All amounts in US$ unless otherwise
indicated
Capstone Copper Corp. (“Capstone” or the “Company”) (TSX:
CS) (ASX: CSC) today reported financial results for the three
months and year ended December 31, 2024 (“Q4 2024”). Copper
production in Q4 2024 totaled 53,942 tonnes at C1 cash costs1 of
$2.56 per payable pound of copper produced. Link HERE for
Capstone’s Q4 2024 webcast presentation.
John MacKenzie, CEO of Capstone, commented: "We achieved
record copper production and EBITDA generation in 2024,
representing tangible delivery on our peer leading growth. During
the year we realized the first phase of the transformation of
Capstone Copper by ramping up Mantoverde and Mantos Blancos, while
improving our balance sheet strength and financial flexibility. As
we delivered near-term growth, we also advanced our future phases
of growth by releasing feasibility studies for Mantoverde Optimized
and the neighbouring Santo Domingo project. This year represents an
inflection point for Capstone, with our recently released 2025
guidance demonstrating increased cash flow generation highlighted
by continued copper production growth and decreasing unit costs. We
will be focused on operational execution across our portfolio and
further deleveraging of our balance sheet, while continuing to
advance our pipeline of organic opportunities. It is our intention
to commence construction of the highly attractive Mantoverde
Optimized project in the second half of 2025, once the permit has
been received."
Q4 2024 OPERATIONAL AND FINANCIAL HIGHLIGHTS
- Consolidated copper production for Q4 2024 was 53,942 tonnes
at C1 cash costs1 of $2.56/lb. Consolidated copper
production consisted of 22,029 tonnes at Mantoverde, 13,563 tonnes
at Mantos Blancos, 11,626 tonnes at Pinto Valley and 6,724 tonnes
at Cozamin. Total Q4 2024 copper sold of 50,014 payable tonnes was
approximately 2,300 tonnes below payable production. This was
directly impacted by seasonal swells at load ports in Chile.
Record consolidated copper production for the full year ended
December 31, 2024 was 184,460 tonnes at C1
cash costs1 of $2.77/lb.
- Net income attributable to shareholders of $45.9 million, or
$0.06 per share for Q4 2024 compared to net loss attributable
to shareholders of $12.3 million, or $(0.02) per share for Q4 2023,
primarily due to higher copper production and a higher realized
copper price of $4.04/lb compared to $3.74/lb. Net income
attributable to shareholders for the full year was $82.9 million or
$0.11 per share.
- Adjusted net income attributable to shareholders1 of
$29.6 million, or $0.04 per share for Q4 2024, compared to
adjusted net income attributable to shareholders1 of $10.8 million
in Q4 2023. Adjusted net income attributable to
shareholders1 for the full year was $71.5 million or $0.10
per share.
- Adjusted EBITDA1 nearly doubled to $171.9 million for
Q4 2024 compared to $88.3 million for Q4 2023. The increase in
Adjusted EBITDA1 is primarily driven by higher copper production
and realized copper price and was impacted by the seasonal swells
at load ports in Chile. Adjusted EBITDA1 for the full year was
$496.1 million.
- Operating cash flow before changes in working capital of
$132.8 million in Q4 2024 compared to $80.4 million in Q4 2023.
Operating cash flow before changes in working capital for the
full year was $414.8 million.
- Net debt1 of $742.0 million as at December 31, 2024 was
slightly lower compared to net debt of $750.7 million as at
September 30, 2024 and significantly decreased compared to $927.2
million as at December 31, 2023, with the MVDP capital build
complete. Total available liquidity1 of $506.4 million as
at December 31, 2024, comprising of $132.4 million of cash and
short-term investments, and $374.0 million of undrawn amounts on
the corporate revolving credit facility.
