VANCOUVER, BRITISH COLUMBIA (TSX: CS) announces its financial
results for the four month stub period ending December 31, 2007
including production and sales for the Cozamin mine located in
Zacatecas State, Mexico. All dollar amounts are stated in U.S.
dollars unless otherwise indicated.
Overview and Highlights
For the four months ended December 31, 2007, Capstone's
earnings, before future income tax allowance were $16.8 million or
$0.21 per share ($0.20 per share diluted), and earnings, after
future income tax allowance, a non-cash item, were $10.4 million or
$0.13 per share ($0.12 per share diluted).
- Revenue for the four months ended December 31, 2007 was $33.0
million. The average realized price for sales of copper, zinc, lead
and silver in the four months was $3.09/lb, $1.07/lb, $1.24/lb and
$8.40/oz respectively.
- Copper production during the four months ended December 31,
2007 was 9.0 million lbs compared with 13.9 million lbs for the 12
months ended August 31 2007 (65% of the previous 12 month
period).
- At December 31, 2007, Capstone had working capital of $51.7
million including $25 million in cash, $8.1 million in marketable
securities, current receivables of $14.9 and no bank debt, in
addition the fair market value of Capstone's share ownership of
Silverstone Resources Corp. as of today is approximately $90
million, which is not included in working capital.
- Copper cash costs for the four months ended December 31, 2007
were $0.96/lb of copper (net of by-product credits and including
smelter, refining, transportation and all site costs).
- Total costs (the aggregate of cash costs, royalty, depletion
and amortization and accretion) for the four months ended December
31, 2007 were $1.16/lb.
- Capstone continued its share buyback plan and purchased an
additional 815,500 common shares on the open market at an average
price of CDN$2.76. The shares have been returned to treasury and
cancelled under its normal course issuer bid.
- During the four month stub period the Cozamin mine operated at
its current designed throughput rate of 2,200 tpd.
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4 months ended Year ended
December 31, 2007 August 31, 2007
------------------------------------------------------------------------
------------------------------------------------------------------------
Revenue $33.0M $55.3M
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Copper $26.5M $37.7M
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Zinc $ 1.5M $ 8.0M
------------------------------------------------------------------------
Lead $ 1.9M $ 2.7M
------------------------------------------------------------------------
Silver $ 3.1M $ 6.9M
------------------------------------------------------------------------
Operating profit $16.8M $27.2M
------------------------------------------------------------------------
Earnings (before future tax) $16.8M $25.2M
------------------------------------------------------------------------
EPS - basic (before future tax) $ 0.21 $ 0.31
------------------------------------------------------------------------
Earnings (after future taxes) $10.4M $22.7M
------------------------------------------------------------------------
EPS - basic $ 0.13 $ 0.28
------------------------------------------------------------------------
Cozamin Mine
4 Months Ended December 31, 2007 Production and Sales
Highlights
- Capstone produced the following metals during the year.
- 9.0 million pounds of copper
- 2.5 million pounds of zinc
- 1.6 million pounds of lead
- 414,000 ounces of silver
- Concentrate sales for the period were dry metric tonnes
("DMT"), containing;
- 8.6 million pounds of copper
- 1.4 million pounds of zinc
- 1.5 million pounds of lead
- 377,000 ounces of silver
Concentrate inventory at December 31, 2007 was 9,793 DMT
(containing 2.8 million pounds of copper, 2.9 million pounds of
zinc and 0.5 million pounds of lead).
December 31, 2007 Production Results and Forecast for 2008 and 2009
------------------------------------------------------------------
2008 (F) 2009 (F)
------------------------------------------------------------------
Total tons milled 850,000 1,000,000
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------------------------------------------------------------------
Copper (payable lbs) 30,000,000 40,000,000
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Silver (payable ounces) 1,300,000 1,500,000
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Zinc (payable lbs) 9,000,000 10,000,000
------------------------------------------------------------------
Lead (payable lbs) 5,100,000 5,000,000
------------------------------------------------------------------
The following table is a summary of the actual operating statistics for
the four months ended December 31, 2007 and the year ended August 31, 2007.
