Capstone Copper's San Pietro Deal Unlocks District Upside at Bargain Price

Dow Jones08-31 21:45

0945 ET - Capstone Copper's completed acquisition of the copper assets at the San Pietro copper-gold-iron-cobalt project adds scale to its Mantoverde-Santo Domingo District at a good price. TD Cowen's Craig Hutchison notes that the district now encompasses about 60,000 hectares, of which San Pietro makes up about 27%. The addition adds a "considerable resource base" of about 4.4 billion pounds of copper and 770,000 ounces of gold. At the $25 million transaction price in Capstone shares, Hutchison calculates that Capstone paid less than a cent per pound for the copper resources alone, excluding by-product credits. The analyst says that while the transaction is accretive on its own merits, there is more upside from consolidated district control, exploration potential and district synergies.

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