- During Q4 2024, the Company announced the results of a
Feasibility Study for its Mantoverde Optimized brownfield
expansion project. Mantoverde Optimized is a capital efficient
expansion of the existing sulphide concentrator from throughput of
32,000 to 45,000 ore tpd. The study increased sulphide reserves
from 236 million tonnes at 0.60% copper to 398 million tonnes at
0.49% copper and 0.10 g/t gold, which extended the mine life from
19 to 25 years. MV Optimized is a high return and low risk
expansion project that is expected to bring on an additional 20,000
tonnes of copper per annum for approximately $146 million of
expansionary capital.
- During Q4 2024, the Company announced its leadership
succession plan. At the next Annual General Meeting on May 2,
2025, John MacKenzie will transition from CEO and be nominated to
the role of Non-Executive Chair of the Board, with Cashel Meagher
succeeding him as CEO and also to be nominated as a member of the
Board, while James Whittaker will become COO. Founder of Capstone
Mining Corp. and current Chair of Capstone Copper, Darren Pylot,
will step down from the Board after more than 20 years of combined
service to the Company.
- Expected 2025 consolidated copper production growth of
approximately 30% mostly driven by a full-year of production
from Mantoverde sulphides, resulting in 2025 production guidance of
220,000 to 255,000 tonnes of copper at approximately 15% lower C1
cash costs1 of $2.20 to $2.50 per payable pound of copper.
- In January 2025, Mantoverde sulphides produced a record
6,600 tonnes of copper driven by mill throughput of 33,409 tpd,
copper grades of 0.79%, and copper recoveries of 81.0%, marking the
first month with average throughput exceeding the plant's nameplate
capacity. In addition, Mantos Blancos sulphides produced 4,226
tonnes of copper in January 2025, driven by mill throughput of
20,628 tpd, copper grades of 0.83%, and copper recoveries of 80.1%,
highlighting a third consecutive month operating above its
nameplate capacity.
1 These are Non-GAAP performance measures.
Refer to the section titled “Non-GAAP and Other Performance
Measures”.
OPERATIONAL OVERVIEW
Refer to Capstone's Q4 2024 MD&A and Financial Statements
for detailed operating results.
Q4 2024
Q4 2023
2024
2023
Copper production (tonnes)
Sulphide business
Pinto Valley
11,626
15,890
57,272
55,090
Cozamin
6,724
6,540
24,907
24,340
Mantos Blancos
12,165
9,702
37,744
38,002
Mantoverde2
13,580
—
21,777
—
Total sulphides
44,095
32,132
141,700
117,432
Cathode business
Mantos Blancos
1,398
1,920
6,830
11,520
Mantoverde2
8,449
10,001
35,930
35,401
Total cathodes
9,847
11,921
42,760
46,921
Consolidated
53,942
44,053
184,460
164,353
Copper sales
Copper sold (tonnes)
50,014
43,283
175,201
160,194
Realized copper price1 ($/pound)
4.04
3.74
4.16
3.84
C1 cash costs1 ($/pound)
produced
Sulphides business
Pinto Valley
3.30
2.36
2.77
2.79
Cozamin
1.55
1.76
1.75
1.74
Mantos Blancos
2.30
2.58
2.95
2.74
Mantoverde
1.83
—
2.09
—
Total sulphides
2.31
2.30
2.53
2.56
Cathode business
Mantos Blancos
3.70
3.32
3.41
3.11
Mantoverde
3.62
3.68
3.53
3.83
Total cathodes
3.63
3.62
3.51
3.66
Consolidated
2.56
2.67
2.77
2.88
2 Mantoverde production shown on a 100%
basis.
Consolidated Production
Q4 2024 copper production of 53,942 tonnes was 22% higher than
Q4 2023 primarily as a result of sulphide production ramping up at
Mantoverde and Mantos Blancos.
Q4 2024 C1 cash costs1 of $2.56/lb were 4% lower than $2.67/lb
Q4 2023 mainly due to higher production (-$0.24/lb), partially
offset by lower capitalized stripping costs ($0.15/lb).
2024 consolidated production of 184,460 tonnes of copper was 12%
higher than 164,353 tonnes in 2023, mainly due to the start of
concentrate production at Mantoverde, partially offset by lower
cathode production at Mantos Blancos. Cozamin and Pinto Valley
production was consistent with the prior year.
