(All amounts in US$ unless otherwise specified)
VANCOUVER, Feb. 16, 2016 /PRNewswire/ - Capstone Mining
Corp. ("Capstone") (TSX: CS) today announced its financial results
for the year ended December 31, 2015.
Operating cash flow before changes in working capital
(1) for the year was $60.0
million or $0.16 per share,
with a net loss of $251.5 million and
an adjusted net loss of $31.9 million
after adjusting for certain non-cash and non-recurring charges.
Copper production for the year totalled 92,600 tonnes (89,300
tonnes of payable copper) at a C1 cash cost (1) of
$1.99 per payable pound produced with
copper sales for the year of 87,500 tonnes at a C1 cash cost
(1) of $2.00 per payable
pound sold.
Capstone will hold a conference call and webcast
on Wednesday, February
17, 2016 at 11:30 a.m. Eastern time (8:30 a.m. Pacific time) to discuss these results;
call-in details and information on associated slides are provided
at the end of this release. This release should be read in
conjunction with Capstone's consolidated financial statements and
management's discussion and analysis ("MD&A") for the year
ended December 31, 2015, which are
available on Capstone's website at
http://capstonemining.com/investors/financial-reporting/default.aspx
and on SEDAR. An updated corporate presentation, including results
to December 31, 2015, in addition to
the 2015 year-end webcast slides, will also be available at
http://capstonemining.com/investors/events-and-presentations/default.aspx.
Overview
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Q4
2015
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Q4
2014
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2015
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2014
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Revenue ($
millions)
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92.1
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139.5
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420.5
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656.0
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Copper
produced (tonnes)
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25,691
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22,478
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92,577
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100,940
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Payable copper
produced (tonnes)
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24,781
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22,282
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89,341
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99,739
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C1 cash cost per
payable pound produced (1) ($)
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1.81
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1.88
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1.99
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1.93
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Copper sold
(tonnes)
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22,322
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23,705
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87,521
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103,901
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Realized copper
price per pound sold ($/lb)*
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2.05
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2.79
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2.35
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3.03
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Adjusted realized
copper price per pound sold ($/lb) **
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2.26
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2.79
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2.43
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3.03
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C1 cash cost per
payable pound sold (1) ($/lb)
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1.82
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1.87
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2.00
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1.89
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All-in sustaining
cost per payable pound sold (1) ($/lb)
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2.27
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2.55
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2.46
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2.32
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All-in cost per
payable pound sold (1) ($/lb)
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2.78
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2.80
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2.92
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2.49
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Fully-loaded
all-in cost per payable pound sold (1)
($/lb)
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2.78
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2.92
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2.89
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2.70
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Net loss ($
millions)
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(19.5)
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(34.4)
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(251.5)
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(22.4)
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Net loss
attributable to shareholders ($ millions)
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(19.3)
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(33.9)
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(202.7)
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(21.1)
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Net loss
attributable to shareholders per common share ($)
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(0.05)
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(0.09)
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(0.53)
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(0.06)
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Adjusted net
(loss) income (1) ($ millions)
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(8.0)
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(3.3)
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(31.9)
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32.0
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Adjusted net
(loss) income attributable to shareholders
(1) ($ millions)
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(7.8)
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(4.1)
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(30.4)
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30.8
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Adjusted net
(loss) income attributable to shareholders per common share
($)
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(0.02)
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(0.01)
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(0.08)
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0.08
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Adjusted
EBITDA (1) ($ millions)
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25.9
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40.4
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96.2
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231.6
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Adjusted EBITDA
(1) per common share ($)
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0.07
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0.11
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0.25
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0.61
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Operating cash
flow before changes in working capital (1) ($
millions)
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12.5
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30.7
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60.0
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199.4
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Operating cash
flow before changes in working capital per common share
(1) ($)
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0.03
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0.08
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0.16
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0.53
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Cash and cash
equivalents ($ millions)
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101.6
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150.1
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101.6
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150.1
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Net (debt)
cash (1) ($ millions)
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(247.9)
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(127.7)
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(247.9)
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(127.7)
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* Q4 2015 includes a negative provisional pricing adjustment
of $4.2 million (2014 – negative
$13.6 million) related to prior
shipments, equivalent to $(0.09) per
pound (2014 – $(0.26) per pound) of
copper sold during the quarter. YTD includes a
negative provisional pricing adjustment of $25.8 million (2014 –negative $11.2 million) related to prior shipments,
equivalent
to $(0.13) per pound (2014 –
$(0.05) per pound) of copper sold
during the year.** Adjusted realized copper price includes the
provisional pricing adjustments noted above and realized gains of
$10.1 million related to copper put
contracts exercised in
Q4 2015 (2014 – nil) and realized gains of $15.9 million related to copper put contracts
exercised in 2015 (2014 – nil).
