Camino, Nittetsu and Denham Capital Sign Definitive Agreement for Acquisition of the Puquios Copper Project in Chile
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Camino, Nittetsu and Denham Capital Sign Definitive Agreement for
Acquisition of the Puquios Copper Project in Chile
Vancouver, October 7, 2024 – Camino Minerals Corporation (TSXV: COR) (OTC: CAMZF) (“Camino” or the
“Company”) is pleased to announce that, further to its news release on June 27, 2024, it has entered into a
definitive share purchase agreement dated October 4, 2024 (“Agreement”) with Nittetsu Mining Co., Ltd.
(“Nittetsu”) and Santiago Metals Investment Holdings II SL and Santiago Metals Investment Holdings II -A LLC
(together, the “Vendors”), pursuant to which Camino and Nittetsu will jointly acquire (through a Chilean entity
co-owned 50/50 by Camino and Nittetsu) all of the issued and outstanding shares of Cuprum Resources Chile SpA
(“Cuprum”), a Chilean incorporated company and the owner of the Puquios Project (“Puquios” or the “Project”),
a construction-ready copper project located in Chile (the “Transaction”).
In connection with the Transaction, and subject to approval of the TSX Venture Exchange (the “Exchange”),
Camino intends to undertake a private placement of common shares to close prior to, or concurrently with, closing
of the Transaction, for gross proceeds of up to $2 million for working capital purposes. The terms, timing, and
pricing of such financing have not been finalized and will be detailed in a subsequent news release. The Vendors
have agreed to participate in the financing, directly or indirectly, in the amount of $500,000.
The Vendors are companies owned by a fund advised by Denham Capital Management LP (“Denham”) and are
non-arm’s length parties to Camino under the policies of the Exchange. Separate Denham-advised funds hold a
shareholder interest in Camino of approximately 15% and Justin Machin, a Managing Director of Denham, is also
a member of the Camino board of directors.
The Transaction will constitute a non-arm’s length “Reverse Takeover” for Camino as that term is defined in Policy
5.2 of the Exchange. The Company will be seeking an exemption from the Exchange with respect to any
sponsorship requirements in respect of the Transaction.
All dollar amounts in this news release are in Canadian Dollars unless otherwise stated.
Highlights:
- Production from conventional SXEW copper heap leach mine
- Technology upside with the potential to economically process the underlying sulphide resource
- Production and resource upside with new exploration (>13,000 hectare land package), locally sourced
oxide ore from third parties and potential development of sulphide resources
- Operational and development synergies to apply to “next in line” Los Chapitos, Peru
- More exploration at Los Chapitos IOCG copper and Maria Cecilia copper porphyry in Peru
The Company views the Puquios Project as one of the premier construction-ready copper assets currently
available, and one that is well-suited for Camino's financing and development capabilities. By adding copper
production assets to its portfolio, Camino aims to strengthen its exploration strategy, with a broader vision to
become a consolidator in the copper sector, driving value through cashflow generation via the acquisition of the
Puquios Project in Chile, and new copper discoveries and potential development at its Los Chapitos copper project
and continued exploration drilling at its Maria Cecilia project in Peru. Camino has been actively pursuing a
corporate acquisition strategy, carefully evaluating numerous projects over the past several years to build a robust
copper portfolio in anticipation of favorable macro-economic conditions for higher copper prices.
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"We are pleased to expand our collaboration with Camino through the acquisition of the Puquios Project in Chile”
said Shinichiro Mita, General Manager of Nittetsu Mining Co., ltd. "This opportunity aligns with Nittetsu's
commitment to expanding our footprint in the copper sector by utilizing our extensive operational experience and
technical expertise. Our presence and experience in Chile, including the producing Atacama Kozan mine and the
construction of the Arqueros copper mine in the La Serena district, where the Puquios Project is located, will be
complementary assets to this venture. We believe Puquios holds significant potential for near -term copper
production, and alongside Camino, we are dedicated to unlocking value for all stakeholders through efficient
project development and long-term success. This opportunity also extends to our investment in, and exploration
at, the Los Chapitos copper project in Peru."
“The Puquios Project acquisition marks a pivotal step in our strategy to become a mid-tier copper producer, with
production and cashflow at the core of our business plan ,” said Jay Chmelauskas, Chief Executive Officer of
Camino. “The Puquios Project offers the potential for a long-life mine, in a high-quality prospective jurisdiction,
aligning with our goal of building a long-term copper business. Together with our partners at Nittetsu, we believe
that our business and copper portfolio will not only drive significant value for our shareholders but also position
Camino as a key player in the copper sector, alongside our ongoing exploration efforts at Los Chapitos and Maria
Cecilia in Peru.”
