Capstone Mining Corp. (CS.TO) announced that it has agreed to buy BHP Billiton Ltd. (BHP,BBL,BLT.L,BHP.AX)'s Pinto Valley copper mining operation and the associated San Manuel Arizona Railroad Company or SMARRCO in Arizona, USA for $650 million. Closing of the transaction is expected to occur in the third quarter of 2013.
Capstone said that the deal immediately transforms Capstone into an intermediate copper producer. It is projected to produce 130 - 150 million pounds of copper in concentrate and approximately 10 million pounds of copper cathode annually, along with by-product molybdenum and silver, at an estimated cash cost of approximately $1.80 per pound, net of by-product credits, for the first five years of production.
Under deal terms, Capstone is committed to maintaining Pinto Valley's existing environmental standards and will provide financial assurances reasonably necessary to obtain regulatory approvals for the transfer of the applicable permits. BHP Billiton employees working at Pinto Valley and SMARRCO will become employees of Capstone as part of the transaction.
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