VANCOUVER, British Columbia,
March 13, 2013 /PRNewswire/ --
Operating Cash Flow of $114.4
million, Net Earnings of $59.6
million or $0.16 per share
(All amounts in US$ unless otherwise specified)
Capstone Mining Corp. ("Capstone") (TSX: CS) today announced its
financial results for the year ended December 31, 2012. Net earnings for the year were
$59.6 million and operating cash flow
before changes in working capital(1) was $114.4 million. Net earnings for the fourth
quarter were $18.5 million and
operating cash flow before changes in working capital(1)
was $24.7 million. Capstone ended the
year with cash on hand of $499.9
million, a $200 million credit
facility and no long-term debt. Copper production for the year at
Capstone's two operating mines, Cozamin and Minto, totalled 82.8
million pounds in concentrates (79.6 million pounds of payable
copper) at a total cash cost(1) of $1.50 per payable pound of copper produced.
Capstone will hold a conference call and webcast on
Thursday, March 14, 2013 at
11:30 am Eastern time (8:30 am Pacific time) to discuss these results;
call-in details are provided at the end of this release. This
release should be read in conjunction with Capstone's consolidated
financial statements and management's discussion and analysis
("MD&A") for the year ended December 31,
2012, which are available on Capstone's website at:
http://capstonemining.com/s/Financial_Statements.asp and on SEDAR.
An updated corporate presentation, including results to
December 31, 2012, will also be
available at http://capstonemining.com/s/Presentation.asp.
Overview
Three Months Ended Year Ended
December 31 December 31
2012 2011 2012 2011
Revenue ($ millions) 72.5 61.5 305.5 327.8
Copper in concentrates produced
(million lbs) 19.7 19.8 82.8 78.3
Payable copper produced (million
lbs) 18.8 19.0 79.6 75.5
Total cash cost per payable
pound of copper produced (1) ($) 1.70 1.50 1.50 1.45
Copper sold (million lbs) 19.4 16.5 79.0 79.1
Recognized copper price per
pound ($) 3.47 3.40 3.66 3.90
Net earnings ($ millions) 18.5 4.9 59.6 60.4
Net earnings per common share
($) 0.05 0.01 0.16 0.20
Adjusted net earnings(1) ($
millions) 19.3 4.2 77.9 52.2
Adjusted net earnings(1) per
common share ($) 0.05 0.01 0.20 0.18
Operating cash flow before
changes in working capital(1) ($
millions) 24.7 15.0 114.4 120.2
Operating cash flow before
changes in working capital per
common share(1) ($) 0.06 0.04 0.30 0.41
Cash and cash equivalents ($
millions) 499.9 486.3
(1)The items marked with a "1" are alternative
performance measures; please see "Alternative Performance Measures"
at the end of this release.
"We had another solid year in 2012," said Darren Pylot, President and CEO of Capstone.
"Our revenue, earnings and cash flow remained strong and we
exceeded production and cost guidance for the year. Both operating
mines are well-positioned to deliver on their targets in 2013."
"We are looking ahead to the growth of the company and in 2013
are reinvesting in our mines and development projects. With
approximately ten year mine lives at our operating mines and
additional exploration upside, Capstone is poised to deliver strong
results well into the future. We plan to advance our development
projects in 2013 by formally entering the permitting process at
Kutcho and completing key milestones at Santo Domingo, including submitting the
Environmental Impact Study and completing the Feasibility
Study. We will also continue activities on our greenfield
exploration portfolio, with initial drilling campaigns at projects
in Chile and Mexico," continued Mr. Pylot.
"With our strong balance sheet we have the financial resources
in place to execute on our strategy. In addition, the ability to
deploy our balance sheet on opportunistic acquisitions provides
Capstone with the flexibility to grow our short term production
profile and advance the company to the next level."
Financial and Production Highlights
for the Year Ended December 31,
2012
- Recorded net earnings of $59.6
million or $0.16 per common
share which included:
- Earnings from mining operations of $113.0 million,
- Recognized copper price of $3.66
per pound,
- Cost of sales included a $5.5
million non-cash charge related to the write-down of ore
stockpile inventory at the Minto Mine,
- $29.2 million in current and
deferred tax expenses.
