Operating cash flow before changes in working capital of
$56.5 million
Net earnings of $16.6 million or
$0.04 per share
(All amounts in US$ unless otherwise specified)
VANCOUVER, Aug. 7, 2014 /PRNewswire/ - Capstone Mining Corp.
("Capstone") (TSX: CS) today announced its financial results for
the three and six months ended June 30,
2014. Net earnings for the quarter were $16.6 million and operating cash flow before
changes in working capital(1) was a record $56.5 million. Copper production for the quarter
at Capstone's three operating mines, Pinto Valley, Cozamin and
Minto, totalled 27,738 tonnes of
copper in concentrates and cathode (26,785 tonnes of payable
copper) at a C1 cash cost(1) of $2.03 per payable pound of copper produced.
Capstone will hold a conference call and webcast on
Friday, August 8, 2014 at
11:30 am Eastern time (8:30 am Pacific time) to discuss these results;
call-in details are provided at the end of this release. This
release should be read in conjunction with Capstone's unaudited
condensed interim consolidated financial statements and
management's discussion and analysis ("MD&A") for the three and
six months ended June 30, 2014, which
are available on Capstone's website at:
http://capstonemining.com/s/financial-statements.asp and on SEDAR.
An updated corporate presentation, including results to
June 30, 2014, will also be available
at http://capstonemining.com/s/presentations.asp.
NOTE: The transaction to acquire the Pinto Valley Mine
closed on October 11, 2013 and
therefore its results of operations are included in the Company's
reported results from that date forward. As such, there are no
comparable Q2 2013 or 2013 YTD figures for the Pinto Valley
Mine.
Overview
|
Q2 2014 |
Q2 2013 |
2014 YTD |
2013 YTD |
Revenue ($ millions) |
171.7 |
58.3 |
332.5 |
115.9 |
|
|
|
|
|
Copper in concentrates produced
(tonnes) |
27,212 |
8,765 |
54,235 |
17,195 |
Copper cathode produced (tonnes) |
526 |
- |
1,147 |
- |
|
|
|
|
|
Payable copper produced (tonnes) |
26,785 |
8,419 |
53,444 |
16,530 |
C1 cash cost per payable pound of copper
produced(1) ($) |
2.03 |
1.70 |
1.96 |
1.71 |
|
|
|
|
|
Copper sold (tonnes) |
24,563 |
7,783 |
51,164 |
14,632 |
Realized copper price per pound sold ($) |
3.36 |
3.16 |
3.17 |
3.33 |
|
|
|
|
|
Net earnings ($ millions) |
16.6 |
9.2 |
12.2 |
16.2 |
Net earnings per common share ($) |
0.04 |
0.02 |
0.03 |
0.04 |
|
|
|
|
|
Adjusted EBITDA(1) ($
millions) |
64.8 |
28.8 |
121.2 |
52.8 |
Adjusted EBITDA(1) per common share
($) |
0.17 |
0.08 |
0.32 |
0.14 |
|
|
|
|
|
Operating cash flow before changes in
working
capital(1) ($ millions) |
56.5 |
28.6 |
104.7 |
49.4 |
Operating cash flow before changes in working
capital
per common share(1) ($) |
0.15 |
0.08 |
0.27 |
0.13 |
|
|
|
|
|
Net debt (cash)(1) ($
millions) |
181.0 |
(456.3) |
181.0 |
(456.3) |
"The second quarter shows a significant increase in cash flow
driven by higher copper sales, primarily from Pinto Valley, coupled
with consistent production from Cozamin and Minto," said Darren
Pylot, President and CEO of Capstone. "Year-to-date Adjusted
EBITDA(1) more than doubled year over year,
demonstrating Capstone's substantial growth over the last 12
months."
Financial and Production Highlights for the Three Months
Ended June 30, 2014
- Net earnings of $16.6 million or
$0.04 per common share which
included:
-
- Earnings from mining operations of $45.5
million,
-
- Realized copper price of $3.36
per pound.
- Production costs included a $1.8
million non-cash charge related to the write-down of
inventory at Minto,
- $15.2 million tax expense.
