Capstone Mining Corp.’s 70% owned subsidiary Minera Santo Domingo (MSD) has entered into a memorandum of understanding (MOU) with Puerto Abierto SA (PASA), a wholly owned subsidiary of Puerto Ventanas SA for Capstone’s Santo Domingo project in Chile’s Region III, near Copiapo. During a 90-day period, both MSD and PASA will explore mutual synergies and regional benefits for the proposed Puerto Santo Domingo, which is fully permitted and located 100 kilometers (km) from the Santo Domingo project. It would be one of only two capesize vessel ports in the region, making it an attractive site for bulk shipments and a key asset allowing for broad resource development in Region III of Chile.
MSD will allow PASA to study the project engineering and conduct a market study. PASA is looking to potentially acquire, construct, operate and maintain the deep-water port, including financing its development. Once in operation, Santo Domingo will receive preferred service as its volumes will represent a baseload of business for the port. The MOU also gives PASA 90 days to evaluate the replacement of the 110-km magnetite concentrate pipeline with a railway as part of its rail business, Ferrocarril del Pacifico SA (FEPASA). The Santo Domingo project infrastructure that is under consideration in this MOU represents approximately $400 million of the CAPEX identified in the most recent technical report and includes marine works including pier; iron concentrate pipeline from Santo Domingo mine to port; magnetite filter plant and stockpile building; copper storage building; and ship loading and support facilities.
“Over the past three months, we have seen a surge in interest in our fully permitted Santo Domingo project,” Capstone President and CEO Darren Pylot said. “I believe this relationship with Puerto Ventanas will serve as a major catalyst for our Santo Domingo project.”
The path forward includes the culmination of the strategic sales process, executing a gold stream agreement and arranging project debt financing, the company said.
“A partnership with PASA would simplify the Santo Domingo project as we would focus on construction and operational ramp-up of the mine site only, lowering our upfront capital requirements and allow each company to focus on their core business,” Capstone Vice President of Projects Dr. Albert Garcia said. “This, coupled with the fixed cost, turn-key proposal from POSCO E&C, an internationally recognized, reputable EPC contractor for the mine site, significantly derisks the overall project.”