- Adjusted net earnings(1) of $77.9 million or $0.20 per common share after making adjustments
for certain non-cash and non-recurring items.
- Generated operating cash flow before changes in working
capital1of $114.4 million
or $0.30 per common share.
- Working capital increased to $562.1
million at December 31, 2012
(which included $499.9 million of
cash and cash equivalents) from $539.8
million at December 31,
2011.
- Produced a total of 79.6 million pounds of payable copper at an
estimated total cash cost(1) of $1.50 per pound of payable copper produced.
- Recorded revenue of $305.5
million on the sale of 79.0 million pounds of copper, 13.2
million pounds of zinc, 2.6 million pounds of lead, 18,562 ounces
of gold and 1,628,008 ounces of silver.
Financial and Production Highlights
for the Three Months Ended December 31,
2012
- Recorded net earnings of $18.5
million:
- Earnings from mining operations of $29.4
million, which was partially offset by general and
administrative expenses of $4.3
million, share-based compensation of $1.0 million, a gain on foreign exchange of
$1.5 million and current and deferred
income taxes of $7.2 million.
- Earnings from mining operations were driven by revenue of
$72.5 million on the sale of 19.4
million pounds of copper, 3.9 million pounds of zinc, 0.4 million
pounds of lead, 5,700 ounces of gold and 452,000 ounces of
silver.
- Produced a total of 18.8 million pounds of payable copper at an
estimated total cash cost1 of $1.70 per pound of payable copper produced.
- Adjusted net earnings(1) were $19.3 million or $0.05 per common share after making adjustments
for certain non-cash and non-recurring items.
- Operating cash flow before changes in working
capital(1) of $24.7
million or $0.06 per
share.
Operational Highlights for the Year
Ended December 31, 2012
Cozamin Mine, Mexico:
- Achieved record mill throughput in 2012, averaging 3,205 tonnes
per day.
- Produced a record 46.9 million pounds of copper in concentrates
during the year.
- Completed 27,114 metres of underground exploration drilling in
48 diamond drill holes.
- Completed 4,754 metres of surface exploration drilling in 5
diamond drill holes.
- In two separate resource updates announced in February 2012 and March
2013, the Measured and Indicated resource in Mala Noche
Footwall Zone ("MNFWZ") increased to 188.6 million pounds of
contained copper, which includes the MNFWZ reserves.
- Incorporated a copper reserve in the MNFWZ of 2.27 million
tonnes at a grade of 1.96% copper, based on the initial resource
estimate, bringing the remaining mine life at Cozamin to nine
years.
- Completed 1,138 metres of development drifting on the MNFWZ,
mining 107,356 tonnes of development ore an average grade 1.9%
copper for the year.
Minto Mine, Yukon:
- Achieved record mill throughput in 2012, averaging 3,665 tonnes
per day.
- Produced 35.9 million pounds of copper in concentrates. This
was lower than 2011 due to lower grades compared with the previous
year as a result of a higher proportion of stockpile material
feeding the mill.
- In October 2012, the amendment to
Minto's Water Use License was approved, allowing the placement of
Area 2/118 tailings into the mined out Main Pit. All necessary
permits are in place to mine all identified reserves in the Area
2/118 open pit and underground mines.
- Commenced underground development with the initial excavation
of the portal and began development of the decline by a contractor.
Initial ore release from the underground is planned for the third
quarter of 2013.
- Completed the Phase VI Preliminary Feasibility Study, which
includes additional underground mineral reserves from the Copper
Keel and Wildfire zones in the Minto Mine plan. The study extends
the mine life to 2022 with yearly average copper production of 40
million pounds at an average cash cost of $1.92/lb of payable copper.
- Completed 29,539 metres of exploration drilling in 84 diamond
drill holes.
- Added 67 million pounds of copper resources in the M&I
category and 11 million pounds in the Inferred category after an
update of the Minto South Deposit block model. Added an additional
101 million pounds of copper resources in the M&I category and
86 million pounds in the Inferred category from the Fireweed
Extension of Minto East and Inferno
North Extension of Minto North.
Santo Domingo Project, Chile:
- Awarded the contract for the preparation of the Santo Domingo project environmental impact
study to Knight Piésold.
