Yukon mine is mothballed as soft copper markets derail planned sale
October 12, 2018 | By The Canadian Press
VANCOUVER – A Vancouver-based mining company says soft copper and
equity markets have combined to undermine the sale of its property
in central Yukon, so it plans to shut the Minto Mine until a better
opportunity is found.
Capstone Mining Corp. says in a release that Pembridge Resources
has been unable to arrange financing to purchase the copper mine,
and the two companies have terminated the agreement announced in
February.
About 200 employees and contractors will be affected as mining
operations are expected to stop almost immediately and milling
operations will wrap up as soon as the current ore stockpile is
processed.
Capstone says only a core team of workers will stay to oversee
the site and meet environmental monitoring and legal obligations
while the mine is put into temporary care and maintenance.
Capstone initially agreed to sell Minto to Pembridge for US$37.5
million, plus working capital adjustments and common shares
representing 9.9 per cent of the issued and outstanding shares.
Capstone had planned to use the net proceeds primarily to reduce
its own outstanding borrowings but president Darren Pylot says
keeping Minto in a holding pattern is an option until markets pick
up.
“The decision to put Minto on care and maintenance while we seek
alternatives is to preserve and maximize its value,” Pylot says in
the statement Thursday.
“The team will ensure Minto can be restarted efficiently and
safely once the copper and equity markets improve.”
Costs to place the mine on care and maintenance are estimated to
be approximately US$5 million in each of 2018 and 2019, with ongoing
costs expected to be under US$4 million annually in 2020 and later,
the Capstone statement says.
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