Luca Mining (TSXV: LUCA) agreed to acquire Capstone Copper’s (TSX: CS) Cozamin mine in Zacatecas, Mexico, for as much as $385 million.
The transaction includes $275 million in cash at closing, $15 million in Luca shares, $35 million payable one year later, and up to $60 million in copper-price-linked payments.
Those contingent payments make part of Capstone’s final price dependent on copper staying considerably higher. Luca would owe annual payments in 2027 through 2029 when the average LME cash copper price reaches at least $7.00 per pound, rising to $20 million for a year averaging at least $8.51 per pound.
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Benchmark three-month LME copper traded around $14,654 per metric tonne, or roughly $6.65 per pound, on Monday, according to Reuters.
Luca has assembled a $300 million financing package for the acquisition, including $150 million of equity financing and private placements, a $125 million senior secured acquisition facility, and a $25 million additional silver stream with Wheaton Precious Metals.
The debt carries a four-year term. A $75 million tranche bears 8.5% annual interest, while the remaining $50 million is priced at SOFR plus 4.9%. Luca will also issue Taurus Mining Finance and Macquarie 21.5 million warrants exercisable at $1.20.
As part of that loan facility, Luca will hedge 25% of forecast Cozamin copper sales for 36 months beginning in 2027 using forward LME copper contracts with Macquarie.
The structure effectively gives lenders greater visibility on cash generation while Luca absorbs a much larger operating footprint.
Cozamin produced 25,348 tonnes of copper in 2025 at C1 cash costs of $1.32 per payable pound. Capstone’s historical plan extends operations through 2030, although Luca has not yet adopted that plan.
Luca said the acquisition should more than double its 2027 production profile. Based on figures cited by the company, the combined business is expected to generate approximately $598 million in 2027 net revenue and $223 million in operating cash flow, compared with Luca’s $177 million of revenue and $37 million of operating cash flow in 2025.
Closing is expected in Q4 2026, subject to TSX Venture Exchange and Mexican antitrust approvals.
Luca Mining last traded at $1.04 on the TSX Venture while Capstone Copper last traded at $14.49 on the TSX.
