Capstone Acquires Far West Mining, Forms Partnership

Capstone Mining Corp. (“Capstone”) acquired all of the issued and outstanding common shares of Far West Mining Ltd. (“Far West”) pursuant to a statutory plan of arrangement, effective June 17, 2011.

The aggregate value of the consideration paid for Far West by Capstone at the announcement date was approximately $710 million.

Far West is now held through a newly formed subsidiary of Capstone, owned 70 per cent by Capstone and 30 per cent by Korea Resources Corporation (“KORES”).

Concurrent with the completion of the arrangement, KORES acquired a 30 per cent interest in the entity that owns Far West for cash consideration of approximately $195 million to Capstone, and subscribed for approximately 40.2 million common shares of Capstone, representing an approximate 11 per cent interest in Capstone, for aggregate cash consideration of approximately $175 million.

Blake, Cassels & Graydon LLP acted as counsel to Capstone, with a team that included Bob Wooder, Steven McKoen, Maninder Malli and Mischa Zajtmann (corporate/securities); Kevin Zimka (tax); Jason Gudofsky (competition); David Zacks and Bahar Hafizi (financial services) and Sean Boyle (litigation).

Davis LLP acted as counsel to Far West, with a team that included David Reid, Don Collie, Ruby Chan and Elaine Tham (corporate/securities); Brent MacLean (litigation) and Michael Coburn (tax).

Fred Pletcher and Shantela Blaeser of Borden Ladner Gervais LLP acted as counsel to the Special Committee of the board of directors of Far West.

Stikeman Elliott LLP acted as counsel to KORES, with a team that included Jay Kellerman, John Anderson, Jennifer Honeyman and Shelley Balshine (corporate/securities); Francesco Gucciardo (tax) and Shawn Neylan (regulatory).


Shantela M. Blaeser Elaine Tham Fred R. Pletcher Kevin Zimka Bob J. Wooder Donald R. Collie Jennifer Honeyman Jason L. Gudofsky John F. Anderson Michael R. Coburn Jay C. Kellerman Shawn C.D. Neylan David R. Reid Maninder Malli Ruby Chan Francesco G. Gucciardo Bahar Hafizi Steven R. McKoen Sean K. Boyle David A. Zacks Shelley M. Balshine J. Brent MacLean