2024 C1 cash costs1 of $2.77/lb were 4% lower than $2.88/lb 2023
due to higher copper production (-$0.20/lb), partially offset by
lower capitalized stripping costs ($0.09/lb).
Pinto Valley Mine
Copper production of 11.6 thousand tonnes in Q4 2024 was 27%
lower than in Q4 2023 due to ore face position resulting in lower
grades (Q4 2024 – 0.30% versus Q4 2023 - 0.36%) and lower mill
throughput during the quarter (Q4 2024 - 45,148 tpd versus Q4 2023
- 53,134 tpd). Mill throughput in Q4 2024 was impacted by unplanned
downtime as a result of mechanical failures and electrical issues,
and unscheduled maintenance on one of the six ball mills which led
to the concentrator operating at a reduced rate for a period of 18
days.
2024 production was 4% higher than 2023 due to slightly higher
mill throughput (49,461 tpd 2024 versus 49,273 tpd 2023), higher
feed grade tied to mine plan sequence (0.34% in 2024 versus 0.33%
in 2023) and slightly higher recoveries (87.4% 2024 versus 87.2%
2023).
C1 cash costs1 of $3.30/lb in Q4 2024 were 40% higher than Q4
2023 of $2.36/lb primarily due to lower production volume
($1.13/lb) and with minimal impact from operating costs ($0.05/lb),
partially offset by lower treatment costs (-$0.24/lb).
2024 C1 cash costs1 of $2.77/lb were 1% lower compared to the
same period last year of $2.79/lb primarily due to higher
production volume (-$0.11/lb) and increased deferred stripping
(-$0.18/lb), partially offset by increased operating costs
($0.17/lb) due to spend on equipment maintenance and contractors
and higher electricity rates ($0.091/kWh in 2024 versus $0.079/kWh
in 2023), and lower by-product credits ($0.09/lb).
Mantos Blancos Mine
Q4 2024 production was 13.6 thousand tonnes, composed of 12.2
thousand tonnes from sulphide operations and 1.4 thousand tonnes of
cathode from oxide operations, which was 17% higher than the 11.6
thousand tonnes produced in Q4 2023. Sulphide production increased
in Q4 2024 driven by the successful ramp-up of the concentrator
after the installation of new equipment in the tailings handling
area during Q3 2024. Overall in Q4 2024, Mantos Blancos averaged
sulphide plant throughput of approximately 19,579 tpd, including an
average of 20,137 tpd through November and December (compared to
16,027 tpd overall in 2024 and 14,635 tpd in 2023). Lower cathode
production was impacted by lower planned dump throughput and grade
in line with the 2024 mine plan.
2024 production of 44.6 thousand tonnes, composed of 37.7
thousand tonnes of copper in concentrate and 6.8 thousand tonnes of
cathodes, was 10% lower than 2023, mainly explained by 43% lower
cathode production due to lower dump throughput and grade in line
with the 2024 plan, and to a lesser extent by lower sulphides feed
grades as a result of mine sequence (0.81% in 2024 versus 0.91% in
2023).
Combined Q4 2024 C1 cash costs1 of $2.45/lb ($2.30/lb sulphides
and $3.70/lb cathodes) were 10% lower compared to combined C1 cash
costs1 of $2.71/lb in Q4 2023, mainly due to higher copper
concentrate production (-$0.39/lb) and lower diesel prices
(-$0.06/lb), partially offset by higher mine expense as a result of
mine sequence ($0.18/lb).
Combined 2024 C1 cash costs1 of $3.02/lb ($2.95/lb sulphides and
$3.41/lb cathodes) were 7% higher compared to $2.83/lb in 2023
mainly due to lower production in line with plan ($0.32/lb)
partially offset by lower acid and energy consumption
(-$0.10/lb).
