Mining-focused acquisition company Pembridge Resources has purchased 100% of Minto Explorations from Capstone Mining.

A definitive share purchase agreement (SPA) was signed on 3 June and the transaction closed simultaneously.

The SPA replaces the agreement signed between the companies that were first announced on 15 February 2018.

Minto is an open pit and underground copper-gold-silver mine located in central Yukon. It is approximately 240km north of the capital city Whitehorse, along the Klondike Highway.

According to the agreement, Pembridge will pay cash instalments totalling $20m to Capstone.

Pembridge is expected to pay $5m within 60 days of reaching commercial production and $5m within 90 days once the average London metals exchange copper price has exceeded $3/lb for two consecutive quarters within the three years of commercial production at Minto.

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A final payment of $10m from Pembridge to Capstone after two consecutive quarters of commercial production in which average LME copper price is more than $3.50/lb within the three years after commercial production.

Capstone president and CEO Darren Pylot said: The sale of the Minto mine is very good news all around. Capstone will no longer incur the expense of having the mine on care and maintenance, and the recommencement of operations will be positive for Minto employees, contractors and the local economy.

“Completing Minto’s divestiture allows Capstone’s management to focus on our core operations, which includes completing the strategic process for Santo Domingo.”

Pembridge CEO David Linsley said: “We have said all along that the acquisition of Minto represents a transformational opportunity for Pembridge and its shareholders, which is why we continued to pursue the transaction despite last year’s downturn in commodity markets and the challenging environment for raising capital.

“While market conditions impacted the closing of the transaction, we were able to use this time to achieve a deal and financing package, which we expect to be value accretive for Pembridge shareholders.”

In order to finance the recommencement of operations, a total of $10m has been secured from New York-based private equity group Copper Holdings and Lion Point Capital entity Cedro Holdings I following a shareholder and financing agreement between Pembridge, Copper Holdings and Lion Point.

“Completing Minto’s divestiture allows Capstone’s management to focus on our core operations.”

Pembridge will have immediate access to commence the restart process at Minto as part of the financing agreement.

It expects to recommence commercial production at Minto during Q4 2019.

The proceeds from the divestment are intended to be used to reduce outstanding debt under Capstone’s revolving credit facility.