"Despite very challenging market conditions for base metal
companies in 2015, we posted positive cash flow before changes in
working capital of $60 million," said
Darren Pylot, President and CEO of
Capstone. "We took a number of steps through the year to reduce
costs and improve reliability at our operations, with fourth
quarter throughput at Pinto Valley of 54,000 tonnes per day
surpassing our expectations and positioning the mine well for the
next planned expansion. In addition, we made several strategic
decisions throughout 2015 to preserve our financial flexibility,
including protecting our revenue through price fixing and zero-cost
copper collars, as well as suspending work on our Santo Domingo project until market conditions
improve."
"We ended the year in compliance with all of our debt
covenants," continued Mr. Pylot. "All of our mines are operating on
plan with significantly lower operating costs projected for 2016
and we remain focused on cost control and efficiencies across the
company. Our expected capital expenditures for 2016 are also
substantially lower as we completed the capital spending for
expansion in 2015 to set us up for the future. In addition, we have
a number of options to ensure liquidity and covenant compliance
should circumstances warrant."
Financial and Production Highlights for the Year Ended
December 31, 2015
- Net loss of $251.5 million which
included:
- Loss from mining operations of $30.5
million,
- Realized copper price of $2.35
per pound
- Production costs included a $24.2
million non-cash charge related to the write-down of
inventory at the Pinto Valley and Minto
Mines,
- A non-cash charge of $201.7
million related to the impairment of mineral property, plant
and equipment at Santo Domingo,
Minto and Kutcho,
- A non-cash charge of $5.8 million
related to the impairment of available-for-sale securities,
- A commodity derivative gain of $24.0
million, comprising a realized gain of $15.9 million combined with an unrealized gain of
$8.1 million,
- An income tax recovery of $19.0
million.
- Adjusted EBITDA1 of $96.2
million or $0.25 per common
share after making adjustments for certain non-cash and other
items.
- Operating cash flow before changes in working
capital1 of $60.0 million
or $0.16 per common share.
- Working capital increased to $162.4
million at December 31, 2015
(which included $101.6 million of
cash and cash equivalents) from $106.5
million at December 31,
2014.
- Production of 89,341 tonnes of payable copper at a C1 cash
cost1 of $1.99 per pound
of payable copper produced.
- Revenue of $420.5 million
generated primarily from the sale of 87,521 tonnes of copper.
Operational Highlights for the Quarter and Year Ended
December 31, 2015
Pinto Valley Mine:
- Produced 16,358 tonnes of copper during Q4 2015 at a C1 cash
cost (1) of $1.76 per
pound of payable copper produced.
- Produced 60,412 tonnes of copper during 2015 at a C1 cash cost
(1) of $1.97 per pound of
payable copper produced.
- Mill reliability significantly improved, with Q4 2015 setting
daily, monthly and quarterly throughput records under Capstone
ownership of 60,500, 54,800 and 54,100 tonnes per day ("tpd"),
respectively.
- Released the PV3 PFS in January
2016, which extended the mine life by 13 years to 2039 and
increases throughput by 8% without any major capital investment.
Annual production will average 55,700 tonnes of copper from 473.8
million tonnes of proven and probable reserves grading 0.31%
copper.
Cozamin Mine:
- Produced 4,883 tonnes of copper during Q4 2015 at a C1 cash
cost (1) of $1.30 per
pound of payable copper produced.
- Produced 15,650 tonnes of copper during 2015 at a C1 cash cost
(1) of $1.47 per pound of
payable copper produced.
- Changes in mining practices and the need to adapt practices to
increase ore production from the footwall zone resulted in a
shortfall in production in the first half of the year and slower
than expected mine development during H1 2015. Activities related
to dilution control produced significant improvements in the latter
half of the year and while the mine is continuing to work toward
increasing developed stopes, it has largely overcome the issues
that led to the production shortfall experienced early in the
year.
