VANCOUVER, June 4, 2014 /PRNewswire/ --
(All amounts in US$ unless otherwise specified and reflect 100%
of the project)
Capstone Mining Corp. ("Capstone") (TSX: CS) today announced the
results of the Feasibility Study ("FS") for its Santo Domingo Iron
Oxide-Copper-Gold ("IOCG") project ("Santo Domingo" or the "Project") in Region
III, Chile. The Project is owned
70% by Capstone and 30% by Korea Resources Corporation
("KORES").
"This Feasibility Study confirms the value of the Santo Domingo
Project," said Darren Pylot, President and CEO of Capstone.
"This positive study shows an unlevered Internal Rate of Return of
17.9% (27.3% assuming $1 billion of
project debt or 60% leverage) at an initial capital cost of
$1.7 billion, consistent with our
previously issued capital guidance."
"We believe the Santo Domingo Project provides an attractive
opportunity for Capstone in a jurisdiction and local community that
continues to demonstrate strong support for the project. We will
proceed in a very measured and disciplined manner with a number of
steps in our stage-gate process to be completed prior to large
capital expenditure commitments. The positive Feasibility Study,
combined with the initial regulatory response to the Environmental
Impact Assessment ("EIA") that was filed in October 2013, gives us the confidence to advance
the project to the next stage-gate decision point in early 2015. We
believe this is a low-risk and relatively low-cost approach to
increase the value and maintain the optionality of the project,"
continued Mr. Pylot.
"Important objectives for the next stage of the project
development include execution of a power purchase agreement,
approval of the Environmental Impact Assessment and a continued
demonstrated social license for the project. We will also assess an
optimal financing structure for the project prior to reaching the
next decision point in 2015."
Highlights
- Copper production will average 248 million pounds in the first
five years of full production. For the life of mine ("LOM"),
average annual copper production is 128 million pounds with 4.2
million tonnes of iron concentrate and 16,000 ounces of
gold.
- After-tax net present value ("NPV"), discounted at 8%, of
$797 million.
- Unlevered after-tax internal rate of return ("IRR") of 17.9%
with a payback period of 4.2 years. Assuming $1 billion of project level debt - an amount that
can be comfortably supported by the project - the IRR increases to
27.3%.
- C1 cash
production costs(1) are
estimated to be $0.49 per pound of
payable copper (net of magnetite iron and gold by-product credits
and selling costs) in the first five years of full production and
negative $0.06 per pound of payable
copper LOM. On a co-product basis, total cash production costs are
estimated at approximately $1.50 per
pound of payable copper and $43.00
per tonne of magnetite iron concentrate.
- Total initial capital costs are estimated to be $1.7 billion, which includes a 16.5% contingency
on total costs.
- Sustaining capital over the LOM is expected to be $368 million.
- 18-year mine life with operations expected to commence two
years after a final construction decision.
- Nominal average LOM plant throughput rate of
60,500 tonnes per day.
- Off-take agreements (at market pricing) committed for 50% of
the copper and 50% of the iron concentrate, LOM, as part of the
strategic partnership with KORES for development of the
Project.
- Metal price assumptions used for the FS were a constant
$2.85 per pound of copper,
$85 per tonne of magnetite
iron concentrate at a 65% iron content FOB Santo Domingo port
($1.31 per dry
metric tonne unit ("dmtu") of iron), and $1,275 per ounce of gold.
Feasibility Study
The Santo Domingo FS was completed using engineering and
consulting firms experienced in the Chilean mining industry (AMEC
International Ingeniería y Construcción Ltda.,
BRASS Chile S.A., Knight Piesold S.A.,
NCL Ingeniería y Construcción Ltda.,
PRDW Aldunate-Vásquez Ingenieros Ltda. and
Roscoe PostleAssociates Inc.), with significant contributions
to the report made by authors detailed below in "Qualified
Persons". The report was compiled by AMEC's Santiago office with an accuracy range of -10%
to +15% for capital and operating costs. The estimates presented in
the FS are current as of October
2013. The capital cost estimates were also independently
reviewed by two global Engineering, Procurement and Construction
Management ("EPCM") firms, adding support to Capstone's confidence
in the quality of the estimates.
