Vancouver, British Columbia – Capstone Mining Corp. (“Capstone”) (TSX: CS) today announced its operating results for the three months ended March 31, 2013 of its two operating mines, Cozamin and Minto. Combined production totalled 18.6 million pounds of copper in concentrates, with additional by-products of zinc, silver, gold and lead.
| Copper in concentrates (thousands of pounds) | Cash cost(1) (US$/pound) | |
|---|---|---|
| Cozamin | 10,142 | $1.06 |
| Minto | 8,444 | $2.50 |
| Total | 18,586 | $1.72 |
“Both operations ran well during the first quarter,” said Darren Pylot, President and CEO of Capstone. “At Minto, our first quarter production and costs were better than planned as we successfully accommodated the pit wall failure that affected the fourth quarter of 2012. At Cozamin, we were impacted in February by water shortages; however we quickly secured additional water supplies and expect to make up any production shortfall in the second quarter.”
Operational Highlights
- Production of 18.6 million pounds of copper contained in concentrates.
- By-product production of 4.9 million pounds of zinc, 402,272 ounces of silver and 937,000 pounds of lead in concentrates. Final gold production is not available since assaying is conducted off-site, but is estimated at approximately 3,500 ounces for the quarter.
- At Cozamin, production was negatively impacted by the ongoing drought conditions in Central Mexico that affected water supplies in February. Additional short and long term sources of water were secured, and during March the mill operated at throughput rates which are expected to have production back on plan by the end of the second quarter. The copper grade was lower than expected because of a delay in mining the high grade 11C block. The area required more ground support, but mining has resumed in this block. The zinc and lead grades were higher than planned, primarily as a result of mining in alternate zones while ground support work was taking place.
Despite the lower production at Cozamin, costs on a per pound basis were in line with full year guidance, primarily because of higher by-product credits resulting from higher zinc and lead grades. - Operations at Minto ran better than planned in the first quarter. Ore that was deferred from the fourth quarter of 2012, due to the stability issues in the west pit highwall, was accessed in the first quarter and mining is now fully operational along the west wall. With mining activities advancing in the Area 2 pit and the west wall once again accessible, additional dig faces have been accessed, providing greater operating flexibility and productivity.
Costs per pound for the quarter at Minto were lower than anticipated, primarily due to higher production and the deferral of some site administrative costs for the quarter.
Q1 2013 Operating Details
| Cozamin | Minto | Q1 Total | |
|---|---|---|---|
| Production (2) (contained in concentrates) | |||
| – Copper (000s pounds) | 10,142 | 8,444 | 18,586 |
| – Zinc (000s pounds) | 4,949 | – | 4,949 |
| – Lead (000s pounds) | 937 | – | 937 |
| – Silver (ounces) | 366,523 | 35,749 | 402,272 |
| – Gold (ounces) | – | 3,502 | 3,502 |
| Mine | |||
| – Tonnes of ore mined | 296,849 | 416,502 | 713,351 |
| Mill | |||
| – Tonnes processed | 275,900 | 333,346 | 609,246 |
| – Tonnes processed per day | 3,066 | 3,704 | 6,770 |
| – Copper grade (%) | 1.80 | 1.26 | 1.50 |
| – Zinc grade (%) | 1.24 | – | 1.24 |
| – Lead grade (%) | 0.25 | – | 0.25 |
| – Silver grade (g/t) | 58.0 | 4.3 | 28.6 |
| – Gold grade (g/t) | – | 0.42 | 0.42 |
| Recoveries | |||
| – Copper (%) | 92.7 | 91.1 | 91.8 |
| – Zinc (%) | 65.6 | – | 65.6 |
| – Lead (%) | 62.6 | – | 62.6 |
| – Silver (%) | 71.3 | 78.3 | 71.9 |
| – Gold (%) | – | 78.6 | 78.6 |
| Concentrates (2) | |||
| – Copper concentrates (dmt) | 17,328 | 10,675 | 28,003 |
| Copper (%) | 26.5 | 35.9 | 30.1 |
| Silver (g/t) | 548 | 104 | 379 |
| Gold (g/t) | – | 10.2 | 10.2 |
| – Zinc concentrates (dmt) | 4,681 | – | 4,681 |
| Zinc (%) | 48.0 | – | 48.0 |
| – Lead concentrates (dmt) | 715 | – | 715 |
| Lead (%) | 59.5 | – | 59.5 |
| Silver (g/t) | 2,672 | – | 2,672 |
| Payable copper produced (000s lbs) | 9,711 | 8,170 | 17,811 |
| Cash cost per pound of payable copper1 (US$) | $1.06 | $2.50 | $1.72 |
(1) Please see “Alternative Performance Measure” at the end of this release. (2) Adjustments based on final settlements will be made in future periods.
Outlook
Capstone’s 2013 guidance for 85 million pounds ± 5% of copper in concentrates, at a total cash cost(1) of US$1.65 to US$1.75 per pound of payable copper, net of by-product credits and selling costs, remains unchanged.
Q1 Financial Results Timing
Capstone will report 2013 first quarter financial results on Wednesday, May 8, 2013 after market close, followed by a conference call and webcast for investors and analysts on Thursday, May 9, 2013 at 11:30 am Eastern Time (8:30 am Pacific Time).
Conference Call and Webcast Details
| Date: | Thursday, May 9, 2013 | |
| Time: | 11:30 am Eastern Time — 8:30 am Pacific Time | |
| Dial in: | North America: 1-888-390-0605, International: +416-764-8609 | |
| Webcast: | http://www.newswire.ca/en/webcast/detail/1134543/1237395 | |
| Replay: | North America: 1-888-390-0541, International: +416-764-8677 | |
| Replay Passcode: | 378784 |
The conference call replay will be available until May 23, 2013. 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, committed to the responsible development of our assets and the environments in which we operate. We are preferentially focused on copper, with two producing copper mines, the Cozamin copper-silver-zinc-lead mine located in Zacatecas State, Mexico and the Minto copper-gold-silver mine in Yukon, Canada. In addition, Capstone has two development projects, the large scale 70% owned Santo Domingo copper-iron-gold project in Chile in partnership with Korea Resources Corporation and the 100% owned Kutcho copper-zinc-gold-silver project in British Columbia, as well as exploration at properties in Canada, Chile, Mexico and Australia. Using our cash flow and strong balance sheet as a springboard, Capstone aims to grow with continued mineral resource and reserve expansions, exploration, and through acquisitions in politically stable, mining-friendly regions. Our headquarters are in Vancouver, Canada and we are listed on the TSX. Further information is available at www.capstonemining.com.
For further information please contact:
Cindy Burnett, VP, Investor Relations and Communications
604-637-8157
[email protected]
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 Capstone Mining Corp. (the “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 “scheduled”, “guidance”, “plan”, “planned”, “estimated”, “projections”, “projected” and “expected”. 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 mineral 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 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. There can be 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 reviewed and approved by 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 disclosure of the Technical Information contained in this news release has been reviewed and approved by John Wright, P. Eng., Business Development Manager, a Qualified Person under NI 43-101. In addition, Gregg Bush, Senior Vice President and Chief Operating Officer reviewed all Technical Information in this news release.
Alternative Performance Measure
The item marked with a (1) “Cash Cost per Pound of Payable Copper” is an Alternative Performance Measure. This performance measure is included because this statistic is a key performance measure that management uses to monitor performance. Management uses this statistic to assess how the Company is performing to plan and to assess the overall effectiveness and efficiency of mining operations. This performance measure does not have a meaning within IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. This performance measure should not be considered in isolation as a substitute for measures of performance in accordance with IFRS.
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 uses 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.
