Guidance for Cozamin and Minto, Development Projects and
Exploration
(All amounts in US$ unless otherwise specified)
VANCOUVER, Jan. 16, 2014 /CNW/ - Capstone Mining Corp.
("Capstone") (TSX: CS) today provided its production and capital
expenditure guidance for 2014 for two of its three operating mines,
Cozamin and Minto, and its development and exploration projects.
Capstone expects to produce 38,500 tonnes (±5%) of copper in
concentrates from Cozamin and Minto, slightly higher than 2013
production of 37,500 tonnes.
"The mine plans at Cozamin and Minto in 2014 call for a similar
production level to last year," said Darren
Pylot, President and CEO of Capstone. "Our focus for 2014
will be on cost efficiencies at all of our operations, including
Pinto Valley, for which guidance will be provided before the end of
the first quarter."
"On the development side, we are advancing the Santo Domingo
Project under a stage-gate decision process, where we are
continuing to move the project forward to each decision point. In
2014 we will advance the engineering and work towards the
Environmental Impact Assessment approval by early 2015," continued
Mr. Pylot.
2014 Production Guidance - Cozamin and
Minto
|
|
|
|
|
Cozamin |
Minto |
Total |
Tonnes milled (millions) |
1.2 |
1.4 |
2.6 |
Copper grade (%) |
1.85 |
1.49 |
1.66 |
Copper recovery (%) |
93.4 |
92.4 |
93.0 |
|
Production (contained in
concentrates) |
Copper (tonnes) |
20,000 |
18,500 |
38,500 |
Zinc (tonnes) |
9,000 |
- |
9,000 |
Lead (tonnes) |
1,700 |
- |
1,700 |
Silver (million ounces) |
1.6 |
0.2 |
1.8 |
Gold (ounces) |
- |
17,670 |
17,670 |
|
|
|
|
C1 cash costs per pound of payable
copper produced net of by-product
credits and selling costs(1) |
$1.30 -$1.40 |
$2.45 - $2.55 |
$1.85-$1.95 |
(1) This is an alternative performance measure; please see
"Alternative Performance Measure" at the end of this release. C1
cash cost per pound is per pound of payable copper produced. All
amounts in US$ unless otherwise specified.
Cozamin: The majority of the ore will continue to come from the
San Roberto blocks in 2014,
however mining is transitioning to lower grade blocks within the
zone. New development for 2014 will be required for stopes in the
Mala Noche Footwall Zone, which is expected to contribute
approximately 23% of ore production in 2014 at an average grade of
1.77%. Cash costs at Cozamin in 2014 are expected to increase over
2013, as savings in site operating costs are offset by higher
treatment and selling costs.
Minto: The 2014 mine plan at Minto optimizes mill throughput,
grade and production, while minimizing operating costs and
development capital, and reflects the following:
- Surface Mining - The Area 2 Stage 2 pit will be completed in
January 2014, following which surface
mining will move to the Area 118 pit which will finish in
mid-August. The mine plan calls for a reduced surface mining rate
during the first half of the year to balance mining and milling
activities.
- Underground Mining - Capstone is able to defer the development
and production from the Area 118 underground for one year without a
negative impact on 2014 production. The underground plan in 2014
calls for high grade ore just below the bottom of the mined out
Area 2 pit to be recovered prior to that pit being utilized for
water storage.
- Mill Operations - The mill will process ore from the Area 2 and
Area 118 pits, supplemented with ore from underground and stockpile
for the first half of the year, with primarily stockpiled ore
processed in the second half of the year until the next pit (Minto
North) begins to feed the mill in mid-2015. Mill throughput in 2014
will remain relatively constant throughout the year, however grade
will decline starting in August when lower grade material from
stockpile is scheduled to be milled.
Pre-stripping of Minto North is set to begin on August 15, 2014, contingent upon receipt of the
necessary permits and licenses. A delay in the Phase V/VI permit
application has resulted in the shift of the most significant
production from Minto North by one year from 2015 to 2016, but
brings high grade open pit ore from Minto North in ahead of ongoing
underground development of Minto
South underground, which is expected to resume in 2015. Cash
costs for 2014 are budgeted to be higher than 2013, primarily due
to higher underground mining costs and treatment and selling
costs.
2014 Capital Expenditure Guidance - Operating Mines - Cozamin
and Minto (excluding exploration and deferred
stripping)
|
|
|
|
Cozamin |
Minto |
|
(US$ millions) |
Total 2014 Budgeted Capital Expenditures (all
sustaining) |
$18.0 |
$17.4 |
|
|
|
|
|
|
Major capital expenditures at Cozamin include $10.8 million for underground development,
infrastructure and communications and $6.4
million in underground and surface equipment.