The Santo Domingo Project will include development of two open
pit mines using conventional drilling, blasting, loading with
diesel hydraulic shovels, and truck haulage, and a copper-iron
concentrator designed to process a nominal
65,000 tonnes per day ("tpd") to
60,000 tpd (throughput is reduced in the latter years as
the ore becomes slightly harder) using SAG and ball milling, with
conventional flotation utilizing seawater to produce a copper
concentrate. Magnetite iron will be recovered from the copper
rougher tailings using Low Intensity Magnetic Separation ("LIMS").
The planned infrastructure for the Project also includes a tailings
storage facility; an iron concentrate pipeline and a seawater
supply pipeline; a port-located magnetite iron concentrate filter
plant and stockpile; a port-located copper concentrate storage
building; ship loading facilities; and on-site and off-site
infrastructure and support facilities.
The mine and the process facility will be located
50 kilometres southwest of Codelco's El
Salvador copper mine and 130 kilometres north-northeast
of Copiapó, near the town of Diego de Almagro. The
elevation at the site varies between 1,000 metres above
sea level ("masl") and 1,280 masl with relatively gentle
topographic relief. Access to the project is
one kilometre off the paved highway C-17 from Diego
de Almagro to Copiapó. The magnetite filter plant
and stockpile, the copper storage building and port infrastructure
will be located in Punta Roca Blanca, 41 kilometres north
of Caldera. The name of the proposed port development is
Port Santo Domingo.
For the first five years of full operation, Santo Domingo will have an annual average
production of approximately 248 million pounds, or approximately
110,000 tonnes, of copper. The LOM average is 128 million
pounds of copper (approximately 58,000 tonnes) per year over a
period of approximately 18 years. The total LOM production is
estimated at 2.3 billion pounds, or approximately 1
million tonnes, of copper.
For the first five years of full operation the average magnetite
concentrate production is estimated to be 3.3 million dry
metric tonnes ("dmt"). The iron ore concentrate
production will increase to an average of 4.2
million dmt per year over the mine life with a total
estimated production of approximately 75.1 million dmt of
iron concentrate.
Mineral Resource Estimate
David W. Rennie of Roscoe Postle Associates
Inc. ("RPA") (then Scott Wilson RPA) prepared the initial Mineral
Resource estimates for the property in 2006 and 2007. Since then
RPA has carried out several updated resource estimates, with the
most recent being in August 2012. The
current Mineral Resource estimate of August
2012 for the property is summarized below.
Mineral Resources, August 31,
2012, Santo Domingo Property
Zone Mt %CuEq %Cu g/t Au %Fe
Measured (SDS/Iris)
SDS (1-4) 63.3 0.95 0.62 0.083 31.3
Iris (5-6) 1.54 0.46 0.43 0.052 25.3
Total Measured 64.8 0.94 0.62 0.082 31.2
Indicated
SDS (1-4) 214 0.72 0.33 0.045 27.4
Iris (5-6) 111 0.63 0.19 0.028 26.0
Iris Norte (7-8) 92.3 0.67 0.12 0.015 26.7
Indicated (SDS/Iris) 417 0.68 0.25 0.033 26.9
Estrellita 31.7 n/a 0.53 0.050 n/a
Total Indicated 449 - 0.27 0.034 25.0
Measured and Indicated 514 - 0.31 0.040 25.8
Inferred
SDS (1-4) 29.8 0.55 0.26 0.037 23.6
Iris (5-6) 5.05 0.60 0.18 0.024 26.7
Iris Norte (7-8) 20.5 0.70 0.08 0.009 28.0
Inferred (SDS/Iris) 55.4 0.61 0.19 0.025 25.5
Estrellita 2.7 n/a 0.48 0.050 n/a
Total Inferred 58.1 - 0.20 0.026 24.3
(1) CIM definitions (2010) were followed for Mineral Resources
and are inclusive of Mineral Reserves. (2) Totals may not add due
to rounding. (3) Mineral Resources for SDS/Iris are estimated at a
cut-off grade of 0.25% CuEq. The cut-off grade
for Estrellita was 0.3% Cu. (4) CuEq grades are
calculated using average long term prices of US$3.50/lb Cu, US$1,500/oz Au and US$1.94/dmtuFe (US$120/dmt conc. at 62% Iron).