---------------------------------------------------------------------------
4 months
ended Year ended
Dec 31, 2007 Aug 31, 2007
---------------------------------------------------------------------------
Total tons mined 251,716 484,641
---------------------------------------------------------------------------
Tons of ore milled 260,714 461,933
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Copper grade (%) 1.79 1.59
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Zinc grade (%) 1.24 1.47
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Silver grade (g/t) 69 71
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Lead grade (%) 0.52 0.6
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Copper recovery (%) 87.1 86
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Zinc recovery (%) 41.3 44.9
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Silver recovery (%) 73.3 73
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Lead recovery (%) 49.8 52.6
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Copper production (million DMT lbs) 9.0 13.9
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Zinc production (million DMT lbs) 2.5 6.8
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Silver production ('000 ounces) 414 747
---------------------------------------------------------------------------
Lead production (million DMT lbs) 1.6 3.0
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Note: Silver reports to all concentrates.
Stub Four Month Period Production Highlights
Copper
- Copper in concentrate produced during the four month period
was 9.0 million pounds of copper, year ended August 31, 2007 was
13.9 million.
- Copper concentrate sales for the period were 18,277 dry metric
tons ("DMT"), containing 8.6 million pounds of copper, year ended
August 31, 2007 was 11.8 million.
- The average price for sales of copper in the period was
$3.09/lb.
- Copper concentrate inventory at December 31, 2007 was 5,631
DMT, an increase in inventory from the 5,447 DMT of concentrate on
hand at August 31, 2007.
- Silver in the copper concentrate produced during the period
totaled 335,000 ounces.
Zinc
- Zinc in concentrate produced during the four month period was
2.5 million pounds of zinc, year ended August 31, 2007 was 6.8
million.
- Zinc sales for the period were 1,799 DMT, containing 1.4
million pounds of zinc, year ended August 31, 2007 was 5.0
million.
- The average price for sales of zinc in the period was
$1.07/lb.
- Zinc concentrate inventory at December 31, 2007 was 3,804 DMT,
an increase in inventory from the 2,413 DMT of concentrate on hand
at August 31, 2007.
- Silver in the zinc concentrate produced during the period
totaled 12,000 ounces.
Lead
- Lead in concentrate produced during the four month period was
1.6 million pounds of lead, year ended August 31, 2007 was 3.0
million.
- Lead concentrate sales for the period were 1,147 DMT,
containing 1.5 million pounds of lead, year ended August 31, 2007
was 2.8 million.
- The average price for sales of lead in the period was
$1.24/lb.
- Lead concentrate inventory at December 31, 2007 was 358 DMT,
an increase in inventory from the 290 DMT of concentrate on hand at
August 31, 2007.
- Silver in the lead concentrate produced during the period
totaled 67,000 ounces.
Mill Expansion Project
Tons mined and processed were higher in the four months ended
December 31, 2007 compared to previous 2007 periods as expansion to
the 2,200 tpd was completed in September. Capital expenditures are
budgeted at $10 million to further expand the facility to 3,000 tpd
which is expected to be completed by the fourth quarter this
year.
Labour
There were 4 minor lost time accidents during the period from
both operations and construction. The number of personnel at the
end of the period was 530, of which approximately 90 were
contractors related to the expansion project.
Four Month Actual Sales
Actual sales and costs for the year are tabulated below.
---------------------------------------------------------------
4 months
ended
Dec 31, 2007
---------------------------------------------------------------
Copper (million lbs) 8.6
---------------------------------------------------------------
Zinc (million lbs) 1.4
---------------------------------------------------------------
Lead (million lbs) 1.5
---------------------------------------------------------------
Silver ('000 ounces) 377
---------------------------------------------------------------
Copper production costs, net of by product
credits, per lb of copper $ 0.55
---------------------------------------------------------------
Off property costs for transport, smelting
and refining per lb of copper $ 0.41
---------------------------------------------------------------
Total cash costs of production per lb of copper $ 0.96
---------------------------------------------------------------
Copper production costs in the four months ended December 31,
2007 were $0.21 above plan reflecting the impact of the company
having sold less zinc and writing down a portion of the zinc with
lower grade in the concentrate and the lower by product metal
prices.
Financial Results
The information in this news release and the selected financial
information contained in the following pages should be read in
conjunction with the audited Consolidated Financial Statements and
Management Discussion and Analysis for the four months ended
December 31, 2007, which will be available at Capstone's website at
www.capstonemining.com and at www.sedar.com.