“This is a good time in the copper cycle to bring Puquios, one of the few shovel-ready copper projects in the
Americas, to the public markets and continue Denham’s partnership with Camino that started in 2021” said Justin
Machin, Managing Director of Denham. “We look forward to working closely with Camino and Nittetsu to progress
Puquios through construction and into production.”
Description of Cuprum
Cuprum, headquartered in Santiago, Chile, has been engaged in the exploration and development of mineral
resources, the nature of which will not change upon completion of the Transaction. Cuprum has advanced the
Puquios Project to its current Definitive Feasibility Stage, following the completion of a NI 43-101 technical report
in January 2022, authored by Ausenco.
Pursuant to the audited financial statements of Cuprum as at December 31, 2023, Cuprum had US$47.95 million
in total assets, including intangible assets of US$43.46 million, representing the cumulative costs of exploring and
developing Puquios, and net cash of US$2.35 million. At that same time, Cuprum held US$432,970 in liabilities,
with no external debt outside of trade payables, for a net asset balance of US$47.52 million. Cuprum, as an
exploration and development company, has not generated revenues.
Key Terms:
• Initial Cash Payment: CAD $10 million cash payment funded by Nittetsu (less the CAD
$100,000 exclusivity payment already made and any applicable Chilean withholding tax) on
closing of the Transaction (“Closing”).
• Initial Equity Consideration: CAD $10.5 million in Camino shares on Closing, with the number
of shares issued calculated based on the lesser of CAD $0.075 per share and the price per
share or unit of any Camino shares or Camino units issued pursuant to a private placement or
public equity financing of Camino that closes on or before Closing for gross proceeds of more
than $2 million; provided that if the issue price of the consideration shares is required, by the
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Exchange or otherwise, to be greater than $0.075 per Camino share, the Vendors will receive
such number of additional Camino shares, issued at no cost, as would have been issuable if
the consideration shares had been issued at $0.075 per Camino share, as a means of price
protection. Furthermore, in the event that Camino completes an equity financing within 12
months after Closing at a price per share/unit that is less than CAD $0.075, the Vendors will
receive such number of additional Camino shares, issued at no cost, as would have been
issuable if the consideration shares had been issued at the price of such subsequent equity
financing. In the case of a unit financing prior to or following Closing, the Vendors will also
receive warrants or securities underlying the units in such financing, in an amount equal to
the number of consideration shares issued to the Vendors.
• First Contingent Payment: CAD $5 million cash payment (less any applicable Chilean
withholding tax) on the receipt of the earlier of: (i) (A) the applicable environmental approval
for the ~26ha expansion of the waste dump and other project infrastructure for Puquios or
(B) the environmental permit or permits for alternative site layouts that achieve the same
objective for advancement of the Project as the receipt of the applicable environmental
approval referenced in subclause (A) above would have or (ii) the date the obligation to make
the Second Contingent Payment below is triggered.
• Second Contingent Payment: CAD $5 million cash payment (less any applicable Chilean
withholding tax) on the earlier of: (i) 3 months after the date the obligation to make the First
Contingent Payment is triggered, (ii) the date of a binding agreement evidencing any loan
facility or other financing arrangement provided for the purpose of financing all or a portion
of the cost of developing, expanding, constructing or operating the Project, including any
refinancing thereof (“Project Financing”), or (iii) the date the obligation to make the Third
Contingent Payment below is triggered.
• Third Contingent Payment: CAD $5 million cash payment (less any applicable Chilean
withholding tax) on the earlier of: (i) one month after the date the obligation to make the
Second Contingent Payment is triggered; or (ii) the commencement date of earthworks (other
than preparatory earthworks with a budgeted cost of less than $10 million) associated with
the construction of a mine, processing plant or related infrastructure of the Project.
• Fourth Contingent Payment: CAD $5 million cash payment (less any applicable Chilean
withholding tax) on the earlier of: (i) 20 months after the obligation to make the Third
Contingent Payment is triggered; or (ii) the date the Project’s processing plant has operated
at greater than 80% of nameplate capacity for a period of 60 consecutive days.