The estimate was carried out using a block model constrained by
three dimensional wireframe envelopes. The wireframes were
constructed primarily from lithological boundaries. The principal
rock types used for these models were the manto-hosting
volcanic and sedimentary units which were clipped against fault
boundaries and wireframe models of post-mineral dykes or sills.
Eight domains were created within the deposit and three of these
(Zones 1, 2 and 3) were further subdivided into magnetite-rich and
magnetite-poor variants. Much of the geological interpretation had
been done for the 2009 and previous estimates. For the current
estimate the wireframe modelling consisted of updating the earlier
work with the latest drilling results. RPA notes that only minor
modifications to the interpretations were required.
Grades for copper, gold, total iron and magnetic susceptibility
(MS) were estimated into the blocks using
Ordinary Kriging (OK). Estimates of recoverable iron
(Fe_rec) and bulk density were carried out from the estimated iron
and MS grades using linear regression relationships. Copper
equivalent (CuEq) grades were calculated from the estimated Cu, Au,
and Fe_rec, using recoveries estimated from recent
metallurgical testing.
The Mineral Resources for SDS/Iris were reported at a cut-off
grade of 0.25% CuEq, which is consistent with the previous
estimate.
Readers are advised that Mineral Resources that are not Mineral
Reserves do not have demonstrated economic viability. Mineral
Resource estimates do not account for mineability,
selectivity, mining loss and dilution. These Mineral Resource
estimates include inferred Mineral Resources that are normally
considered too speculative geologically to have economic
considerations applied to them that would enable them to be
categorized as Mineral Reserves. Even though test mining has been
undertaken in areas with Measured and Indicated class Mineral
Resources, there is no certainty that inferred Mineral Resources
will be converted to Measured and Indicated categories through
further drilling, or into Mineral Reserves, once economic
considerations are applied.
Mineral Reserve Estimate
Carlos Guzmán, (FAusIMM of
NCL Ingeniería y Construcción Ltda.) prepared
the following Mineral Reserve estimate, effective May 2, 2014. Based on the Mineral Resource
estimate, a standard methodology for pit limit analysis, mining
sequence, and cut-off grade optimization, including application of
mining dilution, process recovery, economic criteria and physical
mine and plant operating constraints, has been followed to design
the open pit mines and determine the Mineral Reserve estimate for
each deposit as summarized in the Mineral Reserve table.
Mineral Reserves
Reserve Category Ore Grade Contained Metal
Ore Cu Fe Au Cu Fe Conc. Au
(Mt) (%) (%) (g/t) (Mlbs) (Mt) (kOz)
Proven Reserves 65.3 0.61 30.9 0.08 878.3 8.2 169.9
Probable Reserves 326.4 0.24 27.6 0.03 1,692.1 66.9 336.4
Total Reserves 391.7 0.30 28.2 0.04 2,570.4 75.1 506.3
(1) Mineral Reserves are reported as constrained within Measured
and Indicated pit designs, and supported by a mine plan featuring
variable throughput rates and cut-off optimization. The pit designs
and mine plan were optimized using the following economic and
technical parameters: metal prices of $2.75/lb Cu, $1,275/oz Au and $80/dmt of Fe concentrate; recovery to
concentrate assumptions of a maximum of 93.6% for Cu and 75% for Au
with magnetite concentrate recovery varying on a block-by-block
basis; copper concentrate treatment charges of $70/dmt, $0.07/lb of Cu refining charges,
$5.0/oz of Au refining charges,
$48/wmt and $3/wmt for shipping Cu and Fe concentrates
respectively; mining cost of $1.53/t;
process and G&A costs of $7.84/t
ore processed; average pit slope angles that range from 37.6º to
43.6º; a 2% royalty rate assumption, and an assumption of 100%
mining recovery. (2) Rounding may result in apparent summation
differences between tonnes, grade and contained metal content.
(3) Tonnage and grade measurements are in metric units. Contained
gold ounces are reported as troy ounces.
Mine Production Schedule
The final pit design was based on a Lerchs-Grossman shell
run at a copper price of $2.75 per
pound and $80 per tonne for
magnetite concentrate. Two pits (the Santo Domingo pit and the Iris Norte pit) were
designed for the most economic extraction of the resources.