Major capital expenditures at Minto include $5.2 million in underground development of the
underground zone that is scheduled for 2014, $4.3 million for renovations to the camp and
other site upgrades (partially carried from 2013), $5.3 for various improvement projects and
$2.0 million in permitting and
environmental activities related primarily to the joint Phase V/VI
Yukon Environmental and Socio-economic Assessment Board ("YESAB")
review that is currently underway, and subsequent water licensing,
to bring all remaining known reserves at Minto into the mine plan.
In addition, Minto expects to capitalize pre-stripping costs of
$16.1 million in the second half of
2014, related solely to the initial development of the Minto North
pit, with no corresponding production from Minto North planned for
2014.
2014 Capital Expenditure Guidance - Development
Projects
|
|
|
(US$ millions) |
Santo Domingo (70% basis) |
$20.9 |
Kutcho |
0.9 |
Total |
$21.8 |
|
|
|
|
Santo Domingo, Chile: The Definitive Feasibility Study
("DFS") for Santo Domingo is
expected to be completed at the end of the first quarter of 2014.
Capstone elected to take a more conservative approach to the
metallurgical work and lengthened the timeline for completion of
the DFS. Capstone formally submitted the Environmental Impact
Assessment ("EIA") for the Santo
Domingo project in October
2013, which initiated the formal environmental assessment
process, and expects to have the port concession finalized before
the change in government. In 2014, the company intends to continue
to de-risk the project and will maintain the owner's team, advance
the EIA process and community relations, pursue power and third
party port opportunities and continue to advance engineering. The
total Santo Domingo budget for
2014 is $29.8 million of which
Capstone's 70% share is $20.9
million.
Kutcho, BC: Kutcho's production profile and mine life no longer
fits with Capstone's growth strategy and strategic alternatives are
being evaluated. The 2014 budget of $0.9
million consists primarily of ongoing environmental baseline
studies as well as some operational costs related to the camp.
2014 Exploration Program
|
|
|
(US$ millions) |
Cozamin |
$ 3.0 |
Project Providencia - Chile |
6.7 |
Cumbral Project - Mexico |
2.9 |
Other |
0.5 |
Total |
$13.1 |
|
|
|
|
Brownfield:
At Cozamin, the multi-year underground infill drilling program
in the Mala Noche Footwall Zone that focused on adding mine life
was completed in 2013. A mineral reserve update including resources
resulting from the 2012 drilling will be released during the first
quarter. A mineral resource update is planned in the first half of
2014 that will incorporate all drilling up to the end of 2013. The
2014 exploration drill program at Cozamin will consist of up to
10,000 metres of surface drilling, targeting Mala Noche splays that
have not previously been tested.
Brownfield exploration at Minto remains paused for the second
consecutive year, as the mine life currently runs to 2022 and the
most compelling targets can be accessed from underground once the
ramp reaches an optimum point to resume drilling.
Greenfield:
Greenfield exploration is principally focussed on two projects,
with up to 15,000 metres of drill testing scheduled for the second
half of the year at Project Providencia in Chile, Capstone's earn-in project with
Sociedad Química y Minera de Chile S.A. ("SQM") and up to 10,500
metres of drill testing at the Cumbral earn-in property in
Sonora, Mexico.
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 mines; the Pinto Valley copper-molybdenum mine
located in Arizona, US, the
Cozamin copper-silver-zinc-lead mine 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 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 Chile
and Mexico. Using our cash flow
and strong balance sheet as a platform, Capstone's strategy is to
continue to grow with mineral resource and reserve expansions and
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
Toronto Stock Exchange (TSX).
Further 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 anticipated production from the
Pinto Valley Mine, the realization of mineral reserve estimates,
the timing and amount of estimated future production, success of
mining operations, environmental risks, 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 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
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; the completion
of development 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
The technical information in this news release ("Technical
Information") 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"). The disclosure of the Technical Information contained in
this news release has been reviewed and approved by Brad Skeeles, P. Eng., Vice President of North
American Operations (Technical Information related to mining and
production), Brad Mercer, P. Geol.,
Vice President, Exploration (Technical Information related to
mineral exploration activities), and Gregg
Bush, P. Eng., Senior Vice President and Chief Operating
Officer, all Qualified Persons under NI 43-101.
Alternative Performance Measures
The item marked with (1) "C1 Cash Cost per Pound of Payable
Copper Produced" is an Alternative Performance Measure. This
performance measure is included because this statistic is a key
performance measure that management uses to monitor performance.
Management uses this statistic to assess how the Company is
performing to plan and to assess the overall effectiveness and
efficiency of mining operations. This performance measure does not
have a meaning within IFRS and, therefore, amounts presented may
not be comparable to similar data presented by other mining
companies. This performance measure should not be considered in
isolation as a substitute for measures of performance in accordance
with IFRS.
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 may refer to technical
reports that use 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.
SOURCE Capstone Mining Corp.