Kutcho Copper Corp. acquires High Grade VMS Project from Capstone

Mergers, Acquisitions & Divestitures
Transaction Details

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Fort Capital Partners is pleased to announce that Kutcho Copper Corp. (formerly, Desert Star Resources Ltd.) (TSXV:KC) (“KCC”) has completed the acquisition of the Kutcho high grade VMS project in British Columbia from Capstone Mining Corp. (TSX:CS) (“Capstone”). Led by a seasoned management team and an outstanding board of directors, KCC acquired the Kutcho asset for $31.8 million, consisting of $28.8 million in cash plus the issuance of common shares.

The Kutcho project underwent a pre-feasibility study in 2017 denoting a project with an NPV-8% of $265 million (after-tax) and an IRR of 27.6% with room for significant expansion. KCC has assembled a top rated team including the prior mine Minister of British Columbia, the Honorable Bill Bennett, to advance the development and permitting of the project.

In connection with the acquisition the company partnered with Wheaton Precious Metals (NYSE:WPM) (“WPM”) as a lead strategic investor. WPM subscribed for $20 million convertible term debt loan and a US$65 million precious metals purchase agreement for up to 100% of the payable silver and gold production from Kutcho. WPM also subscribed for $4.0 million of units in the Private Placement. The commitment by WPM reflects the opportunity in the project and the backing of the KCC team.

Concurrent with the acquisition, KCC has closed a $14.7M private placement of 22.6 million units at $0.65 per unit (the “Private Placement”), with each unit consisting of one common share and one-half of one warrant exercisable at $1.00 per share.

Fort Capital Partners acted as financial advisor to KCC in connection with the acquisition of Kutcho as well as its capital markets strategy