Minto Mine:
- Produced 4,450 tonnes of copper during Q4 2015 at a C1 cash
cost (1) of $2.58 per
pound of payable copper produced, which included $0.29 per pound of cost allocated from stockpile
that was spent in prior periods, bringing the actual cash expended
during Q4 2015 to $2.29 per pound of
payable copper produced.
- Produced 16,515 tonnes of copper during 2015 at a C1 cash cost
(1) of $2.54 per pound of
payable copper produced, which included $0.24 per pound of cost allocated from stockpile
that was spent in prior periods, bringing the actual cash expended
during 2015 to $2.30 per pound of
payable copper produced.
- The mill processed ore from underground and stockpiles for much
of 2015, while awaiting receipt of a Water Use Licence Amendment.
The Yukon Water Board issued the Water Use Licence on August 5, 2015, which completed the final stage
of permitting for all of the mineral reserves identified in the
July 2012 Phase VI Pre-Feasibility
Study. Stripping of the Minto North pit began immediately, with
first ore reached as expected in December.
Operating Outlook
Capstone's 2016 production guidance
is 108,000 tonnes (±5%) of copper with C1 cash costs(1)
of $1.45 to $1.55 per pound of
payable copper produced net of by-product credits and selling
costs.
Capital Outlook
Capstone's 2016 capital expenditures
are expected to be $40.2 million for
sustaining capital, $2.3 million for
PV3 development work and $37.7
million for capitalized stripping at Pinto Valley and Minto.
An additional $8.4 million is
budgeted for both brownfield and greenfield exploration, however as
exploration activities are discretionary they will be aligned with
prevailing market conditions, financing capacity and corporate
priorities.
Conference Call and Webcast Details
Date:
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Wednesday, February
17, 2016
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Time:
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11:30 am Eastern Time
(8:30 am Pacific Time)
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Dial
in:
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North America:
1-888-390-0546, International: +416-764-8688
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Webcast:
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http://event.on24.com/r.htm?e=1094432&s=1&k=949A9A55D556086D2F443F4A7444D365
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Replay:
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North America:
1-888-390-0541, International: +416-764-8677
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Replay
Passcode:
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535944#
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The conference call replay will be available until Wednesday, March 2, 2016. The conference call
audio and transcript will be available on Capstone's website within
approximately 24 hours of the call at
http://capstonemining.com/investors/events-and-presentations/default.aspx.
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. Capstone's strategy is to
extend the lives of our current mines with mineral resource and
reserve expansions, maintain optionality on the Santo Domingo development project, prudently
progress the exploration portfolio and grow 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 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", "guidance", "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 "guidance", "may", "future", "expected" and
"projected". 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 mineral resources; possible variations in ore
reserves, grade or recovery rates; accidents; assumptions related
to geotechnical conditions of tailings facilities; dependence on
key personnel; labour pool constraints; labour disputes;
availability of infrastructure required for the development of
mining projects; delays or inability to obtain governmental and
regulatory approvals for mining operations or financing or in the
completion of development or construction activities; counterparty
risks associated with sales of our metals; increased operating and
capital costs; operating in foreign jurisdictions with risk of
changes to governmental regulation; impact of climatic conditions
on our Pinto Valley, Cozamin and Minto operations; compliance with
debt covenants; 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 Gregg Bush, P. Eng., Senior Vice President and
Chief Operating Officer. Technical Information related to mineral
exploration activities has been reviewed and approved by
Brad Mercer, P. Geol., Senior Vice
President, Exploration. Both are 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
Consolidated Management's Discussion and Analysis for the year
ended December 31, 2015 as filed on
SEDAR and as available on the Company's website.
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 US securities laws. Without limiting the
foregoing, this news release may refer to technical reports that
use the terms "indicated" and "inferred" resources. US investors
are cautioned that, while such terms are recognized and required by
Canadian securities laws, the SEC does not recognize them. Under US
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. US investors are cautioned not
to assume that all or any part of indicated resources will ever be
converted into reserves. US 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, US 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 US
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.
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SOURCE Capstone Mining Corp.