The total annual material movement from the mine peaks at 107.5
million tonnes per year during Years 1 to 4. The limit on
the ore production is the number of benches that it is possible to
mine in a year in a single phase, or vertical development per
phase.
The Mine Production Schedule Summary and the Plant Feed
Production Schedule can be accessed HERE.
The cash flow model is supported by a mine plan developed to an
annual level of detail. Approximately 45
million tonnes of material would be pre-stripped in the
year prior to start-up of operations. The life of mine plan
contemplates mining of 1.7 billion tonnes of material
consisting of 1.3 billion tonnes of waste rock and
overburden and 0.4 billion tonnes of ore over an 18 year
mine life. The overall strip ratio for the project is 3.3:1. The
plan developed for the project mines higher copper grades in the
first five years of the mine life with progressively lower copper
grades and higher iron grades for the remaining 13 years.
A detailed mine plan can be accessed HERE.
Processing
The copper and magnetite recovery plant and associated service
facilities will process run of mine ("ROM") ore delivered to a
primary crusher feeding a conventional process of crushing and
grinding of the ROM ore, copper flotation (in seawater), and
magnetite recovery from copper rougher tailings. Copper concentrate
will be produced at the process facility for trucking to (and
stockpiling at) the port. Magnetite concentrate will be thickened
on site prior to being pumped via a concentrate pipeline to the
port. At the port, the magnetite concentrate will be washed,
dewatered and stockpiled. Both the copper and magnetite
concentrates will be loaded onto ships for transportation to
third-party smelters.
Grinding and flotation testwork has established mill
design parameters and copper recovery estimates for the study. The
mill will process a total of 392 million tonnes of ore
over an approximate 18-year mine life at an average grade of 0.30%
copper, 0.04 grams per tonne gold, and 28.2% iron. Mill
throughput will vary from 65,000 tonnes per day in the
first five years, to 60,000 tonnes per day in the latter
years when throughput will be reduced as the ore becomes slightly
harder. Average mill throughput over the 18-year mine life is
projected to be 60,500 tonnes per day. Metal recoveries
for copper and gold are estimated at 89.1% and 56.3% respectively,
averaged over the mine life.
Iron recovery was determined from magnetic separation testing on
the copper flotation rougher tailings. Iron recoveries vary
directly with the mineralogy of the iron present in the ore. The FS
does not consider any process to recover the specular hematite
portion of the iron. Therefore, iron recovery is presented in terms
of the total mill feed mass recovery. For the life of the project
this averages 19.2%, and ranges from a low of 10.1% in year five of
the project to a high in excess of 25% in the last four years of
the project. Testing indicates that a magnetite concentrate grading
65% iron can be maintained throughout the life of the project. All
metallurgical data used in the development of the recovery and
concentrate grade estimates for the cash flow models are based on
tests conducted using seawater.
An annual production schedule
showing tonnes processed, grades and recoveries can be
accessed HERE.
The tailings storage system will consist of a tailings storage
facility ("TSF") located north of the proposed mine. The TSF is
designed to store approximately 314 million tonnes of
conventional thickened tailings, which is sufficient capacity for
the approximately 18 years of the project life. Storage of both
seawater and process water is proposed in lined ponds near the
plant site. Water make-up is proposed to be untreated seawater.
Based on the conventional thickened tailings disposal method, the
estimated water make-up will be approximately 1,280
m3/h (~355 L/s).
Offsite Infrastructure and Services
The FS envisages a greenfield port to be located in
the Punta Roca Blanca area (Port Santo
Domingo) on the coast 41 kilometres north of
Caldera in the Atacama Region. This site will include the terminal
station of the concentrate pipeline, storage tanks and filter plant
for magnetite concentrate, a copper concentrate storage building, a
magnetite concentrate stockpile, seawater intake, integrated
building (offices, laboratories, change house and lunch room),
guard checkpoint, workshop and warehouse; and ancillary facilities
to support the operation. The port facility has been designed to
accommodate the current maximum throughout requirements of 5.4
million tonnes per annum. In addition, there is another
35% of capacity available for third party use. Capstone is seeking
a partner to share the capital costs of the port; however 100% of
the capital has been included in the FS.
