How Capstone’s $360M Orion Deal Could Transform Copper Mining in Chile
Capstone Copper has struck a strategic deal with Orion Resource Partners, unlocking up to $360 million for a 25% stake in its Santo Domingo and Sierra Norte projects, accelerating development in Chile’s Atacama region.
- Orion to acquire 25% interest in Santo Domingo and Sierra Norte for up to $360 million
- Initial $300 million investment contingent on positive final investment decision (FID)
- Up to $60 million in milestone-based contingent payments tied to resource and feasibility milestones
- Orion to subscribe for $10 million in Capstone shares to fund exploration programs
- Capstone retains buyback option to regain full ownership post-commercial production
Strategic Partnership Unlocks Capital and Growth
Capstone Copper Corp. has announced a significant investment agreement with Orion Resource Partners, marking a pivotal step in advancing the Santo Domingo copper project and the adjacent Sierra Norte deposit in Chile’s Atacama region. Orion will acquire a 25% stake in these projects for up to $360 million, contingent on a positive final investment decision (FID) expected in the second half of 2026.
This infusion of capital is structured with an initial $225 million payment upon FID, a $75 million matching contribution within six months, and up to $60 million in contingent milestone payments tied to key technical and permitting achievements. Concurrently, Orion will invest $10 million directly into Capstone’s equity at a premium, funding an expanded exploration program targeting oxide and sulphide resources.
De-risking and Financial Flexibility
The transaction significantly de-risks Capstone’s capital funding requirements for Santo Domingo, reducing its estimated equity contributions to approximately $400 million. This financial flexibility is critical as Capstone prepares for construction and project financing, leveraging lessons learned from the successful Mantoverde mine nearby. The partnership also includes a buyback option allowing Capstone to repurchase Orion’s stake after commercial production begins, preserving future upside potential.
Exploration and District Synergies
Proceeds from Orion’s equity subscription will support a robust exploration campaign, including a 54,700-metre drill program at Santo Domingo and Estrellita, and a 19,200-metre program at Sierra Norte. These efforts aim to delineate oxide resources and explore near-mine sulphides, unlocking additional value beyond the current feasibility study. The broader Mantoverde-Santo Domingo district integration plan envisions operational synergies, cost savings, and potential cobalt production, positioning the district as a world-class copper and critical minerals hub.
Economic and Social Impact
The Santo Domingo project is expected to generate approximately 6,000 jobs during construction and over 1,000 permanent jobs once operational, contributing more than $2 billion in taxes to Chile over its life. With a 19-year mine life and competitive cost structure, the project aligns with global demand for copper and critical minerals essential to the clean energy transition.
Capstone’s CEO Cashel Meagher highlighted the strategic importance of the deal, emphasizing the company’s commitment to responsible growth and leveraging its experienced team. Orion’s Chief Investment Officer Istvan Zollei expressed confidence in Capstone’s operational capabilities and the project’s role in sustainable resource development.
Next Steps Toward Final Investment Decision
Capstone will continue advancing detailed engineering, securing project financing, and strengthening its balance sheet ahead of the anticipated FID in H2 2026. The company remains focused on transparent stakeholder engagement and prudent execution to realize the full potential of Santo Domingo and the district.
Bottom Line?
This strategic investment not only accelerates Santo Domingo’s development but also sets the stage for Capstone’s emergence as a leading copper producer in a critical global mining district.
Questions in the middle?
- Will Capstone secure project financing on favorable terms to complement Orion’s investment?
- How will exploration results at Sierra Norte and Santo Domingo oxide resources impact project economics?
- What are the implications of the buyback option for Capstone’s long-term ownership and production profile?