- Awarded the feasibility study ("FS") and basic engineering to
AMEC, with NCL Ingeniería y Construcción Ltda. providing the mining
section of the FS.
- Selected a port location and completed preliminary engineering
studies for this greenfield port site located 110 kilometres from
the Santo Domingo project. The
port site was chosen because of its exceptionally high availability
for loading iron vessels. Formal application for the marine
concession was made in March
2013.
- In connection with preparation of the FS, AMEC, NCL and
Capstone personnel have completed a preliminary estimate of the
development capital to build the Santo
Domingo project. The capital cost is currently estimated at
$1.5 to 1.8 billion, dependent on
flow sheet variables and mine equipment lease/purchase options.
Capstone is continuing on schedule to complete the FS by
year-end.
- Subsequent to year-end, an additional 1,470 metres of
condemnation drilling was completed in support of the FS to
sterilize a new tailings deposition area, which was identified as a
superior location during the optimization process.
Kutcho Project, British
Columbia:
- Basic engineering continued to support the compilation of the
environmental application and revision of capital and operating
expenditure estimates.
- A Section 13 Order has been issued by the British Columbia
Environmental Assessment Office based on the revised Project
Description and the Application Information Requirements were
approved for the environmental assessment application.
- Consultation with First Nations, moving towards Impact Benefit
Agreements, continued throughout 2012.
- The project remains on track to submit an environmental
assessment application in mid-2013.
Production Outlook
Capstone's 2013 guidance of 85 million pounds (± 5%) of copper
contained 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, remains
unchanged.
Adoption of Advance Notice Policy
Capstone also announces the approval by its board of directors
(the "Board") of an advance notice policy (the "Policy"). The
purpose of the Policy is to provide shareholders, directors and
management of the company with a clear framework for nominating
directors.
Among other things, the Policy includes a provision that
requires advance notice to be given to Capstone in circumstances
where nominations of persons for election to the Board are made by
shareholders other than pursuant to: (i) a requisition of a meeting
made pursuant to the provisions of the British Columbia Business
Corporations Act (the "Act"); or (ii) a shareholder proposal made
pursuant to the provisions of the Act. The Policy fixes a deadline
by which director nominations must be submitted to Capstone prior
to any annual or special meeting of shareholders and sets forth the
information that must be included in the notice to the company in
order for a nominee to be eligible for election.
In the case of an annual meeting, notice to Capstone must be
given no fewer than 35 nor more than 60 days prior to the date of
the meeting; provided that if the meeting is to be held on a date
that is fewer than 50 days after the date on which the first public
announcement of the date of the meeting was made, notice may be
given no later than the close of business on the 10th day following
such public announcement.
In the case of a special general meeting that is not also an
annual meeting, notice to the company must be made no later than
the close of business on the 15th day following the day on which
the first public announcement of the date of the special meeting
was made.
The Policy is effective and in full force and effect as of the
date it was approved. In accordance with the terms of the Policy,
the Policy will be put to shareholders of Capstone for approval at
the next Annual General Meeting ("AGM") to be held on May 8, 2013, and if the policy is not confirmed
at the meeting by ordinary resolution of shareholders, the Policy
will terminate and be of no further force and effect following the
termination of the AGM.
Conference Call and Webcast
Details
Capstone will host a conference call and webcast on Thursday, March 14, 2013 at 11:30 am Eastern time (8:30 am Pacific time).
Date: Thursday, March 14, 2013
Time: 11:30 am Eastern Time (8:30 am Pacific Time)
Dial in: North America: 1-888-390-0605, International: 1-416-764-8609
Webcast: http://www.newswire.ca/en/webcast/detail/1096935/1195123
Replay: North America: 1-888-390-0541, International: 1-416-764-8677
Replay
Passcode: 017456
The conference call replay will be available until March 28, 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
http://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 "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
http://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
http://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., Business Development
Manager (Technical Information related to mining and production)
and Brad Mercer, P. Geol., 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 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 Management's Discussion and
Analysis for the year ended December 31,
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 news
release may not be comparable to information made public by U.S.
companies subject to the reporting and disclosure requirements of
the SEC.
For further information:
Cindy Burnett, VP, Investor
Relations and Communications
+1-604-637-8157
(CS.)