Capstone Copper has agreed to sell its copper-silver-zinc-lead mine in Mexico to Luca Mining for up to $385 million, as the company drives to streamline its asset base and deploy capital into higher-margin copper growth projects.

In return for the Cozamin mine in Zacatecas, Capstone will receive $275 million in upfront cash, $15 million in Luca shares and $35 million in deferred consideration. Capstone will also receive up to $60 million in contingent earn-outs tied to future copper prices.

Capstone said it plans to use the cash to strengthen the company's balance sheet and offer added flexibility as it moves closer to becoming a focused tier-one growth producer.

Chief Executive Cashel Meagher said the transaction optimizes the company's portfolio and strengthens the balance sheet as it looks to redeploy capital into high-return growth projects and to focus on opportunities aimed at creating the most value for shareholders.

"It is an ideal time to streamline our portfolio through this divestiture as we advance toward transformational copper growth in Chile and the United States," Meagher said.

On Luca's side, the acquisition scales the company's footprint in Mexico. This is the second acquisition in recent days by Luca in Mexico. Last week, the company signed a deal with Agnico Eagle Mines to buy the El Barqueno property in Jalisco for up to $60 million.

The Cozamin mine transaction is expected to close in the fourth quarter of the year.