Orion looks to offload another 8.3% stake in Capstone Copper

The three Orion Resource Partners funds that recently sold a stake in Capstone Copper (TSX: CS; ASX: CSC) are selling another 8.3% holding via a secondary offering in Australia for proceeds totalling A$592.8 million ($530.1 million).

The funds have announced a block trade agreement with Macquarie Capital Australia, Canaccord Genuity Australia and RBC Capital Markets Australia for the sale of their equity interest.

Under the deal, the Orion funds will sell 62.4 million CHESS depository interests (CDIs) over the common shares of Capstone, or the equivalent number of fully paid common shares, at a price of A$9.50 each. (CDIs are instruments that allow companies incorporated outside of Australia to trade on the Australian Stock Exchange.)

The CDIs will only be offered to certain eligible investors in Australia, plus other foreign jurisdictions where the distribution of CDIs does not require a prospectus, which would exclude Canada.

The Orion mining funds hold 152.9 million common shares for a 20.3% stake in Capstone. When the the transaction closes, they will own 90.5 million shares, or about 12% of Capstone’s share capital.

As part of the secondary offering, Orion has agreed not to sell any common shares or other securities of Capstone for a period of 90 days. The three funds involved are Orion Fund JV Limited, Orion Mine Finance Fund II and Orion Mine Finance (Master) Fund.

In early February, Orion announced the sale of 11.9 million common shares, or 1.7% of Capstone, in a bought deal offering involving RBC Capital Markets, National Bank Financial and Scotiabank. In total, the financing saw more than 68.4 million shares sold including 56.5 million by Capstone.

As detailed previously, Capstone raised $431.2 million from this to fund its projects in Chile, which include the Mantos Blancos copper-silver mine located in the Antofagasta region and the 70% owned Mantoverde copper-gold mine located in the Atacama region.

Shares of Capstone Copper fell 3.2% at market open in Toronto to $8.69 apiece. The stock has traded within a range of $4.40-$9.15 over the last 52 weeks. Its market capitalization is over $6.5 billion.