• Fifth Contingent Payment: CAD $5 million cash payment (less any applicable Chilean
withholding tax) 12 months after the date the obligation to make the Fourth Contingent
Payment is triggered.
• Contingent Payments Generally: At the election of either the Vendors or Camino and Nittetsu
(with the Vendors having the deciding vote), up to 50% of all contingent payments described
above may be satisfied in Camino shares based on the 20-day VWAP prior to payment date.
In addition, the contingent payments will be secured by a share pledge of the acquired shares
of Cuprum.
• NSR Royalty: NSR royalty payable to Santiago Metals II Upper Holdco LLC quarterly on all sales
of products derived from minerals extracted from all concessions currently held by Cuprum,
regardless of where the minerals are processed. The NSR royalty: (i) will not be capped by
time, commodity, production amount or royalty paid; and (ii) will be freely transferable /
saleable by the Vendors. The NSR royalty will be 1.25% on all sales less allowable deductions.
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• Investor Rights Agreement: To be entered into at Closing, and provides Denham, via its
interests in Stellar Investment Holdings LLC and Santiago Metals Holdings II SLU, with (i)
participation rights to maintain its percentage ownership in Camino (so long as its percentage
ownership in Camino is then at least 9.9%), (ii) board representation rights – one nominee if
its percentage ownership in Camino is between 9.9%-19.9%, two nominees if its percentage
ownership in Camino is between 19.9%-24.9%, three nominees if percentage ownership in
Camino is between 24.9%-29.9%, and four nominees, and the right to nominate the chair of
the board, if percentage ownership in Camino is at least 29.9%, and (iii) after the earlier of the
first anniversary date of Closing and the closing date of Project Financing, and for as long as
the Denham‘s percentage interest in Camino is at least 9.9%, qualification rights to have its
Camino shares included in any prospectus offering of Camino, subject to certain limitations.
Until all contingent payments are made, the Camino board of directors cannot be larger than
seven directors without the Vendors’ approval.
• Conditions to Closing: In addition to the entering of the Investor Rights Agreement and royalty
agreement in respect of the NSR royalty and the provision of the share pledge referenced
above, Closing is conditional upon obtaining (i) disinterested Camino shareholder approval in
respect of the Transaction (currently expected to be presented to the Camino shareholders at
a special meeting of shareholders to held by no later than December 15, 2024), and (ii)
Exchange approval of the Transaction.
• Principals and Insiders of Camino after Closing: As of the date hereof, there are 209,251,638
Camino shares issued and outstanding. Assuming (i) no equity financing is completed prior to
Closing, (ii) 140,000,000 Camino shares are issued to the Vendors at Closing (which assumes
a price per share of CAD $0.075), and (ii) no Camino shares are issued to satisfy any contingent
payments, upon completion of the Transaction, Denham will indirectly (through the Vendors)
exercise control or direction over approximately 169,467,607 Camino shares (47.5%).
Denham’s director nominees and the composition of the directors and officers of Camino
generally post-Closing have not yet been confirmed. Camino will provide further details
regarding such individuals and their biographies once available.
• Shareholders Agreement between Camino and Nittetsu: Camino and Nittetsu have agreed to
enter into a shareholders agreement with respect to their 50/50 investment in the Project.
The shareholders agreement is in settled form and, among other things, provides for the
following:
§ Equal board representation of the Chilean purchaser entity, with the initial board
consisting of four directors. So long as the proportionate interest of each shareholder is
at least 40%, each shareholder will have the right to appoint two directors. If the
proportionate interest of one shareholder falls below 40%, then such shareholder shall
only have the right to nominate one out of four directors and the other shareholder shall
have the right to nominate three out of four directors. If the proportionate interest of a
shareholder shall fall below 15% they lose the right to representation on the board. For
so long as any contingent payments remain outstanding, the board shall allow one
nominee of the Vendors to act as a non-voting observer.
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§ The shareholder who is serving as the operator of the Project shall have the right to
appoint the chairman of the board, who shall have a casting vote on certain specified
matters that are to be considered by the shareholders.
§ Camino will act as the initial operator until there has been a project financing
commitment and a construction commencement date, whereupon Nittetsu shall act as
the operator.
§ The sale of products from the Project will be managed by the operator and each
shareholder will be entitled to purchase a percentage of available product equal to its
proportionate interest.
