VANCOUVER, May 7, 2014 /PRNewswire/ --
(All amounts in US$ unless otherwise specified)
Capstone Mining Corp. ("Capstone") (TSX: CS) today announced its
financial results for the three months ended March 31, 2014, posting a loss of $4.4 million due to a non-cash ore stockpile
write-down. Operating cash flow before changes in working
capital(1) was $47.1
million compared to $20.1
million in the first quarter of 2013. Copper production for
the quarter at Capstone's three operating mines, Pinto Valley,
Cozamin and Minto, totalled 27,644
tonnes of copper in concentrates and cathode (26,635 tonnes of
payable copper) at a C1 cash cost(1)of $1.89 per payable pound of copper produced.
Capstone will hold a conference call and webcast on
Thursday, May 8, 2014 at 11:30 am Eastern Time (8:30 am Pacific Time) to discuss these results;
call-in details are provided at the end of this release. This
release should be read in conjunction with Capstone's unaudited
condensed interim consolidated financial statements and
management's discussion and analysis ("MD&A") for the three
months ended March 31, 2014, which
are available on Capstone's website at:
http://capstonemining.com/s/financial-statements.asp and on SEDAR.
An updated corporate presentation, including results to
March 31, 2014, will also be
available at http://capstonemining.com/s/presentations.asp.
NOTE: The transaction to acquire the Pinto Valley Mine
closed on October 11, 2013 and
therefore its results of operations are included in the Company's
reported results from that date forward. As such, there are no
comparable Q1 2013 figures for the Pinto Valley Mine.
Overview
Q1 2014 Q1 2013
Revenue ($ millions) 160.8 57.7
Copper in concentrates produced (tonnes) 27,023 8,430
Copper cathode produced (tonnes) 621 -
Payable copper produced (tonnes) 26,635 8,111
C1 cash cost per payable pound of copper produced(1) ($) 1.89 1.72
Copper sold (tonnes) 26,601 6,894
Realized copper price per pound sold ($) 3.09 3.51
Net (loss) earnings ($ millions) (4.4) 6.9
Net (loss) earnings per common share ($) (0.01) 0.02
Adjusted EBITDA(1) ($ millions) 55.5 23.6
Adjusted EBITDA(1) per common share ($) 0.15 0.06
Operating cash flow before changes in working capital(1) ($ millions) 47.1 20.1
Operating cash flow before changes in working capital per common
share(1) ($) 0.13 0.05
Net debt (cash)(1) ($ millions) 175.5 (485.4)
"With all three of our mines operating very well in the first
quarter, we generated operating cash flow before changes in working
capital of $47 million," said
Darren Pylot, President and CEO of
Capstone. "That strong cash flow allowed us to reduce our net debt
to $175 million, while retaining a
cash balance of $136 million."
"We marked a significant milestone in the first quarter with the
Pinto Valley pre-feasibility study extending the mine life an
additional eight years to 2026," continued Mr. Pylot. "With the
mine life confirmed and the operation now stabilized at its
targeted run rate, we can fully turn our attention to efficiencies
at the mine and commence our planning for the potential long-term
operation beyond 12 years."
Financial and Production Highlights for the Three Months
Ended March 31, 2014
- Net loss of $4.4 million or
$0.01 per common share which
included:
- Earnings from mining operations of $17.1
million,
- Realized copper price of $3.09
per pound.
- Production costs included a $10.0
million non-cash charge related to the write-down of ore
stockpile inventory at Minto,
- $7.8 million tax expense.
- Adjusted EBITDA(1) of $55.5
million or $0.15 per common
share after making adjustments for certain non-cash and other
items.
- Operating cash flow before changes in working
capital(1) of $47.1
million or $0.13 per common
share.
- Working capital increased to $140.3
million at March 31, 2014
(which included $135.7 million of
cash and cash equivalents) from $137.4
million at December 31,
2013.
- Production of 26,658 tonnes of payable copper at a C1 cash
cost(1) of $1.89 per pound
of payable copper produced.
- Revenue of $160.8 million
generated primarily from the sale of 26,601 tonnes of payable
copper.
Operational Highlights for the Three Months Ended
March 31, 2014
Pinto Valley Mine:
- Produced 16,701 tonnes of copper in concentrates and 621 tonnes
of copper cathode at a C1 cash cost(1) of $2.06 per pound of payable copper, a 20 cent per pound reduction relative to the
fourth quarter of 2013. This trend is expected to continue as the
operation completes its ramp-up, begins to take advantage of the
conversion to its own operating system at the end of February and
gathers momentum from productivity improvement initiatives begun
following the transaction in Q4 2013.
- Completed the Pinto Valley Phase 2 prefeasibility study ("PV2
PFS") in March 2014, extending the
mine life at Pinto Valley to 2026, at an average annual production
of 54,200 tonnes of copper in concentrate and 2,900 tonnes of
copper cathode, at a C1 cash cost(1) of $2.00 per pound of payable copper.
Cozamin Mine:
- Produced 5,101 tonnes of copper in concentrates at a C1 cash
cost(1) of $1.23 per pound
of payable copper, demonstrating an ability to control on-site cost
inflation and maintain its second quartile cost position.
Minto Mine:
- Produced 5,221 tonnes of copper in concentrates at a C1 cash
cost(1) of $1.94 per pound
of payable copper as compared to $2.50 per pound in Q1 2013 as a result of strong
throughput, better grades and effective cost control.
Santo Domingo Project:
- Work on the Feasibility study ("FS") and engineering continued,
with the FS on target for completion mid-year 2014.
Greenfield Exploration:
- Exploration work continued during Q1 2014 at both the Project
Providencia in Region II, Chile
and the Cumbral Project (Westminster Resources Ltd. Option) in
Sonora, Mexico. Capstone is now in
receipt of the airborne magnetic, VTEM and radiometric surveys and
is executing a large ground follow-up program of mapping and
geochemistry at Providencia while
diamond drilling commenced at the Cumbral porphyry project.
Production Outlook
Capstone's 2014 guidance for 102,000 tonnes ±5% of copper in
concentrates and 2,800 tonnes of cathode, at a C1 cash
cost(1) of $1.90 to $2.00
per pound of payable copper, net of by-product credits and selling
costs, remains unchanged.
Conference Call and Webcast Details
Capstone will host a conference call and webcast on Thursday, May 8, 2014 at 11:30 am Eastern Time (8:30 am Pacific Time).
Date: Thursday, May 8, 2014
Time: 11:30 am Eastern Time (8:30 am Pacific Time)
Dial in: North America: 1-888-390-0546, International: +416-764-8688
Webcast: http://www.newswire.ca/en/webcast/detail/1321109/1459105
Replay: North America: 1-888-390-0541, International: +416-764-8677
Replay Passcode: 667588
The conference call replay will be available until May 22, 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,
focused on copper. We are committed to the responsible development
of our assets and the environments in which we operate. Our three
producing mines are the Pinto Valley copper mine located in
Arizona, US, the Cozamin
copper-silver mine in Zacatecas State, Mexico and the Minto copper mine in Yukon, Canada. In addition, Capstone has two
copper development projects; the large scale 70% owned copper-iron
Santo Domingo project in Region
III, Chile, in partnership with
Korea Resources Corporation, and the 100% owned copper-zinc Kutcho
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
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 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 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. 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
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 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 March 31, 2014 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.
For further information:
Cindy Burnett, VP, Investor
Relations and Communications
+1-604-637-8157
cburnett@capstonemining.com