North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Capstone Mining Corp. Oct. 11 announced that it will be shutting down the Minto Mine due to Pembridge Resources' inability to raise the requisite funds to acquire the copper operation in the Yukon.

In February, Capstone announced plans to sell Minto to Great Britain-based Pembridge Resources for US$37.5 million in cash, plus working capital adjustments, and common shares representing 9.9 percent of the issued and outstanding shares of Pembridge.

Due to unfavorable equity market conditions, however, Pembridge has been unsuccessful in completing the financing required to buy Minto. As a result, the companies have decided to terminate the purchase agreement.

With the sale falling through, Capstone has decided to put Minto on temporary care and maintenance while it weighs value maximizing alternatives for the copper mine, including discussions with Pembridge and other potentially interested parties.

"The decision to put Minto on care and maintenance while we seek alternatives is to preserve and maximize its value," said Capstone Mining President and CEO Darren Pylot. "The team will ensure Minto can be restarted efficiently and safely once the copper and equity markets improve."

Capstone is immediately winding down mining operations at Minto and milling operations are expected to be completed in the next few weeks once the current ore stockpile is processed.

So far this year, Minto has produced 9,241 metric tons (20.37 million pounds) of copper, 89,413 ounces of silver and 7,812 oz gold from 867,804 metric tons of ore averaging 1.25 percent copper, 4.19 grams per metric ton silver and 0.37 g/t gold.

Costs to place this Yukon mining operation on care and maintenance are estimated to be roughly US$5 million in each of 2018 and 2019, with the ongoing costs expected to be under US$4 million annually thereafter for environmental compliance and other activities.

Approximately 200 employees and contractors will be affected. Minto will retain a core team of employees to oversee the site and meet environmental monitoring and legal obligations during the care and maintenance phase.

"Minto has been an important part of Capstone's history and we thank the team at Minto for their commitment and dedication," said Pylot.

–SHANE LASLEY