§ Shareholders will be required to contribute to programs and budgets as well as
emergency and unexpected expenditures pro rata or become subject to straight line
dilution. At such time as the ownership interests of a shareholder dilute to less than 10%,
the other shareholder has the right to purchase the ownership interests for a purchase
price equal to the fair market value thereof.
§ If a shareholder shall seek to sell its ownership interest, the other shareholder has tag
along rights so long as it holds a proportionate interest of between 40% and 50%.
About the Puquios Copper Project
The Project is located in the La Serena district, Region IV, Chile. The Project demonstrates excellent infrastructure
with paved highways to Punta Colorada and well maintained 45-kilometer gravel road to the site. Foundation
earthworks have been started for the process plant and the Project is in a ready state for construction, with major
permits in place. Multiple water wells, owned by Cuprum, are available to adequately supply the mine and a 23KV
power sub-station has been contracted at the nearby Barrick power facility.
About Nittetsu Mining Co., Ltd.
Nittetsu is a Japanese corporation listed on the Tokyo Stock Exchange with an 85-year history as a mining and
trading company. Nittetsu is the operator of the Atacama Kozan mine located in the prolific Candelaria-Punta del
Cobre copper district which is known to host iron-oxide-copper-gold type ore deposits. In addition, Nittetsu has
made a decision to start construction of its 80% owned Arqueros copper mine in Chile. Nittetsu has expertise in
processing, distributing, importing, and exporting copper and other mineral products. Other businesses include:
purchasing and distributing coal and petroleum products; developing and distributing equipment, machinery and
environment-related products; real estate; power generation using renewable energy; the supply and sale of
electricity; and mining and distributing industrial minerals including limestone.
About Camino Minerals Corporation
Camino is a discovery and development stage copper exploration company with a portfolio of projects located in
Peru. The Company is focused on advancing its high-grade Los Chapitos copper project through to resource
delineation, new discoveries and development. Camino has also permitted the Maria Cecilia copper porphyry
project for copper and gold exploration drilling. In addition, the Company has increased its land position at its
copper and silver Plata Dorada project. The Company seeks to acquire a portfolio of advanced copper assets that
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have the potential to deliver copper into an electrifying copper intensive global economy. For more information,
please refer to Camino’s website at www.caminocorp.com.
ON BEHALF OF THE BOARD For further information, please contact:
/S/ “Jay Chmelauskas” Camino Investor Relations
President and CEO [email protected]
Tel: (604) 493-2058
Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange
acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close
until the required shareholder approval is obtained. There can be no assurance that the Transaction will be
completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be
prepared in connection with the Transaction, any information released or received with respect to the Transaction
may not be accurate or complete and should not be relied upon. Trading in the securities of Camino should be
considered highly speculative.
The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor
disapproved the contents of this news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward Looking Statements: Certain disclosures in this release constitute forward-
looking information. In making the forward-looking disclosures in this release, the Company has applied certain
factors and assumptions that are based on the Company’s current beliefs as well as assumptions made by and
information currently available to the Company. Forward-looking information in the release includes statements
with respect to the proposed acquisition of the Project; the closing of the Transaction and satisfaction of the related
conditions to close; the anticipated synergies between Nittetsu and Camino in respect of the Project; the equity
financing; the nature of Cuprum’s business following Closing; and the Company’s aims, goals and growth plans.
Although the Company considers these assumptions to be reasonable based on information currently available to
it, they may prove to be incorrect, and the forward-looking information in this release is subject to numerous risks,
uncertainties and other factors that may cause future results to differ materially from those expressed or implied
in such forward-looking information. Such risk factors include, among others, risk that the Transaction will not be
completed as anticipated, or at all; risk that the Company will not obtain from the Exchange a waiver of the
sponsorship requirement in respect of the Transaction; risk that the equity financing will not be approved by the
Exchange or otherwise completed on terms acceptable to Camino; risk that the Company will not receive requisite
regulatory and shareholder approvals or satisfy the customary conditions in respect of the Transaction as
anticipated, or at all; risk that the anticipated synergies between Nittetsu and Camino in respect of the Project will
not be realized as contemplated, or at all; risk that actual results of the Company’s exploration activities may be
different than those expected by management; risk that the Company may be unable to obtain or will experience
delays in obtaining any required authorizations and approvals; and risks related to the state of equity and
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commodity markets. Readers are cautioned not to place undue reliance on forward-looking statements. The
Company does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-
looking statements whether as a result of new information, future events or otherwise, except as required by law.