The Santo Domingo Project will be designed to use seawater,
which will be pumped to the mine/process site via a
111.5 kilometre long pipeline from a pump station to be
located at Port Santo Domingo.
While the flotation process will use seawater, there will be small
desalination plants at both the site and at the port to provide
water where seawater cannot be used (i.e. for potable water,
reagent mixing, copper concentrate washing at site, and magnetite
washing at the port).
A magnetite concentrate pipeline will transport magnetite
concentrate from the process plant to the filter plant at the port
via a pipeline starting at an elevation of 1,027 masl and
ending at the port at an elevation of 16 masl. The copper
concentrate will be trucked from the site to Port Santo Domingo.
Both the water and the concentrate pipelines will use the same
right-of-way and will run parallel to existing roads for the
majority of the distance from the mine area to the port. The
pipeline route will largely follow the valleys with the single
route high point located approximately 45 kilometres from
the mine site near Anglo American's Mantoverde mine
operation.
A 220 kV transmission line has been designed to supply power
from the Diego de Almagro substation to the Santo Domingo site. The line is
8.9 kilometres long, running underground for the first
0.5 kilometres.
Access to the mine site is six kilometres south of
Diego de Almagro on Highway C-17. This section is paved
and in good condition. Due to the location of the planned Iris
Norte pit, process facility and tailings storage facility,
approximately 18.7 kilometres of the existing C-17 road
will require relocation. The existing C-17 road will remain in
service during the relocation effort. In addition, a new bypass
road will be built around Diego de Almagro to minimize
traffic impacts from the project. The Diego
de Almagro bypass is approximately
4.7 kilometres in length and will be built in the early
stage of the project.
Power
Santo Domingo's mine and port
sites will be connected to the Central Interconnected System
(Sistema Interconectado Central or "SIC") which covers
the central part of Chile and has
coal and diesel thermoelectric plants in the project area. The
closest connection point between the SIC and the mine site is via a
direct connection to the Diego de Almagro substation,
located about five kilometres from the mine area.
The FS has assumed a cost for power of $0.124 per kWh, which is consistent with rates
being discussed in current negotiations with potential power
providers. The estimated annual average operational power demand
for both the mine and port is 86 MW, with a maximum (peak) demand
of 112 MW.
Capital Cost Estimate
The initial capital cost has been estimated at $1.7 billion and is shown in the following table.
This estimate is based upon a foreign exchange rate of between 517
and 557 Chilean Pesos ("CLP") to US$1.00 during the development period of 2014
through 2017, with a constant 532 CLP
to US$1.00 foreign exchange rate from
the start of operations in 2018 to the end of the life of mine. The
initial capital cost estimate was independently reviewed by two
global EPCM companies, with the completed reviews confirming the
estimate is within the accuracy range of -10% to +15%.
Total Amount
Description (k$)
Mine Equipment 105,853
Mine Pre-Production Stripping 51,143
Crushing 44,020
Grinding 134,702
Flotation 60,844
Magnetic Separation 39,016
Thickening and Tailings Handling 56,147
Reagents 9,056
Copper Concentrate 12,697
Tailings Storage Facility 23,575
Plant/Mine Infrastructure 163,382
Seawater Pipeline 84,861
Magnetite Concentrate Pipeline 87,560
Port - Process 31,673
Port - Concentrate Handling/Loading 120,546
Port - Infrastructure 28,225
Total Direct Cost 1,053,300
Development - Indirects 183,122
EPCM Costs 115,323
Owner Costs 105,721
Contingency (16.5% of total costs) 242,306
Total Indirect Costs 646,472
TOTAL PROJECT 1,699,772
Mine pre-production stripping costs are estimated at
$51 million and are included in the
Capital Cost Estimate. Life of mine sustaining capital,
estimated at $368 million over the 18
year mine life, is not included in the above figure. Mine closure
costs have been estimated at $92
million and have been allowed for in operating costs.
