(All amounts in US$ unless otherwise specified)
VANCOUVER, May 7, 2014 /CNW/ - Capstone Mining Corp. ("Capstone") (TSX: CS) today announced its
financial results for the three months ended March 31, 2014, posting a
loss of $4.4 million due to a non-cash ore stockpile write-down.
Operating cash flow before changes in working capital(1) was $47.1 million compared to $20.1 million in the first quarter of
2013. Copper production for the quarter at Capstone's three operating
mines, Pinto Valley, Cozamin and Minto, totalled 27,644 tonnes of
copper in concentrates and cathode (26,635 tonnes of payable copper) at
a C1 cash cost(1) of $1.89 per payable pound of copper produced.
Capstone will hold a conference call and webcast on Thursday, May 8,
2014 at 11:30 am Eastern Time (8:30 am Pacific Time) to discuss these
results; call-in details are provided at the end of this release. This release should be read in conjunction with Capstone's unaudited
condensed interim consolidated financial statements and management's
discussion and analysis ("MD&A") for the three months ended March 31,
2014, which are available on Capstone's website at: http://capstonemining.com/s/financial-statements.asp and on SEDAR. An updated corporate presentation, including results to
March 31, 2014, will also be available at http://capstonemining.com/s/presentations.asp.
NOTE: The transaction to acquire the Pinto Valley Mine closed on October 11,
2013 and therefore its results of operations are included in the
Company's reported results from that date forward. As such, there are
no comparable Q1 2013 figures for the Pinto Valley Mine.
Revenue ($ millions)
Copper in concentrates produced (tonnes)
Copper cathode produced (tonnes)
Payable copper produced (tonnes)
C1 cash cost per payable pound of copper produced(1) ($)
Copper sold (tonnes)
Realized copper price per pound sold ($)
Net (loss) earnings ($ millions)
Net (loss) earnings per common share ($)
Adjusted EBITDA(1) ($ millions)
Adjusted EBITDA(1) per common share ($)
Operating cash flow before changes in working capital(1) ($ millions)
Operating cash flow before changes in working capital per common share(1) ($)
Net debt (cash)(1) ($ millions)
"With all three of our mines operating very well in the first quarter,
we generated operating cash flow before changes in working capital of
$47 million," said Darren Pylot, President and CEO of Capstone. "That
strong cash flow allowed us to reduce our net debt to $175 million,
while retaining a cash balance of $136 million."
"We marked a significant milestone in the first quarter with the Pinto
Valley pre-feasibility study extending the mine life an additional
eight years to 2026," continued Mr. Pylot. "With the mine life
confirmed and the operation now stabilized at its targeted run rate, we
can fully turn our attention to efficiencies at the mine and commence
our planning for the potential long-term operation beyond 12 years."
Financial and Production Highlights for the Three Months Ended March 31,
Net loss of $4.4 million or $0.01 per common share which included:
Earnings from mining operations of $17.1 million,
Realized copper price of $3.09 per pound.
Production costs included a $10.0 million non-cash charge related to the
write-down of ore stockpile inventory at Minto,
$7.8 million tax expense.
Adjusted EBITDA(1) of $55.5 million or $0.15 per common share after making adjustments for
certain non-cash and other items.
Operating cash flow before changes in working capital(1) of $47.1 million or $0.13 per common share.
Working capital increased to $140.3 million at March 31, 2014 (which included $135.7 million of cash
and cash equivalents) from $137.4 million at December 31, 2013.
Production of 26,658 tonnes of payable copper at a C1 cash cost(1) of $1.89 per pound of payable copper produced.
Revenue of $160.8 million generated primarily from the sale of 26,601
tonnes of payable copper.
Operational Highlights for the Three Months Ended March 31, 2014
Pinto Valley Mine:
Produced 16,701 tonnes of copper in concentrates and 621 tonnes of
copper cathode at a C1 cash cost(1) of $2.06 per pound of payable copper, a 20 cent per pound reduction
relative to the fourth quarter of 2013. This trend is expected to
continue as the operation completes its ramp-up, begins to take
advantage of the conversion to its own operating system at the end of
February and gathers momentum from productivity improvement initiatives
begun following the transaction in Q4 2013.
