Moreover, it was decided that John MacKenzie, Executive Chairman and Founder of Mantos, will become the CEO of Capstone Copper. Meanwhile, Darren Pylot, President & CEO and Director of Capstone Mining, will become Executive Chair of Capstone Copper.
The companies emphasized that they have a unique opportunity to unlock entire copper districts, since the potential of their projects is very high, especially in Mantoverde and Santo Domingo. Moreover, both companies have solid experience in the construction and operation of mines, for which the new company is expected to have significant growth in the short term.
“This transaction is in-line with our strategic vision of growing a multi-asset and sustainable copper business in the Americas. The combination of these two companies provides transformational near-term growth and further deepens our bench strength, particularly with respect to mine building, operational and leadership experience,” said Pylot.
The relevance of copper has grown in recent years as it is considered one of the most important battery metals. The red metal is now consider the "new oil" as it plays a critical role in fast-forwarding industrial sectors such as electric vehicle batteries and green infrastructure, reported Goldman Sachs. Furthermore, experts say that current and future copper demand will be driven mainly by the willingness of countries to comply with the Paris Agreement and replace fuel energies with green alternatives, reported MBN.