Capstone Copper Announces up to $360 Million Investment from Orion for 25% Interest in Santo Domingo

Executive Summary

• Orion Resource Partners will acquire a 25% indirect ownership stake in Capstone’s Santo Domingo and Sierra Norte projects for up to US$360 million.
• The deal includes an equity subscription of US$10 million at a 5% premium, which will fund a $40 million exploration program (54,700 m drill at Santo Domingo and 19,200 m at Sierra Norte).
• Capstone retains a buy‑back option to re‑acquire the 25% stake after commercial production, and the transaction is expected to de‑risk capital requirements and support a FID on Santo Domingo in H2 2026.

Key Details

• Transaction Structure
• Orion pays US$225 million upon a positive Final Investment Decision (FID) for Santo Domingo, plus a US$75 million matching contribution within six months of FID.
• Up to US$60 million contingent consideration payable in three US$20 million tranches tied to specific technical milestones (reserve definition at Sierra Norte, oxide feasibility study, and cobalt processing circuit feasibility & permitting).
• Equity Subscription
• Orion subscribes for Capstone common shares for gross proceeds of US$10 million at a price representing a 5% premium to the five‑day VWAP prior to announcement (subject to TSX approval).
• Use of Proceeds
• Funding of an updated district exploration program:
  • 54,700 m drill program at Santo Domingo/Estrellita to delineate oxide resource and near‑mine sulphides.
  • 19,200 m drill program at Sierra Norte to advance resource definition.
• Exploration expenditure guidance raised to US$40 million for 2025 (from US$25 million).
• Financial Impact
• Orion’s cash contribution reduces Capstone’s estimated equity share of construction capital to ~US$400 million, providing greater financial flexibility.
• Expected post‑tax IRR for Capstone: ≈24% unlevered and >75% levered (excluding contingent consideration).
• Buy‑Back & Ownership Rights
• Capstone may repurchase up to the full 25% stake after commercial production at a price delivering Orion a predefined return.
• Option for Capstone to reconsolidate 100% ownership of the JVCo once Santo Domingo reaches commercial production.
• Project Timeline
• Transaction is conditional on a positive FID; target FID in H2 2026.
• Next steps: secure project financing, advance detailed engineering, and strengthen balance sheet ahead of sanctioning decision.
• Strategic Rationale
• Validates Capstone’s execution capability and de‑risks funding for Santo Domingo.
• Leverages successful partnership model from nearby Mantoverde operation.
• Provides upside potential through reserve definition, oxide and cobalt feasibility studies, and district‑scale synergies.

Notable Quotes

• Cashel Meagher, President & CEO – “Santo Domingo represents the next pillar of transformational growth… backed by industry‑competitive capital intensity and first‑quartile cash costs.”
• Istvan Zollei, CIO Orion – “We are confident in Capstone’s ability to build and operate Santo Domingo as a high‑quality, diversified copper operation for the clean energy transition.”
• John MacKenzie, Chair – “This transaction is an important milestone… leveraging strengths of both companies to deliver transformational copper growth.”