VANCOUVER, British Columbia,
October 11, 2013 /PRNewswire/ --
Capstone Mining Corp. ("Capstone") (TSX: CS) has completed the
previously announced acquisition of the Pinto Valley copper mine
and the associated San Manuel Arizona Railroad Company from BHP
Copper Inc., a subsidiary of BHP Billiton Ltd. ("BHP
Billiton").
"The closing of the Pinto Valley acquisition advances us as one
of the leading intermediate copper producers, with a focus in the
Americas," said Darren Pylot,
President and CEO of Capstone. "Following the closing of the
transaction, we have retained considerable financial flexibility
with a very conservative capital structure."
The purchase price of US$650
million was funded from cash and Capstone's credit
facilities.
Operations
The restart of the Pinto Valley Mine, which commenced in
December 2012, is continuing with a
targeted run-rate of 50,800 tonnes per day by the end of 2013 with
annualized production of 130 million to 150 million pounds of
copper per year.
Capstone will commence reporting full operating and production
information for Pinto Valley with its fourth quarter report.
An experienced workforce remains in place, with 98% of Pinto
Valley's 650 employees accepting Capstone's offer of employment,
including all key positions. Steve
Winkelmann, formerly Capstone's VP of North American
Operations, has been appointed Pinto Valley's Mine General Manager
and has been on site shadowing his BHP Billiton counterpart since
early September. Steve has 40 years of mining experience including
large mining operations, primarily in the US and most recently in
Arizona.
Next Steps
The Capstone Pinto Valley team will initially focus on
continuing to ramp up production levels and the integration of the
operations to achieve our targets. At the same time leadership will
identify opportunities for cost reduction, reliability enhancement
and throughput maximization.
Capstone believes that considerable potential exists to upgrade
the existing 968 million tonnes of Measured and Indicated
("M&I") Mineral Resources (grading 0.35% copper at a 0.25%
cut-off grade) into reserves, potentially extending the operation
beyond the current reserve life as reported by BHP Billiton. A
Preliminary Feasibility Study ("PFS") is underway that will target
the M&I Mineral Resources for potential conversion to reserves,
with expected completion in late 2013 or early 2014. The PFS will
consider the potential to extend operations within the currently
permitted boundaries. In addition, Capstone plans to commission
engineering and economic studies to consider all remaining current
mineral resources and their potential for development.
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 focused on copper, with
three producing copper mines; the newly acquired Pinto Valley
copper-molybdenum-silver mine in Arizona, US, 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 70% owned Santo
Domingo copper-iron-gold project in Region III, Chile in partnership with Korea Resources
Corporation and the 100% owned Kutcho copper-zinc-gold-silver
project in British Columbia,
Canada, as well as exploration properties in Canada, Chile
and Mexico. Using our cash flow
and strong balance sheet as a platform, Capstone's strategy is to
continue to grow with continued mineral resource and reserve
expansions, exploration, and through acquisitions in politically
stable, mining-friendly regions. We will pace our growth with our
financial capacity, ensuring we retain, as a priority, sufficient
financial flexibility to meet the requirements of our existing
operations and our committed development projects, while
maintaining an adequate cushion to deal with market volatility and
operating risks inherent in the mining industry. 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 conversion of mineral resources to
mineral reserves, the timing of completing the PFS and follow-on
engineering and economic studies for Pinto Valley, the anticipated
production from the Pinto Valley Mine, 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".
Forward-looking statements are based on a number of assumptions
which may prove incorrect, including, but not limited to, the
exploration and development potential of the project, current and
future commodity prices and exchange rates and continued daily
operation of the Pinto Valley Mine. 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.
Quality Assurance and NI 43-101
Compliance
The technical information in this news release has been prepared
in accordance with Canadian regulatory requirements set out in
National Instrument 43-101 Standards of Disclosure for Mineral
Projects of the Canadian Securities Administrators ("NI 43-101")
and reviewed by Brad Skeeles, P.
Eng., Vice President, North American Operations (Technical
Information related to mining and production), a "Qualified Person"
under NI 43-101. The mineral resource estimate reported herein for
the Pinto Valley property is set out in the NI 43-101 technical
report "Pinto Valley Property Mineral Resource Estimate" with an
effective date of February 28, 2013,
prepared by Garth Kirkham, P. Geo,
Kirkham Geosystems Ltd., an independent Qualified Person, based on
information provided by BHP Billiton is available on SEDAR. BHP
Billiton's mineral reserve estimate has been publicly reported in
the BHP Billiton 2012 Annual Report.
In addition, Gregg Bush, Senior
Vice President and Chief Operating Officer for Capstone Mining
Corp. reviewed and approved this news release.
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 refers to a technical
report that 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
cburnett@capstonemining.com
SOURCE Capstone Mining Corp.