Total Project Operating
Costs (1)
LOM LOM C1 Cost
LOM Total Average ($/lb payable
Summary of Cash Costs (k) ($/t) Cu)
Mining 2,471,905 6.31 1.12
Process 2,725,682 6.96 1.23
G&A 439,567 1.12 0.20
Cu Concentrate Transport
(onshore
& offshore), Insurance &
Sales 272,230 0.69 0.12
Sub-Total 5,909,384 15.09 2.67
By-Product Metal Credits (3.05)
TC/RC Costs 0.32
TOTAL - C1 Cu Cash Cost (1)
(net of Fe & Au by-product credits) (0.06)
(1) These are alternative performance
measures; please see "Alternative Performance Measures" at the end
of this release.
As shown, the estimated total C1 cash production costs for
copper over the life of the project are estimated at a negative
$0.06 per pound of payable copper,
when including gold and iron credits. The co-product total cash
production costs are estimated at approximately $1.50 per pound of payable copper and
$43.00 per tonneof magnetite
concentrate.
Sensitivities
Parameter EBITD&A After-Tax
or IRR NPV IRR NPV
Variation Value (%) @ 8.0% (%) @ 8.0%
($M) ($M)
Copper Price ($/lb)
-20% $2.28 14.8% 597.0 12.5% 368.2
-10% $2.57 18.1% 875.6 15.2% 583.9
Base Case $2.85 21.3% 1,154.1 17.9% 797.4
10% $3.14 24.6% 1,432.6 20.6% 1,008.1
20% $3.42 27.7% 1,711.2 23.2% 1,217.7
Magnetite Iron Price ($/dmtu Fe)
-20% $1.05 17.6% 739.8 14.7% 482.9
-10% $1.18 19.5% 946.9 16.4% 641.0
Base Case $1.31 21.3% 1,154.1 17.9% 797.4
10% $1.44 23.0% 1,361.3 19.4% 953.1
20% $1.57 24.6% 1,568.4 20.7% 1,108.1
Total Operating Costs ($/t LOM average)
-20% $11.81 25.0% 1,546.7 21.0% 1,091.5
-10% $13.29 23.2% 1,350.4 19.5% 945.2
Base Case $14.76 21.3% 1,154.1 17.9% 797.4
10% $16.24 19.4% 957.8 16.3% 647.6
20% $17.72 17.3% 761.5 14.5% 496.6
Initial Capital Costs ($M)
-20% $1,359.8 27.2% 1,398.7 23.5% 1,043.3
-10% $1,529.8 24.0% 1,276.4 20.5% 920.3
Base Case $1,699.8 21.3% 1,154.1 17.9% 797.4
10% $1,869.7 19.0% 1,031.8 15.8% 674.4
20% $2,039.7 17.1% 909.5 13.9% 551.4
Power Cost ($/kWh)
-20% $0.099 23.1% 1,340.3 19.4% 937.6
-10% $0.112 22.3% 1,252.4 18.7% 871.6
Base Case $0.124 21.3% 1,154.1 17.9% 797.4
10% $0.136 20.2% 1,045.5 17.0% 714.9
20% $0.149 19.0% 926.5 16.0% 623.6
Permitting
On October 29, 2013, Capstone
formally submitted the Environmental Impact Assessment for the
Santo Domingo project. This
initiated the formal environmental assessment process, which is
expected to take approximately 15 to 18 months. For purposes of the
FS schedule a period of 16 months has been estimated. A critical
permit for the operation of the port, the Maritime Concession, is
expected to be granted in the fourth quarter of 2014.
Next Steps
Over the course of the next 10 months leading up to completion
of the first stage-gate decision point, Capstone will focus on:
- Advancing project engineering.
- Working with regulators and communities to obtain approval for
the EIS and secure the required social license.
- Securing a long-term power purchase agreement.
- Developing detailed marketing studies leading to expressions of
interest and/or letters of intent for at least 75% of the
operation's output.
- Securing the port concession.
- Developing a robust project execution plan, including the
assessment and selection of available EPC and EPCM options for the
construction of all or portions of the project.
- Assessing project and corporate financing alternatives.
The next gate will be the approval of the EIS, which is
anticipated at the end of the first quarter of 2015. The second
gate will be when engineering is advanced to approximately 60% to
65% with an estimate accuracy of ±10%, expected in the third
quarter of 2015. The final gate will be at the point when
engineering is effectively complete with a definitive cost estimate
of +10%/-5%, which is expected to be in the first quarter of 2016.