The Company's earnings before future tax accruals for the four
months ended December 31, 2007 were $16.8 million or $0.21 per
share compared to earnings of $25.2 million or $0.31 per share for
the year ended August 31, 2007. The Company's net earnings for
December 31, 2007 were $10.4 million or $0.13 per share compared to
$22.7 million or $0.28 per share for August 31, 2007 after future
income tax allowance, a non-cash item.
The Company reported revenues for the four month period of $33.0
million (year ended August 31, 2007 - $55.3 million). Revenues
consisted of copper concentrate sales of $26.5 million, zinc
concentrate sales of $1.5 million, lead concentrate sales of $1.9
million and silver in concentrate sales of $3.1 million.
Cost of sales for the four month period was $9.0 million (year
ended August 31, 2007 - $14.2 million), treatment and
transportation charges were $5.3 million (August 31, 2007 - $10.1
million), royalty charges were $0.6 million (August 31, 2007 - $1.4
million) and depletion was $0.9 million (August 31, 2007 - $1.7
million).
For the four month period ended December 31, 2007, the Company
recorded an unrealized gain related to mark-to-market on the
outstanding derivative contracts in the amount of $2,928,644
(August 31, 2007 - $Nil).
A future income tax provision of $6.3 million was recorded at
December 31, 2007 compared to $2.5 million at August 31, 2007. The
increase in the income tax provision is mainly due to the reversal
of the current future income tax asset set up at August 31, 2007 as
well as an increase in the excess of book value of capital assets
over tax values.
Glencore International AG and Trafigura Beheer B.V. purchases
the concentrates produced by the Cozamin mine pursuant to the terms
of a written contract.
Capstone Mining Corp.
Selected Financial Information
Consolidated Balance Sheets
-------------------------------------------------------------------------
Dec 31, Aug 31,
2007 2007
-------------------------------------------------------------------------
Cash $ 25,114,753 $ 35,988,166
Marketable securities 8,097,348 -
Investment in Silverstone Resources Corp. 39,022,891 28,498,044
Property, plant and equipment 45,655,190 44,616,033
Other assets 27,090,014 24,888,492
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Total assets 144,980,196 133,990,735
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Deferred revenue 41,398,281 43,056,390
Other liabilities 17,833,194 15,561,814
-------------------------------------------------------------------------
Total liabilities 59,231,475 58,618,204
Shareholder's equity 85,748,721 75,372,531
-------------------------------------------------------------------------
Total liabilities and shareholders' equity 144,980,196 133,990,735
-------------------------------------------------------------------------
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Consolidated Statements of Operations
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Four months Year
ended ended
Dec 31, Aug 31,
2007 2007
-------------------------------------------------------------------------
Total revenues $ 32,975,274 $ 55,335,647
Total cost of sales (16,157,585) (28,138,291)
-------------------------------------------------------------------------
Operating profit 16,817,689 27,197,356
G&A and other expenses (3,437,958) (3,773,660)
Other items 3,409,803 1,726,946
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Earnings (loss) before income taxes 16,789,534 25,150,642
Future income tax (6,333,610) (2,479,593)
-------------------------------------------------------------------------
Earnings (loss) for the year 10,415,923 22,671,049
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EPS - Basic 0.13 0.28
EPS - Diluted 0.12 0.27
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Capstone will host a conference call on Friday, February 29 at
8:00 a.m. Pacific Time (11:00 AM Eastern Time) to discuss these
results. The conference call may be accessed by dialing
1.866.514.1894 in North America or 1.480.248.5085 internationally,
please ask for the Capstone Mining Corp. conference call. The
conference call will be archived for later playback until March 7,
2008 and can be accessed by dialing 1.866.501.5559 and the passcode
is 21264082#.
ABOUT CAPSTONE
Capstone is a Canadian based mining company currently operating
the 100% owned Cozamin copper-silver-lead-zinc mine located in
Zacatecas State, Mexico. Capstone has approximately 81.4 million
shares outstanding and is well financed with no bank debt. More
information is available online at: www.capstonemining.com.
Contacts: Capstone Mining Corp. Chris Tomanik (604) 684-8894
Email: ctomanik@capstonemining.com Capstone Mining Corp. Mark
Patchett (604) 684-8894 (604) 688-2180 (FAX) Email:
mpatchett@capstonemining.com Website: www.capstonemining.com
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