Capstone Copper sells 25% of Chilean Santo Domingo and Sierra Norte projects to Orion for $360M

Capstone Copper sells a 25% stake in its Santo Domingo and Sierra Norte copper projects in Chile to Orion Resource Partners for up to $360 million, reducing capital needs and advancing growth in the Atacama region.

Canada’s Capstone Copper Corp. (TSX:CS) (ASX:CSC) has entered into a strategic partnership with Orion Resource Partners, selling a 25% interest in its Santo Domingo and Sierra Norte copper projects in Chile for up to $360 million.

Deal strengthens Capstone’s balance sheet and project pipeline

The transaction aims to reduce upfront capital requirements for Capstone’s flagship Santo Domingo project while advancing development across the Mantoverde–Santo Domingo district in Chile’s Atacama region.

Under the agreement, Orion will provide:

• $225 million upon a positive final investment decision (FID);
• $75 million within six months thereafter;
• Up to $60 million in contingent milestone-based payments; and
• An additional $10 million equity investment in new Capstone shares, issued at a 5% premium, to support near-term exploration.

Following completion, Orion’s ownership in Capstone will increase slightly from 11.9% to 12%.

Strategic alignment with energy transition metals

Capstone CEO Cashel Meagher described Santo Domingo as the company’s “next pillar of transformational growth,” citing its low projected cash costs and proximity to the Mantoverde operation, just 35 km away.

“The same experienced team that built Mantoverde will lead the construction and ramp-up at Santo Domingo,” Meagher said, adding that the partnership “further strengthens Capstone’s position as a leading copper producer in the Americas.”

Orion’s Chief Investment Officer, Istvan Zollei, said the firm was confident in Capstone’s ability to “deliver a world-class copper asset aligned with the global energy transition.”

Financial implications and valuation debate

The deal reduces Capstone’s equity funding requirement for Santo Domingo to roughly $400 million, assuming project financing and proportional contributions from Orion. Capstone also retains a buy-back right that allows it to regain full ownership after the start of commercial production, while ensuring Orion receives a defined return.

However, analysts at Jefferies described the valuation as discounted, citing potential jurisdictional risk, project complexity, and the buy-back clause as contributing factors. They noted that Orion’s effective 25% stake, valued at $408 million based on Santo Domingo’s $1.6 billion NAV, represents a 0.6x to 0.7x price-to-NAV multiple—lower than comparable transactions, such as Hudbay Minerals’ $600 million sale of a 30% interest in its Copper World project to Mitsubishi.

Market reaction

The announcement was made late Monday. On Tuesday, Capstone’s shares climbed 3.43% in Australia, closing at A$14.50. Trading on the Toronto Stock Exchange was paused due to the Canadian Thanksgiving holiday.

Capstone Copper currently holds a market capitalization of approximately C$9.7 billion ($6.9 billion).