VANCOUVER, BC, Dec. 15,
2022 /PRNewswire/ - 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 2,100km2 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.
Liquidity and Capital Resources Update
As at the closing of the Transaction and after payment of
Transaction Fees and completion of the Bond Buyback, the Company is
estimated to have approximately C$71
million in cash and cash equivalents, plus restricted cash
of C$7.1 million, as compared to
C$32.4 million as at September 30, 2022, plus C$17.2 million in restricted cash. The
ability of the Company to meet its future cash commitments and
working capital obligations, and to satisfy its Bond covenants, is
dependent upon a number of factors, including the Company's
continued ability to generate positive cash flow from the Copper
Mountain mine. Actual cash flow for the Copper Mountain mine may
vary from projections depending on various assumptions concerning
the operations and capital expenditure plans of the Company
following completion of the Transaction, commodity prices, and
general economic, market or business conditions. If cash flows are
insufficient to satisfy the Company's cash obligations, Bond
covenants and Bond servicing costs going forward, the Company will
pursue other options to meet its future capital needs.
About Copper Mountain Mining Corporation
Copper
Mountain's flagship asset is the 75% owned Copper Mountain Mine
located in southern British
Columbia near the town of Princeton. The Copper Mountain Mine currently
produces approximately 100 million pounds of copper equivalent on
average per year. Copper Mountain trades on the Toronto Stock
Exchange under the symbol "CMMC" and Australian Stock Exchange
under the symbol "C6C".
Additional information is available on the Company's web page at
www.CuMtn.com.
On behalf of the Board of
COPPER MOUNTAIN MINING CORPORATION
"Gil
Clausen"
Gil Clausen
President and Chief Executive Officer
Website: www.CuMtn.com
Cautionary Note Regarding Forward-Looking Statements
This news release may contain "forward looking information"
within the meaning of Canadian securities legislation and
"forward-looking statements" within the meaning of the United
States Private Securities Litigation Reform Act of 1995
(collectively, "forward-looking statements"). These forward-looking
statements are made as of the date of this news release and Copper
Mountain does not intend, and does not assume any obligation, to
update these forward-looking statements, whether as a result of new
information, future events or otherwise, except as required under
applicable securities legislation.
All statements, other than statements of historical facts, are
forward-looking statements. Generally, forward-looking statements
relate to future events or future performance and reflect Copper
Mountain's expectations or beliefs regarding future events.
In certain circumstances, forward-looking statements can be
identified, but are not limited to, statements which use
terminology such as "plans", "expects", "estimates", "intends",
"anticipates", "believes", "forecasts", "guidance", scheduled",
"target" or variations of such words, or statements that certain
actions, events or results "may", "could", "would", "might",
"occur" or "be achieved" or the negative of these terms or
comparable terminology. In this news release, certain
forward-looking statements are identified, including the Company's
potential plans with respect to entitlement to any contingent
consideration under the Transaction, use of net cash proceeds
received at closing of the Transaction, payment of the Bond
amendment fee and the completion of the Bond Buyback and any future
buyback or redemption in connection with any contingent
consideration under the Transaction, anticipated working capital
requirements and cash commitments, anticipated production and cash
flow at the Copper Mountain Mine, and expectations for other
economic, business and/or competitive factors. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that could cause actual results, performance, achievements
and opportunities to differ materially from those implied by such
forward-looking statements. Factors that could cause actual results
to differ materially from these forward-looking statements include,
among others, assumptions concerning the Transaction and the
operations and capital expenditure plans of the Company following
completion of the Transaction, the potential impact of the
consummation of the Transaction, the potential impact of the
payment of the Bond amendment fee and the completion of the Bond
Buyback, the diversion of management time on the Transaction and
the Bond Buyback, the successful exploration of the Company's
property in Canada, market price,
continued availability of capital and financing and general
economic, market or business conditions, the Company's ability to
comply with its financial covenants under the Bond terms and meet
its future cash commitments, extreme weather events, material and
labour shortages, the reliability of the historical data referenced
in this document and risks set out in Copper Mountain's public
documents, including the management's discussion and analysis for
the quarter ended September 30, 2022
and the annual information form dated March
29, 2022, each filed on SEDAR at www.sedar.com. Although
Copper Mountain has attempted to identify important factors that
could cause the Company's actual results, performance, achievements
and opportunities to differ materially from those described in its
forward-looking statements, there may be other factors that cause
the Company's results, performance, achievements and opportunities
not to be as anticipated, estimated or intended. While the Company
believes that the information and assumptions used in preparing the
forward-looking statements are reasonable, undue reliance should
not be placed on these statements, which only apply as of the date
of this news release, and no assurance can be given that such
events will occur in the disclosed time frames or at all.
Accordingly, readers should not place undue reliance on the
Company's forward-looking statements.
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SOURCE Copper Mountain Mining Corporation