Forecast Production of 85 Million Pounds of Copper in
Concentrates
(All amounts in US$ unless otherwise specified)
VANCOUVER, Dec. 19, 2012 /PRNewswire/ - Capstone Mining
Corp. ("Capstone") (TSX: CS) today provided its production guidance
for 2013 for its two operating mines, Cozamin and Minto, and company-wide capital expenditure
guidance. Capstone expects to produce 85 million pounds ±5%
of copper in concentrates at a total cash cost(1) of
$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 Darren Pylot, President and CEO of
Capstone. "With a 10-year mine life in reserves at
Minto 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-$1.75
|
Cozamin: Mining in the Avoca zone will be completed in
2013 and production will be coming primarily from lower levels,
which are lower grade and volume than the Avoca zone. New
development will be centered in the 12W and 14C stopes, which along
with the Mala Noche Footwall Zone (expected to contribute
approximately 11% of ore production in 2013 at an average grade of
2.21%), are the highest grade areas of the mine.
Minto: The mill is
expected to process ore from the Area 2/118 pit for the full year
2013, supplemented by ore from the underground development starting
in the third quarter of 2013. Minto has received regulatory approval to
increase mill throughput, and now has the flexibility to increase
up to 1.5 million tonnes per year, effective December 6, 2012.
Cash costs for 2013 are budgeted to be higher than 2012 due to
the addition of underground mining costs at Minto. Cash costs will be significantly higher
in the first half of the year at Minto due to the immediate recognition of the
mining costs associated with low grade ore (reserve grade ore that
is less than 1% copper, including low grade partially oxidized
ore). Lower cash costs in the second half of the year will be
driven by higher grade ore that will be accessed both from the Area
2/118 open pit as well as from the underground workings.
2013 Capital Expenditure Guidance - Operating Mines
|
Cozamin |
Minto |
Total |
|
(US$ millions) |
2013 Budgeted Capital Expenditures (excluding
exploration) |
$15.3 |
$49.4 |
$64.7 |
Major capital expenditures at Cozamin include $5.2 million for underground development,
$3.1 million in underground
equipment, $2.0 million for a
tailings lift, and $2.0 million for
installation of a paste backfill plant that was deferred from
2012.
Major capital expenditures at Minto include $19.1
million in underground development, $8.3 million for underground equipment,
$6.4 million for renovations to the
camp and other site upgrades (partially carried from 2012),
$1.7 million to purchase drills for
owner open pit drilling, $1.3 million
to optimize crushing and replace contract crushing in the mill, and
$5.1 million in permitting and
environmental activities related primarily to the joint Phase
V/Phase VI Yukon Environmental and Socio-economic Assessment Board
("YESAB") application, intended to assess the impacts of bringing
all remaining known reserves at Minto into the mine plan. The underground
development in 2013 will be performed by a contractor, with
Capstone planning to take over operation of underground mining in
2014.
2013 Capital Expenditure Guidance - Development
Projects
|
(US$ millions) |
Santo Domingo (100% basis) |
$24.5 |
Kutcho |
7.9 |
Total |
$32.4 |
Santo Domingo, Chile: Development activities at
Santo Domingo for 2013 will
include substantial completion of a Bankable Feasibility Study
("BFS") and basic engineering, preparation and filing of an
Environmental Impact Study ("EIS") and a number of trade-off
studies that are planned or underway. The BFS was originally
targeted for completion in the first quarter of 2013. However,
given the current state of the electricity market in Chile, at this time reasonable rates for
electric power are not expected to be available until
2017-2018. As a result, Capstone has chosen to modify the
project timeline to more closely align with power availability. The
revised date for completion of the study will be the first quarter
of 2014 and will incorporate a number of optimizations and
trade-off studies. The EIS was completed as originally planned;
however starting the formal assessment has been delayed to allow
incorporation of potential project improvements and the port
location.
Kutcho, BC: Development activities at Kutcho for 2013 will
include filing the Environmental Assessment in mid-2013,
consultations with First Nations with respect to advancing towards
Impact Benefit Agreements and camp development.
2013 Exploration Program
|
(US$ millions) |
Cozamin |
$ 4.5 |
Minto |
0.2 |
North American Earn-In Projects |
2.9 |
Chile and Australia |
1.0 |
Total |
$ 8.6 |
Brownfield exploration at Minto
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 North America (9,000 metres) and continued
drill testing and geophysics on properties in Chile and Australia (3,000 metres).
About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian base metals mining company,
preferentially focussed 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. Capstone also has ongoing
exploration at properties in Canada, Chile, Mexico
and Australia. Using its cash flow
and strong balance sheet as a springboard, Capstone aims to grow
organically through continued mineral resource and reserve
expansions, exploration, and through acquisitions in politically
stable, mining-friendly regions. Additional 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 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 "guidance", "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 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 disclosure of the Technical Information contained in this
news release has been reviewed and approved by John Wright, P. Eng., Capstone's Business
Development Manager (Technical Information related to mining and
production) and Brad Mercer, P.
Geol., Capstone's Vice President, Exploration (Technical
Information related to mineral exploration activities), both
Qualified Persons under NI 43-101. In addition, Gregg Bush, Senior Vice President and Chief
Operating Officer for Capstone reviewed all Technical Information
in this news release.
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 three and nine months ended
September 30, 2012 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 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
press release may not be comparable to information made public by
U.S. companies subject to the reporting and disclosure requirements
of the SEC.
(1) The items marked with a "1" are alternative performance
measures; please see "Alternative Performance Measures" at the end
of this release.
SOURCE Capstone Mining Corp.