At each gate Capstone will evaluate the status of the Project and
communicate the next steps. Each decision will reflect, among other
factors, the progress made in the areas outlined above, general and
project specific market conditions, the financing market, project
economics and alternatives available to the company at that time.
The decisions will be targeted at maximizing the value of the
project to Capstone shareholders in a manner that ensures financial
flexibility for continued growth and security for the Company's
existing operations.
Technical Report
The Technical Report that will be prepared in compliance with
National Instrument 43-101 ("NI 43-101"), which will be based on
the full Santo Domingo Feasibility Study, will be filed under
Capstone's profile on SEDAR
at http://www.sedar.com within 45 days.
Conference Call and Webcast Details
Capstone will host a conference call and webcast for investors
and analysts to discuss the Santo Domingo FS on Thursday, June 5, at 10:30
am Eastern Time (7:30 am Pacific
Time).
Date: June 5, 2014
Time: 10:30 am Eastern Time (7:30 am Pacific Time)
Dial in: North America: 1-888-390-0546, International: +416-764-8688
Webcast: http://www.newswire.ca/en/webcast/detail/1362829/1508465
Replay: North America: 1-888-390-0541, International: +416-764-8677
Replay Passcode: 775404
The conference call replay will be available until June 19, 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 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 expected timing for commencement of
construction of the Santo Domingo Project, the market for project
debt as contemplated by the Capstone/KORES development agreement
for Santo Domingo, Capstone's
ability to raise its equity contribution to the project, 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,
the timing of the receipt of permits, the timing and terms of a
power purchase agreement, 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", "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 Santo Domingo project and
current and future commodity prices and exchange rates. 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, changes in project
parameters as plans continue to be refined; future prices of
commodities; possible variations in mineral 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, financing or in the
completion of development or construction activities; objections by
the communities or environmental lobby of the Santo Domingo project and associated
infrastructure 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.
Qualified Persons
The following qualified persons (QPs) have reviewed the content
of this news release and will be responsible for the preparation of
their relevant portions of the Technical Report that will be based
on the FS:
- David
Frost, FAusIMM (AMEC Ingeniería y Construcción Ltda.)
- Hans Gopfert, RM CMC
(AMEC Ingeniería y Construcción Ltda.)
- Joyce Maycock,
P. Eng (AMEC Ingeniería y Construcción Ltda.)
- Vikram Khera,
P. Eng (AMEC Ingeniería y Construcción Ltda.)
-
Anna Klimek, P.Eng (AMEC Ingeniería y Construcción Ltda.)
- Roy G. Betinol, P.E. (BRASS Chile S.A.) - Seawater and
Magnetite Concentrate Pipeline System
-
Carlos Guzmán, FAusIMM (NCL Ingeniería y Construcción Ltda.)
- Mineral Reserve Model, Mine Equipment and Mine Development
- Tom Kerr, P.E. (Knight Piésold S. A.) - Tailings
Storage Facility
- David Rennie,
P. Eng (Roscoe Postle Associates Inc.) -
Mineral Resource Model
The technical information in this news release has been reviewed
by Court Muggli, P.E., Project Director, Capstone Mining
Corp., and Gregg Bush, P. Eng.,
Senior Vice President and Chief Operating Officer, Capstone Mining
Corp., both Qualified Persons under NI 43-101.
Readers are cautioned that the conclusions, projections and
estimates set out in this news release are subject to important
qualifications, assumptions and exclusions, all of which are
detailed in the Feasibility Study and Technical Report. To fully
understand the summary information set out above, the Technical
Report that will be filed on SEDAR
at http://www.sedar.com should be read in its
entirety.
Alternative Performance Measures
"Total C1 Cash Production Costs" and "Total Project Operating
Costs" are Alternative Performance Measures. These performance
measures are included because these statistics are key performance
measures that management uses to monitor performance. Management
uses these statistics to assess how the Company is performing to
plan and to assess the overall effectiveness and efficiency of
mining operations. These performance measures do not have a meaning
within International Financial Reporting Standards ("IFRS") and,
therefore, amounts presented may not be comparable to similar data
presented by other mining companies. These performance measures
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 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.