(All amounts in US$ unless otherwise specified)
VANCOUVER, Feb. 20, 2014 /PRNewswire/ - Capstone Mining
Corp. ("Capstone") (TSX: CS) today announced its financial results
for the year ended December 31, 2013.
Capstone posted a net loss for 2013 of $9.4
million. Operating cash flow before changes in working
capital(1) was $85.5
million. Capstone ended the year with cash on hand of
$104.0 million. Copper production for
the year at Capstone's three operating mines, Pinto Valley (82 days
of ownership), Cozamin and Minto,
totalled 113.8 million pounds of copper in concentrates and cathode
(109.6 million pounds of payable copper) at a C1 cash
cost(1) of $1.72 per
payable pound of copper produced.
Capstone will hold a conference call and webcast on
Friday, February 21, 2013 at
9:30 am Eastern Time (6:30 am Pacific Time) to discuss these results;
call-in details are provided at the end of this release. This
release should be read in conjunction with Capstone's unaudited
condensed interim consolidated financial statements and
management's discussion and analysis ("MD&A") for the year
ended December 31, 2013, which are
available on Capstone's website at:
http://capstonemining.com/s/financial-statements.asp and on SEDAR.
An updated corporate presentation, including results to
December 31, 2013, will also be
available at http://capstonemining.com/s/presentations.asp.
Overview
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Q4 2013 |
Q4 2012 |
2013 |
2012 |
Revenue ($ millions) |
136.8 |
72.5 |
332.0 |
305.5 |
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Copper in concentrates produced (million
lbs) |
55.5 |
19.7 |
112.4 |
82.8 |
Copper cathode produced (million lbs) |
1.4 |
- |
1.4 |
- |
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Payable copper produced (million lbs) |
54.9 |
18.8 |
109.6 |
79.6 |
C1 cash cost per payable pound of copper
produced(1) ($) |
1.78 |
1.70 |
1.72 |
1.50 |
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Copper sold (million lbs) |
44.3 |
19.4 |
100.1 |
79.0 |
Realized copper price per pound sold ($) |
3.30 |
3.47 |
3.30 |
3.66 |
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Net (loss) earnings ($ millions) |
(20.9) |
18.5 |
(9.4) |
56.2 |
Net (loss) earnings per common share ($) |
(0.06) |
0.05 |
(0.02) |
0.15 |
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Adjusted net earnings(1) ($
millions) |
8.1 |
19.3 |
20.3 |
77.9 |
Adjusted net earnings(1) per common
share ($) |
0.02 |
0.05 |
0.05 |
0.20 |
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Operating cash flow before changes in working
capital(1) ($ millions) |
24.2 |
24.7 |
85.5 |
114.4 |
Operating cash flow before changes in
working capital per common share(1) ($) |
0.06 |
0.06 |
0.23 |
0.30 |
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Cash and cash equivalents ($ millions) |
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104.0 |
499.9 |
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Net (debt) cash(1) ($
millions) |
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(207.5) |
499.9 |
1) |
These are alternative performance measures; please see
"Alternative Performance Measures" at the end of this
release.
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"This past year was pivotal for Capstone with the acquisition of
the Pinto Valley mine, positioning us as a leading intermediate
copper producer," said Darren Pylot,
President and CEO of Capstone. "In 2014 at Pinto Valley we plan to
stabilize the operation, lower costs and complete the study for the
second phase, which is intended to extend the mine life. At Cozamin
and Minto we are focused on
reducing costs and optimizing operations, and we will further
advance and de-risk our Santo
Domingo development project."
"Our cash flow remained strong throughout 2013 and we ended the
year with over $100 million in cash
and a very conservative balance sheet," continued Mr. Pylot. "Our
strong financial position provides us with significant flexibility
to fund our capital programs and continue to grow the company."
Financial and Production Highlights for the Year Ended
December 31, 2013
- Net loss of $9.4 million or
$0.02 per common share which
included:
-
- Earnings from mining operations of $57.1
million,
-
- Realized copper price of $3.30
per pound.
- Production costs included a $12.5
million non-cash charge related to the write-down of
inventory at the Minto Mine,
- $14.4 million non-cash charge
related to the write-down of capitalized mineral property costs at
Minto,
- $15.6 million in current and
deferred tax expenses.
- Adjusted net earnings(1) of $20.3 million or $0.05 per common share after making adjustments
for certain non-cash and other items.
- Operating cash flow before changes in working
capital(1) of $85.5
million or $0.23 per common
share.
- Working capital decreased to $140.2
million at December 31, 2013
(which included $104.0 million of
cash and cash equivalents) from $562.1
million at December 31, 2012,
primarily as a result of closing the transaction to acquire the
Pinto Valley Mine on October 11,
2013.
- Production of 109.6 million pounds of payable copper at a C1
cash cost(1) of $1.72 per
pound of payable copper produced.
- Revenue of $332.0 million on the
sale of 100.1 million pounds of copper, 14.7 million pounds of
zinc, 2.3 million pounds of lead, 1,684,341 ounces of silver and
16,131 ounces of gold.