Completed the Pinto Valley Phase 2 prefeasibility study ("PV2 PFS") in
March 2014, extending the mine life at Pinto Valley to 2026, at an
average annual production of 54,200 tonnes of copper in concentrate and
2,900 tonnes of copper cathode, at a C1 cash cost(1) of $2.00 per pound of payable copper.
Produced 5,101 tonnes of copper in concentrates at a C1 cash cost(1) of $1.23 per pound of payable copper, demonstrating an ability to
control on-site cost inflation and maintain its second quartile cost
Produced 5,221 tonnes of copper in concentrates at a C1 cash cost(1) of $1.94 per pound of payable copper as compared to $2.50 per pound in
Q1 2013 as a result of strong throughput, better grades and effective
Santo Domingo Project:
Work on the Feasibility study ("FS") and engineering continued, with the
FS on target for completion mid-year 2014.
Exploration work continued during Q1 2014 at both the Project
Providencia in Region II, Chile and the Cumbral Project (Westminster
Resources Ltd. Option) in Sonora, Mexico. Capstone is now in receipt of
the airborne magnetic, VTEM and radiometric surveys and is executing a
large ground follow-up program of mapping and geochemistry at
Providencia while diamond drilling commenced at the Cumbral porphyry
Capstone's 2014 guidance for 102,000 tonnes ±5% of copper in
concentrates and 2,800 tonnes of cathode, at a C1 cash cost(1) of $1.90 to $2.00 per pound of payable copper, net of by-product
credits and selling costs, remains unchanged.
Conference Call and Webcast Details
Capstone will host a conference call and webcast on Thursday, May 8,
2014 at 11:30 am Eastern Time (8:30 am Pacific Time).
Thursday, May 8, 2014
11:30 am Eastern Time (8:30 am Pacific Time)
North America: 1-888-390-0546, International: +416-764-8688
North America: 1-888-390-0541, International: +416-764-8677
The conference call replay will be available until May 22, 2014. The
conference call audio and transcript will be available on Capstone's
website within approximately 24 hours of the call at http://capstonemining.com/s/conference-calls.asp.
About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian base metals mining company, focused
on copper. We are committed to the responsible development of our
assets and the environments in which we operate. Our three producing
mines are the Pinto Valley copper mine located in Arizona, US, the
Cozamin copper-silver mine in Zacatecas State, Mexico and the Minto
copper mine in Yukon, Canada. In addition, Capstone has two copper
development projects; the large scale 70% owned copper-iron Santo
Domingo project in Region III, Chile, in partnership with Korea
Resources Corporation, and the 100% owned copper-zinc Kutcho project in
British Columbia, Canada, as well as exploration properties in Chile
and Mexico. Using our cash flow and strong balance sheet as a platform,
Capstone's strategy is to continue to grow with mineral resource and
reserve expansions and exploration, and through acquisitions in
politically stable, mining-friendly regions. We will pace our growth
with our financial capacity, ensuring we retain, as a priority,
sufficient financial flexibility to meet the requirements of our
existing operations and our committed development projects, while
maintaining an adequate cushion to deal with market volatility and
operating risks inherent in the mining industry. Our headquarters are
in Vancouver, Canada and we are listed on the Toronto Stock Exchange
(TSX). Further information is available at www.capstonemining.com.
Cautionary Note Regarding Forward-Looking Information
This document may contain "forward-looking information" within the
meaning of Canadian securities legislation and "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995 (collectively, "forward-looking
statements"). These forward-looking statements are made as of the date
of this document and Company does not intend, and does not assume any
obligation, to update these forward-looking statements, except as
required under applicable securities legislation.