- Adjusted EBITDA(1) of $64.8
million or $0.17 per common
share after making adjustments for certain non-cash and other
items.
- Operating cash flow before changes in working
capital(1) of $56.5
million or $0.15 per common
share.
- Working capital increased to $162.8
million at June 30, 2014
(which included $128.5 million of
cash and cash equivalents) from $137.4
million at December 31,
2013.
- Production of 26,785 tonnes of payable copper at a C1 cash
cost(1) of $2.03 per pound
of payable copper produced.
- Revenue of $171.7 million
generated primarily from the sale of 24,563 tonnes of payable
copper.
Operational Highlights for the Three and Six Months Ended
June 30, 2014
Pinto Valley Mine:
- Produced 16,892 tonnes of copper in concentrates and 526 tonnes
of copper cathode during Q2 2014. The C1 cash
cost(1) was $2.13 per
pound of payable copper produced.
- Produced 33,593 tonnes of copper in concentrates and 1,147
tonnes of copper cathode during 2014 YTD at a C1 cash
cost(1) of $2.10 per pound
of payable copper produced.
- Pinto Valley's C1 cash cost(1) was negatively
impacted by the loss of production resulting from a failure of one
of six ball mills in May 2014 and its
associated downtime for 25 days. The daily average throughput
increased to 49,400 tonnes per day in June for a Q2 2014 average of
45,700 tpd versus a targeted rate of 50,000 tpd. Subsequent to
quarter end, July throughput averaged 49,300 tpd.
- Work is ongoing related to the implementation of improvements
identified by the Pinto Valley Phase 2 prefeasibility study ("PV2
PFS"), with the project execution plan in place, orders for the
majority of the mine equipment placed and detailed engineering
underway.
- Capstone believes there is potential to extend the mine life
beyond the PV2 reserve life of 2026 if Mineral Resources not
currently included in the PV2 life of mine plan can be successfully
converted into Mineral Reserves. The Pinto Valley Phase 3 ("PV3")
study was started in Q2 2014, and is composed of two phases. The
first phase of PV3 - planned for completion by year end 2014 - will
include high level mine plans, tailings storage and flow sheet
analysis for various throughput expansion cases.
Cozamin Mine:
- Produced 5,191 tonnes of copper in concentrates during Q2 2014
at a C1 cash cost(1) of $1.23 per pound of payable copper produced.
- Produced 10,292 tonnes of copper in concentrates during 2014
YTD at a C1 cash cost(1) of $1.23 per pound of payable copper produced.
- Exploration drilling from surface to test structural splays off
of the main Mala Noche vein system at Cozamin commenced in Q2 2014.
Many of these brownfield targets are on separate structures from
the one hosting Cozamin's reserves and resources.
- On August 5, 2014 Capstone filed
a technical report updating Mineral Resource and Mineral Reserve
estimates for Cozamin. The net impact was a reduction of
approximately $7 million in net asset
value.
Minto Mine:
- Produced 5,129 tonnes of copper in concentrates during Q2 2014
at a C1 cash cost(1) of $2.46 per pound of payable copper produced.
- Produced 10,350 tonnes of copper in concentrates during 2014
YTD at a C1 cash cost(1) of $2.20 per pound of payable copper produced.
Santo Domingo Project:
- Released the Feasibility Study in June
2014 (prepared on a 100% basis; Capstone owns 70%), which
had an after-tax net present value of $797
million (8% discount rate) and an after-tax internal rate of
return of 17.9% with a payback period of 4.2 years.
Greenfield Exploration:
- Exploration work continued during Q2 2014 at Project
Providencia in Region III, Chile.
Capstone completed the airborne magnetic, and versatile time domain
electromagnetic and radiometric surveys and is now preparing for a
drill program, forecasted to start in late 2014.
Production Outlook
Capstone's 2014 guidance for 102,000 tonnes ±5% of copper in
concentrates, 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
Date: |
|
|
Friday, August 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/1371699/1520925 |
Replay: |
|
|
North America: 1-888-390-0541, International:
+416-764-8677 |
Replay Passcode: |
|
|
057773 |
The conference call replay will be available until August 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. 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 three and six months ended
June 30, 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.
SOURCE Capstone Mining Corp.