Capstone Mining (TSX:CS) has completed a “strategic investment” in Nevada Copper (TSX: NCU) of $11.25 million. Capstone, with two producing mines in Mexico and Canada, has purchased 4.5 million shares of NCU at $2.50 per share. The purchase also comes with a whole warrant to purchase an additional share at $3.00 per share.

Darren Pylot, Vice Chairman and CEO of Capstone is quoted in the press release announcing the closing of the deal saying:

We are happy to be a part of this project as it progresses towards its next stage of development.

NCU traded as high as $2.34 yesterday as a result of the news. The 52 week low for NCU is $0.17, representing an increase of over 12 times.

NCU released a new resource estimate in July of this year showing over 9 billion pounds of copper at a 0.2% cutoff grade in the measured, indicated and inferred categories. The resource also shows significant values for iron ore, silver and gold.

Of note in the agreement, Capstone has included a provision to nominate a representative to the board of directors of NCU if Capstone increases its ownership to 19% or higher. NCU has also agreed for Capstone to participate in any future share offering so that Capstone can maintain its 11.1% ownership.

With copper prices continuing to increase, and the already penned agreement between NCU and Chinese copper refiner and processor, Zhongtiaoshan Non-ferrous Metals, things seem to lining up nicely for Nevada Copper’s shareholders.

Click here for the full press release.

Comment

Tweet