Highland Copper signs deal to sell its 34% of WPN

Executive Summary

• Highland Copper Company Inc. has signed a binding offer to sell its 34% interest in the White Pine North project to joint venture partner Kinterra Copper USA LLC for approximately $30 million (U.S.).
• The transaction is designed to strengthen Highland Copper's balance sheet by eliminating existing debt and providing non-dilutive funding to advance its flagship Copperwood project toward a construction decision.
• Completion of the transaction is targeted by year-end, subject to definitive agreements, customary closing conditions, and regulatory approvals.

Key Details

• Transaction Structure: Binding offer signed for the sale of Highland Copper's 34% non-controlling interest in the White Pine North project.
• Total Consideration: Approximately $30 million (U.S.).
• Cash Component: $18.3 million (U.S.) in cash, net of outstanding principal and accrued interest on a loan from Kinterra to Highland Copper's subsidiary, Upper Peninsula Copper Holdings Inc.
• Debt Repayment: The net cash proceeds are expected to eliminate approximately $11.7 million (U.S.) in outstanding loan principal and accrued interest.
• Joint Operating Agreement Terms: Parties agreed to suspend cash calls under the White Pine joint operating agreement. Highland Copper is not obligated to make cash calls through closing; any such calls will only be recorded and allocated if the transaction does not close.
• Use of Proceeds:
  • Finance Copperwood project activities required to advance to a construction decision (including detailed engineering and project financing).
  • Eliminate existing debt to improve financial flexibility.
  • Streamline corporate structure to focus on the 100%-owned Copperwood project.
• Strategic Rationale: The divestiture provides immediate, non-dilutive funding, derisks the near-term timeline, and simplifies the asset portfolio to focus solely on the fully permitted Copperwood project.
• Advisers: Moelis & Company LLC served as exclusive financial adviser; McMillan LLP served as legal adviser.
• Timeline: Parties aim to complete the transaction by year-end.

Notable Quotes

• "This is a truly pivotal moment for Highland Copper... The sale of our non-controlling stake in White Pine North delivers immediate, non-dilutive funding that achieves several key strategic objectives at once. We are now well capitalized to push our flagship Copperwood project to a construction decision, while eliminating debt and simplifying our corporate structure. This move sharpens our focus, derisks our near-term timeline and significantly enhances our ability to become the next domestic U.S. copper producer." — Barry O'Shea, Chief Executive Officer