(All amounts in US$ unless otherwise specified)
VANCOUVER, April 26, 2016 /CNW/ - Capstone
Mining Corp. ("Capstone") (TSX: CS) today announced its financial
results for the quarter ended March 31,
2016. Operating cash flow before changes in working capital
(1) was $18.9 million or
$0.05 per share, with a net loss of
$12.8 million and an adjusted net
loss of $1.5 million after adjusting
for certain non-cash and non-recurring charges. Copper production
for the quarter totalled 24,500 tonnes (23,700 tonnes of payable
copper) at a C1 cash cost (1) of $1.72 per payable pound produced with copper
sales for the quarter of 28,000 tonnes at a C1 cash cost
(1) of $1.77 per payable
pound sold.
Capstone will hold a conference call and webcast
on Wednesday, April
27, 2016 at 11:30 a.m. Eastern time (8:30 a.m. Pacific time) to discuss these results;
call-in details and information on associated slides are provided
at the end of this release. This release should be read in
conjunction with Capstone's consolidated financial statements and
management's discussion and analysis ("MD&A") for the quarter
ended March 31, 2016, which are
available on Capstone's website at
http://capstonemining.com/investors/financial-reporting/default.aspx
and on SEDAR. An updated corporate presentation, including results
to March 31, 2016, in addition to the
Q1 2016 webcast slides, will also be available at
http://capstonemining.com/investors/events-and-presentations/default.aspx.
Overview
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Q1
2016
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Q1
2015
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Revenue ($
millions)
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126.2
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102.9
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Copper
produced (tonnes)
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24,547
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23,677
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Payable copper
produced (tonnes)
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23,694
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22,853
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C1 cash cost per
payable pound produced (1) ($)
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1.72
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1.97
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All-in sustaining
cost per payable pound produced (1)
($/lb)
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2.21
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2.40
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All-in cost per
payable pound produced (1) ($/lb)
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2.23
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3.00
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Fully-loaded
all-in cost per payable pound produced (1)
($/lb)
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2.36
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3.09
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Copper sold
(tonnes)
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27,985
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20,082
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Realized copper
price per pound sold ($/lb)*
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2.19
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2.47
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Adjusted realized
copper price per pound sold ($/lb) **
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2.35
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2.47
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C1 cash cost per
payable pound sold (1) ($/lb)
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1.77
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1.89
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All-in sustaining
cost per payable pound sold (1) ($/lb)
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2.21
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2.36
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All-in cost per
payable pound sold (1) ($/lb)
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2.22
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3.05
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Fully-loaded
all-in cost per payable pound sold (1)
($/lb)
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2.33
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3.15
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Net loss ($
millions)
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(12.8)
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(17.4)
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Net loss per
common share ($)
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(0.03)
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(0.04)
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Adjusted net
(loss) income (1) ($ millions)
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(1.5)
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(8.9)
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Adjusted net
(loss) income per common share ($)
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(0.00)
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(0.02)
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Adjusted
EBITDA (1) ($ millions)
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39.3
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24.3
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Adjusted EBITDA
(1) per common share ($)
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0.10
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0.06
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Operating cash
flow before changes in working capital (1) ($
millions)
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18.9
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16.5
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Operating cash
flow before changes in working capital per common share
(1) ($)
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0.05
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0.04
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Cash and cash
equivalents ($ millions)
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121.1
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122.6
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Net debt
(1) ($ millions)
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228.2
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177.2
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* Q1 2016 includes a negative provisional pricing adjustment
of $5.6 million (2015 – negative
$12.7 million) related to prior
shipments, equivalent to $(0.09) per
pound (2015 – $(0.29) per pound) of
copper sold during the quarter. ** Adjusted realized copper price
includes the realized gain of $9.6
million related to the put contracts the Company exercised
in Q1 2016 (2015 – nil).
"In the first quarter of 2016 our operating cash flow was
$32.2 million. Our cash balance
increased $20 million to $121.1 million, reducing our net debt to
$228.2 million and our senior secured
leverage ratio to 2.1 at quarter end, down from 2.6 at the end of
2015," said Darren Pylot, President
and CEO of Capstone. "Our continued focus on mine site cost
efficiencies and optimization were demonstrated in the first
quarter with Pinto Valley posting the second straight quarter of
new daily, monthly and quarterly throughput records and exceeding
targeted throughput for the quarter."
"We took action in the quarter given recent commodity price
volatility to preserve our financial flexibility and protect our
covenant compliance for 2016," continued Mr. Pylot. "Through a
combination of price fixing and hedging we have ensured covenant
compliance at copper prices above approximately $1.65 per pound for the remainder of 2016, with
substantially lower costs expected as we reach the higher grade
portion of Minto North."
