So Smart: Creme de la CremeWheaton only deals with the very best companies in the precious metals sector. This is such a feather in our cap. Streaming 50% of the silver is way better than going to market for cash to fund growth!! Gold stream is next and we keep all the copper!! Masterstroke. Well done CS!!
- Use of proceeds – pay down net debt to zero on closing, with a target of zero debt outstanding in 2021. This will position Capstone to fund attractive low risk, high return, quick payback organic growth projects at Pinto Valley and Cozamin. Advancing these projects will provide sustainable benefits for all stakeholders.
- Highly compelling cost of capital – stream structured at a cost lower than the Company’s current cost of financing and significantly lower than available capital markets alternatives, such as equity issuance and high yield debt.
- Capstone free cash flow potential remains robust – Cozamin continues to be a first quartile cost mine. From a corporate perspective, the elimination of interest costs due to debt repayment would largely offset the cost impact of the stream.
- Strategy for cash flow from operations – at spot copper prices, Capstone is expecting to generate $800 million in cumulative after-tax operating cash flow in the next three years (2021-2023). The Company will build cash on the balance sheet, positioning itself to make high return investments, such as exploration drilling and a paste backfill plant at Cozamin, and Eriez HydroFloat coarse particle flotation at Pinto Valley.
Jason Howe, Capstone’s SVP Corporate Development stated, “This is a strong endorsement from a global leader in the metals streaming sector. This will give Capstone an opportunity to get back to having a sector-leading balance sheet to fund strategic growth initiatives. By paying down debt, Capstone can now quickly build equity for shareholders moving forward.”