On March 24th, 2021, Capstone Mining Corp. (“Capstone”), holding company of the Capstone Group and Wheaton Precious Metals International Ltd. (“Wheaton”), executed a streaming financing agreement named Precious Metals Purchase Agreement (the “Agreement”), in connection to the production of gold from the Santo Domingo project, a large scale fully-permitted copper-iron-gold project in Region III, Chile (the “Project”). Upon closing, in consideration for the sale and delivery of the refined gold, Wheaton will pay Capstone an upfront deposit of USD 30,000,000 and additional deposits of USD 260,000,000.
As provided in the Agreement, Wheaton will receive 100% of the gold production from the Project until 285,000 ounces have been delivered, thereafter dropping to 67% of the gold production. Wheaton will make ongoing payments equal to 18% of the spot gold price, until the upfront deposit has been reduced to zero, thereafter increasing to 22% of the spot gold price upon delivery.
As the most recent development in this transaction, on April 21st, 2021, Capstone received $30 million from Wheaton as an early deposit. The other $260 million deposit will be accessible during the development and construction of the Santo Domingo Project, subject to compliance with the conditions agreed upon by the parties.
Wheaton is one of the world’s largest precious metals streaming companies and has entered into streaming agreements for over 23 operating mines and 8 development stages projects.
Capstone is a mining company engaged in the production of an exploration for base metals centred in the Americas, with a focus on copper. In addition to the Project, Capstone owns two producing copper mines, in the Pinto Valley in the US and Cozamin in Mexico.
In this transaction, involving the three jurisdictions of Canada, Chile and Barbados, Chilean law firms FerradaNehme and Bofill Mir & Alvarez Jana acted as special counsel in Chile for Capstone and Wheaton, respectively. FerradaNehme’s team was led by Director Juan Andrés Bretón, together with Senior Associate Roberto Carrillo, with the collaboration of Associate Joaquín Deck. While Bofill Mir & Alvarez Jana’s team was formed by Partner Pablo Mir, Senior Associate Felipe Allende, and Associates Alonso Calderón and Francisco Miranda.
Regarding the jurisdiction of Canada, Canadian law firms Blake, Cassels & Graydon LLP and McCarthy Tétrault LLP acted as special counsel in Canada for Capstone and Wheaton, respectively. The former’s team was composed by Partners Samantha Rossman, Steven McKoen and Bob Wooder, and Associate Sarah Manifold; while the latter’s team was composed of Partners Roger Taplin and Christopher Langdon, Counsel Patrick Deutscher and Associates Christopher Zawadski, Erin O’Callaghan and Geena Lee.