Financial Highlights for the Quarter Ended March 31, 2016
- Net loss of $12.8 million or
$0.03 per common share which
included:
- Earnings from mining operations of $2.1
million,
- Production costs included a $1.5
million non-cash charge related to the write-down of
inventory at Minto and Pinto Valley,
- A gain on commodity derivatives of $3.2
million, comprising $1.5
million on the January and February $2.60 copper puts and $1.7
million on new copper forward contracts,
- $2.9 million in current and
deferred tax expense.
- Working capital increased marginally to $163.4 million at March
31, 2016 from $162.4 million
at December 31, 2015. More impactful
was the increase of $19.5 million in
cash and cash equivalents (a component of working capital) to
$121.1 million, driven by proceeds of
$14.0 million on the $2.60 copper put contracts combined with the
reduction of finished goods inventory balances.
Production and Additional Highlights for the Quarter Ended
March 31, 2016
Pinto Valley Mine:
- Produced 16,365 tonnes of copper in concentrates and cathode
during Q1 2016 at a C1 cash cost (1) of $1.64 per pound of payable copper produced.
- During Q1 2016 the mine achieved daily, monthly and quarterly
throughput records of 62,400, 56,700 and 55,000 tonnes per day
("tpd"), respectively.
Cozamin Mine:
- Produced 3,660 tonnes of copper in concentrates during Q1 2016
at a C1 cash cost (1) of $1.50 per pound of payable copper produced.
Minto Mine:
- Produced 4,522 tonnes of copper in concentrates during Q1 2016
at a C1 cash cost (1) of $2.19 per pound of payable copper produced, which
included $0.05 per pound of cost
allocated from stockpile that was spent in prior periods, bringing
the actual cash expended during Q1 2016 to $2.14 per pound of payable copper produced.
Santo Domingo:
- On March 10, 2016 the Maritime
Concession for the port location was granted to Minera Santo Domingo.
Operating Outlook
Capstone's 2016 production guidance for 108,000 tonnes (±5%) of
copper with C1 cash cost (1) of $1.45 to $1.55 per pound, and Fully-Loaded All-In
Cost (1) of $2.05 to $2.15
per pound of payable copper produced, net of by-product credits and
selling costs, remains unchanged.
Conference Call and Webcast Details
Date:
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Wednesday, April 27,
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=1144309&s=1&k=B5BC94165864B3E62231036C08453949
North America: 1-888-390-0541, International:
+416-764-8677
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Replay:
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Replay
Passcode:
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982010#
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The conference call replay will be available until Wednesday, May 11, 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 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
Kutcho copper-zinc project in British
Columbia, Canada, as well as exploration properties in
Chile and US. Capstone's strategy
is to continue to extend the lives of our current mines with
mineral resource and reserve expansions, maintain the 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, to
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 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 our expectations or beliefs regarding
future events. Forward-looking statements include, but are not
limited to, statements with respect to the estimation of mineral
resources and mineral reserves, the realization of mineral reserve
estimates, the timing and amount of estimated future production,
costs of production and capital expenditures, the success of our
mining operations, environmental risks, unanticipated reclamation
expenses and title disputes. In certain cases, forward-looking
statements can be identified by the use of words such as "plans",
"expects", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", "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", "ensured" and "expected". By
their very nature, forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such
factors include, amongst others, risks related to inherent hazards
associated with mining operations, assumptions related to
geotechnical condition of tailings facilities, future prices of
copper and other metals, compliance with financial covenants,
surety bonding, our ability to raise capital, counterparty risks
associated with sales of our metals, use of financial derivative
instruments and associated counterparty risks, foreign currency
exchange rate fluctuations, changes in general economic conditions,
accuracy of mineral resource and mineral reserve estimates,
operating in foreign jurisdictions with risk of changes to
governmental regulation, compliance with governmental regulations,
compliance with environmental laws and regulations, reliance on
approvals, licences and permits from governmental authorities,
impact of climatic conditions on our Pinto Valley, Cozamin and
Minto operations, aboriginal title claims and rights to
consultation and accommodation, land reclamation and mine closure
obligations, uncertainties and risks related to the potential
development of the Santo Domingo Project, increased operating and
capital costs, challenges to title to our mineral properties,
dependence on key management personnel, potential conflicts of
interest involving our directors and officers, corruption and
bribery, limitations inherent in our insurance coverage, labour
relations, increasing energy prices, competition in the mining
industry, risks associated with joint venture partners, our ability
to integrate new acquisitions into our operations, cybersecurity
threats 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 our actual results, performance or achievements to
differ materially from those described in our forward-looking
statements, there may be other factors that cause our results,
performance or achievements not to be as anticipated, estimated or
intended. There can be no assurance that our forward-looking
statements will prove to be accurate, as our actual results,
performance or achievements could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on our 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 quarter ended March 31, 2016 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) This is an alternative performance measure; please see
"Alternative Performance Measures" at the end of this
release.
SOURCE Capstone Mining Corp.