Forward-looking statements relate to future events or future performance
and reflect Company management's expectations or beliefs regarding
future events and include, but are not limited to, statements with
respect to the estimation of mineral reserves and mineral resources,
the realization of mineral reserve estimates, the timing and amount of
estimated future production, costs of production, capital expenditures,
success of mining operations, environmental risks, unanticipated
reclamation expenses, title disputes or claims and limitations on
insurance coverage. In certain cases, forward-looking statements can be
identified by the use of words such as "plans", "expects" or "does not
expect", "is expected", "outlook", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved" or the negative of these
terms or comparable terminology. In this document, certain
forward-looking statements are identified by words including "may",
"future", "expected", "intends" and "estimates". By their very nature
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements. Such factors include, among
others, risks related to actual results of current exploration
activities; changes in project parameters as plans continue to be
refined; future prices of resources; possible variations in ore
reserves, grade or recovery rates; accidents, dependence on key
personnel, labour pool constraints, labour disputes; availability of
infrastructure required for the development of mining projects; delays
in obtaining governmental approvals or financing or in the completion
of development or construction activities; and other risks of the
mining industry as well as those factors detailed from time to time in
the Company's interim and annual financial statements and management's
discussion and analysis of those statements, all of which are filed and
available for review under the Company's profile on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that
could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results not to be as anticipated,
estimated or intended. The Company provides no assurance that
forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue reliance
on forward-looking statements.
National Instrument 43-101 Compliance
Unless otherwise indicated, Capstone has prepared the technical
information in this news release ("Technical Information") based on
information contained in the technical reports, news releases and
MD&A's (collectively the "Disclosure Documents") available under
Capstone Mining Corp.'s company profile on SEDAR at www.sedar.com. Each Disclosure Document was prepared by, or under the supervision of,
a qualified person (a "Qualified Person") as defined in National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101"). Readers are
encouraged to review the full text of the Disclosure Documents which
qualifies the Technical Information. Readers are advised that mineral
resources that are not mineral reserves do not have demonstrated
economic viability. The Disclosure Documents are each intended to be
read as a whole, and sections should not be read or relied upon out of
context. The Technical Information is subject to the assumptions and
qualifications contained in the Disclosure Documents.
The technical information in this news release ("Technical Information")
was prepared by, or under the supervision of, a qualified person (a
"Qualified Person") as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101"). The disclosure
of the Technical Information contained in this news release has been
reviewed and approved by Brad Skeeles, P. Eng., Vice President of North
American Operations, Brad Mercer, P. Geol., Vice President, Exploration
(Technical Information related to mineral exploration activities), and
Gregg Bush, P. Eng., Senior Vice President and Chief Operating Officer,
all Qualified Persons under NI 43-101.
Alternative Performance Measures
The items marked with a "(1)" are alternative performance measures and readers should refer to
Alternative Performance Measures in the Company's Interim Management's
Discussion and Analysis for the year ended March 31, 2014 as filed on
SEDAR and as available on the Company's website for further details.
Cautionary Note to United States Investors
This news release contains disclosure that has been prepared in
accordance with the requirements of Canadian securities laws, which
differ from the requirements of U.S. securities laws. Without limiting
the foregoing, this news release may refer to technical reports that
use the terms "indicated" and "inferred" resources. U.S. investors are
cautioned that, while such terms are recognized and required by
Canadian securities laws, the SEC does not recognize them. Under U.S.
standards, mineralization may not be classified as a "reserve" unless
the determination has been made that the mineralization could be
economically and legally produced or extracted at the time the reserve
determination is made. U.S. investors are cautioned not to assume that
all or any part of indicated resources will ever be converted into
reserves. U.S. investors should also understand that "inferred
resources" have a great amount of uncertainty as to their existence and
as to whether they can be mined legally or economically. It cannot be
assumed that all or any part of "inferred resources" will ever be
upgraded to a higher category. Therefore, U.S. investors are also
cautioned not to assume that all or any part of inferred resources
exist, or that they can be mined legally or economically. Accordingly,
information concerning descriptions of mineralization and resources
contained in this news release may not be comparable to information
made public by U.S. companies subject to the reporting and disclosure
requirements of the SEC.
(1) These are alternative performance measures; please see "Alternative
Performance Measures" at the end of this release.
SOURCE: Capstone Mining Corp.
For further information:
Cindy Burnett, VP, Investor Relations and Communications