December 19, 2012
Forecast Production of 85 Million Pounds of Copper in Concentrates (All amounts in US$ unless otherwise specified)
Capstone Mining Corp. ("Capstone") (TSX: CS) today provided its production guidance for 2013 for its two operating mines, Cozamin and
, and company-wide capital expenditure guidance. Capstone expects to produce 85 million pounds ±5% of copper in concentrates at a total cash cost
$1.65 to $1.75
per pound of payable copper, net of by-product credits and selling costs.
"Capstone's focus for 2013 is to maintain steady production and optimize operations at our two operating mines and advance our two development projects towards production," said
, President and CEO of Capstone. "With a 10-year mine life in reserves at
and nine years at Cozamin, our capital investment is focused on on-going development and upgrades at both mines. At Santo Domingo, we will complete various trade-off studies and pursue a port agreement, both of which will feed into the Bankable Feasibility Study. At Kutcho we will file the Environmental Assessment in 2013 that starts the formal permitting process."
2013 Production Guidance
Cozamin Minto Total
Tonnes milled (millions) 1.2 1.4 2.6
Copper grade (%) 1.91 1.48 1.68
Copper recovery (%) 92.9 92.8 92.9
Production (contained in concentrates)
Copper (million lbs) 44 41 85
Zinc (million lbs) 18 - 18
Lead (million lbs) 3.8 - 3.8
Gold (ounces) - ~18,300 ~18,300
Silver (million ounces) 1.8 0.2 2.0
Total cash costs per pound of payable
copper(1) $1.00-$1.10 $2.30-$2.40 $1.65-$1.75
Mining in the Avoca zone will be completed in 2013 and production will be coming primarily from lower levels, which are lower grade and volume than the Avoca zone. New development will be centered in the 12W and 14C stopes, which along with the Mala Noche Footwall Zone (expected to contribute approximately 11% of ore production in 2013 at an average grade of 2.21%), are the highest grade areas of the mine.
The mill is expected to process ore from the Area 2/118 pit for the full year 2013, supplemented by ore from the underground development starting in the third quarter of 2013.
has received regulatory approval to increase mill throughput, and now has the flexibility to increase up to 1.5 million tonnes per year, effective
December 6, 2012
Cash costs for 2013 are budgeted to be higher than 2012 due to the addition of underground mining costs at
. Cash costs will be significantly higher in the first half of the year at
due to the immediate recognition of the mining costs associated with low grade ore (reserve grade ore that is less than 1% copper, including low grade partially oxidized ore). Lower cash costs in the second half of the year will be driven by higher grade ore that will be accessed both from the Area 2/118 open pit as well as from the underground workings.
2013 Capital Expenditure Guidance - Operating Mines
Cozamin Minto Total
2013 Budgeted Capital Expenditures (excluding
exploration) $15.3 $49.4 $64.7
Major capital expenditures at Cozamin include
for underground development,
in underground equipment,
for a tailings lift, and
for installation of a paste backfill plant that was deferred from 2012.
Major capital expenditures at
in underground development,
for underground equipment,
for renovations to the camp and other site upgrades (partially carried from 2012),
to purchase drills for owner open pit drilling,
to optimize crushing and replace contract crushing in the mill, and
in permitting and environmental activities related primarily to the joint Phase V/Phase VI Yukon Environmental and Socio-economic Assessment Board ("YESAB") application, intended to assess the impacts of bringing all remaining known reserves at
into the mine plan. The underground development in 2013 will be performed by a contractor, with Capstone planning to take over operation of underground mining in 2014.
2013 Capital Expenditure Guidance - Development Projects
Santo Domingo (100% basis) $24.5
Development activities at
for 2013 will include substantial completion of a Bankable Feasibility Study ("BFS") and basic engineering, preparation and filing of an Environmental Impact Study ("EIS") and a number of trade-off studies that are planned or underway. The BFS was originally targeted for completion in the first quarter of 2013. However, given the current state of the electricity market in
, at this time reasonable rates for electric power are not expected to be available until 2017-2018. As a result, Capstone has chosen to modify the project timeline to more closely align with power availability. The revised date for completion of the study will be the first quarter of 2014 and will incorporate a number of optimizations and trade-off studies. The EIS was completed as originally planned; however starting the formal assessment has been delayed to allow incorporation of potential project improvements and the port location.
Development activities at Kutcho for 2013 will include filing the Environmental Assessment in mid-2013, consultations with First Nations with respect to advancing towards Impact Benefit Agreements and camp development.
2013 Exploration Program
Cozamin $ 4.5
North American Earn-In Projects 2.9
Chile and Australia 1.0
Total $ 8.6
Brownfield exploration at
will pause for 2013 as the mine life currently exceeds 10 years and the most compelling targets will be accessed from underground once the ramp reaches an optimum point to resume drilling. Underground drilling at Cozamin in 2013 of 20,000 metres will target the edges of the Mala Noche and Mala Noche Footwall reserve areas, with a focus on adding to the nine-year mine life currently in reserves. Greenfield exploration will be directed towards drill testing targets at earn-in properties in
(9,000 metres) and continued drill testing and geophysics on properties in
About Capstone Mining Corp.