Copper Mountain’s flagship asset is the 75% owned Copper Mountain Mine located in southern British Columbia near the town of Princeton

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Copper Mountain completes sale of Eva Copper Project. (Credit: Herbert Aust from Pixabay)

Copper Mountain Mining Corporation (TSX: CMMC) (ASX: C6C) (the “Company” or “Copper Mountain”) is pleased to announce it has closed the previously announced sale of its wholly-owned Eva Copper Project and its 2,100km  exploration land package in Queensland, Australia for total consideration of up to US$230 million (the “Transaction”) to Harmony Gold Mining Company Limited (JSE: HAR) (NYSE: HMY) (“Harmony”).

Under the Transaction agreement, Copper Mountain was entitled to receive gross upfront cash consideration of US$170,000,000  on closing as well as contingent consideration comprised of the following:

A.  Up to US$30,000,000  in cash, based on a contingent payment arrangement where Harmony will pay Copper Mountain 10% of the incremental revenue generated from the Eva Copper Project and the Australian exploration land package above the revenue assuming a US$3.80  /lb copper price; and

B.  Up to US$30,000,000  in cash, based on a contingent payment arrangement where Harmony will pay Copper Mountain US$0.03  per pound of contained copper for any SAMREC copper resource discovered and declared on a new deposit within the Eva Copper Project and the Australian exploration land package after the closing of the Transaction.

Net of withholding taxes and certain purchase price adjustments, the Company received net proceeds of approximately US$129 million . The gross proceeds from the Transaction are subject to applicable capital gains taxes.  The cash proceeds will be used to cover transaction fees, including advisory fees in relation to the Transaction and bondholder consent process, amendment fees required in connection with such bondholder consent (collectively, “Transaction Fees”), and to repurchase up to US$87,000,000  principal amount of the Company’s US$250 million senior secured bonds (the “Bonds”) at an offer price of 103% of the nominal amount (plus accrued interest) under the bond buyback offer agreed with bondholders in consideration for their consent to the Transaction (the terms of which were previously announced in Copper Mountain’s press release dated November 28, 2022  ) (the “Bond Buyback”), and for working capital purposes. The Company is required to make the Bond Buyback offer within thirty (30) days after completion of the Transaction.

The net cash proceeds from any future contingent payments received by the Company from Harmony pursuant to the Transaction before the maturity date of the Company’s Bonds on April 9, 2026  will be applied to either: (i) make offers to buyback Bonds at an offered price of 103% of the nominal amount of the Bonds (plus accrued interest on the repurchased amount) if such contingent consideration is received prior to the applicable interest payment date in April 2024  ; or (ii) redeem Bonds in accordance with the call terms of the Bonds if such contingent consideration is received on or after the applicable interest payment date in April 2024.

Source: Company Press Release