Operational Highlights for the Year Ended December 31, 2013
Pinto Valley Mine:
- Completed the acquisition of the Pinto Valley Mine from BHP
Billiton on October 11, 2013 for a
purchase price of $650.0 million less
a working capital adjustment of $0.1
million.
- Produced 29.6 million pounds of copper in concentrates and 1.4
million pounds of copper cathode during 2013 (82 days of ownership)
at a C1 cash cost1 of $2.26 per pound of payable copper.
Cozamin Mine:
- Produced 45.5 million pounds of copper in concentrates at a C1
cash cost(1) of $1.18 per
pound of payable copper.
- Completed 19,836 metres of underground infill/step-out
exploration drilling in 33 diamond drill holes during 2013
primarily focused in the Mala Noche Footwall Zone.
Minto Mine:
- Produced 37.2 million pounds of copper in concentrates at a C1
cash cost(1) of $1.93 per
pound of payable copper.
- Initial development ore released from underground during
September 2013.
Santo Domingo Project:
- Work on the Feasibility study ("FS") and engineering continued,
with the FS now expected to be completed in the first half of
2014.
- On October 29, 2013, Capstone
formally submitted the Environmental Impact Assessment for the
Santo Domingo project. This
initiates the formal environmental assessment process, which is
expected to take approximately 15 to 18 months.
Greenfield Exploration:
- During 2013 Capstone entered into an option agreement with
Sociedad Química y Minera de Chile S.A. to earn up to 70% of
Project Providencia in Region II, Chile, which is a very large under-explored
land package in the world's most prolific copper jurisdiction. The
initial option is on 350,000 hectares (3,500 square kilometres) and
would be reduced over time to a maximum of 50,000 hectares if a
joint venture is ultimately formed. Capstone is the operator of the
project and may earn up to a 70% interest in the property with the
right to withdraw from the project at any time.
Kutcho Project:
- Development activities at Kutcho were not significantly
advanced in 2013 as Capstone focused on the acquisition of Pinto
Valley. Following the successful close of the Pinto Valley
transaction, Kutcho's production profile and mine life no longer
fit within Capstone's growth strategy and strategic alternatives
are being evaluated. Based on the intention of management to
dispose of this asset, Kutcho's assets and liabilities have been
classified in the December 31, 2013
audited financial statements as held for sale.
Financial and Production Highlights for the Quarter Ended
December 31, 2013
In Q4 2013 the Company recorded a net loss of $20.9 million. The main contributors to the net
loss were:
- Earnings from mining operations were $16.7 million, which was more than offset by the
Minto mineral property write-down
of $14.4 million, G&A expenses of
$5.8 million, Pinto Valley
transaction costs of $3.4 million,
net finance expense of $3.4 million,
and tax expense of $6.1 million.
- Adjusted net earnings(1) were $8.1 million or $0.02 per common share, after making adjustments
for certain non-cash and other items.
- Operating cash flow before changes in working
capital(1) was $24.2
million or $0.06 per
share.
- Working capital decreased to $140.2
million at December 31, 2013
(which included $104.0 million of
cash and cash equivalents) from $480.7
million at September 30, 2013,
primarily as a result of closing the transaction to acquire the
Pinto Valley Mine on October 11,
2013.
- Produced a total of 56.9 million pounds of payable copper at an
estimated C1 cash cost(1) of $1.78 per pound of payable copper produced.
- Revenue of $136.8 million on the
sale of 44.4 million pounds of copper, 4.3 million pounds of zinc,
0.2 million pounds of lead, 2,100 ounces of gold and 446,000 ounces
of silver.
Production Outlook
Capstone's 2014 guidance for Cozamin and Minto is 38,500 tonnes (± 5%) of copper
contained in concentrates at a C1 cash cost(1) of
$1.85 to $1.95 per pound of payable
copper, net of by-product credits and selling costs. Pinto Valley
guidance will follow before the end of the first quarter.
Conference Call and Webcast Details
Capstone will host a conference call and webcast on Friday, February 21, 2014 at 9:30 am Eastern Time (6:30
am Pacific Time).
Date: |
Friday, February 21, 2014 |
Time: |
9:30 am Eastern Time -- 6:30 am Pacific Time |
Dial in: |
North America: 1-888-390-0546, International:
+1-416-764-8688 |
Webcast: |
http://www.newswire.ca/en/webcast/detail/1282857/1415355 |
Replay: |
North America: 1-888-390-0541, International:
+1-416-764-8677 |
Replay Passcode: |
099750 |
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The conference call replay will be available until March 7, 2014. 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 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 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 "may", "future", "expected", "intends" and
"estimates". 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 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 under
the Company's profile 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. The Company provides 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 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, 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 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 year ended December 31, 2013 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 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.
----------------------------------------------------
(1) These are alternative performance measures;
please see "Alternative Performance Measures" at the end of this
release.
SOURCE Capstone Mining Corp.