Mantoverde Mine
Q4 2024 copper production of 22.0 thousand tonnes, composed of
13.6 thousand tonnes of copper from sulphide operations and 8.4
thousand tonnes of cathode, was 120% higher compared to 10.0
thousand tonnes in Q4 2023 driven by the ramp-up of MVDP. Heap
production decreased in Q4 2024 driven by lower grades (0.31% in Q3
2024 versus 0.41% in Q4 2023) as expected by the mining sequence
and lower throughput (2,512kt in Q4 2024 versus 2,831kt in Q4
2023), which was partially offset by higher recoveries (79.7% in Q4
2024 versus 64.6% in Q4 2023).
Mantoverde sulphides posted record quarterly copper production
of 13,580 tonnes from the new sulphide concentrator in Q4 2024.
During the quarter, plant throughput averaged 24,848 tpd, copper
grades averaged 0.80%, and physical copper recoveries averaged
74.4%. Plant throughput was impacted by a combination of planned
and unplanned downtime, with the planned downtime used to improve
recoveries, and the unplanned downtime mostly driven by typical
ramp-up issues. Plant availability and recoveries have steadily
increased since first copper production in June, and in December,
plant throughput averaged 27,105 tpd, copper grades averaged 0.73%,
and physical copper recoveries averaged 84.8%.
2024 production of 57.7 thousand tonnes was 63% higher than 2023
mainly due to copper in concentrate production of 21.8 thousand
tonnes and higher cathode production by 0.5 thousand tonnes mainly
driven by higher heap recovery and grade as a result of mine
sequence (0.35% in 2024 versus 0.34% in 2023).
Q4 2024 C1 cash costs1 were $2.53/lb, 31% lower than $3.68/lb in
Q4 2023 due to higher production of low-cost sulphides (-$1.19/lb),
lower energy prices (-$0.16/lb) which averaged $0.09/kWh in Q4 2024
versus $0.17/kWh in Q4 2023, and lower acid consumption related to
lower throughput (-$0.12/lb), partially offset by an increase in
contracted services, spare parts and labour cost mainly driven by
higher mine movement ($0.34/lb).
2024 C1 cash costs1 were $3.00/lb, 22% lower than $3.83/lb in
2023, mainly related to higher production (-$0.91/lb), lower energy
price due to contract conditions effective January 2024
(-$0.26/lb), lower acid prices and consumption related to lower
throughput (-$0.14/lb), which was partially offset by an increase
in contracted services, spare parts and labour cost mainly driven
by higher mine movement ($0.49/lb).
Cozamin Mine
Q4 2024 copper production of 6.7 thousand tonnes was 2% higher
than in the prior year, mainly on higher grades (2.03% in Q4 2024
versus 1.95% in Q4 2023) driven by mine sequence. Mill throughput
and recoveries were consistent quarter over quarter.
2024 production was 2% higher than 2023 due to higher grades
(1.96% in 2024 versus 1.89% in 2023), consistent with the mine
plan, which was partially offset by slightly lower mill throughput
(3,581 tpd in 2024 versus 3,639 tpd in 2023). Recoveries were
consistent with the same period previous year.
Q4 2024 C1 cash costs1 were $1.55/lb, 12% lower than in the same
period previous year, mainly due to higher production, higher
silver by-product volume and price (-$0.12/lb), as well as lower
operating costs than the previous year (-$0.07/lb) impacted by a
weakening of the Mexican peso relative to the US dollar.
2024 C1 cash costs1 were consistent with the previous year:
higher costs in manpower for hourly employees bonus profit sharing
increase and the change in mining method which resulted in an
increase in higher contractor utilization, which were offset by
more pounds payable produced and higher by-product silver prices
and volume.
Mantoverde Development Project
The Mantoverde Development Project ("MVDP") involved the
addition of a sulphide concentrator (nominal 32,000 ore tonnes per
day ("tpd")) and tailings storage facility, and the expansion of
the existing desalination plant and other minor infrastructure, in
order to process sulphide ore. Mantoverde continues to process
oxide ore through heap and dump run of mine leaching and a
conventional solvent extraction and electrowinning ("SX-EW") plant.
The final total project capital spent was $870 million which was in
line with the revised budget of $870 million and compared to the
initial Capstone Copper estimate of $825 million.
After producing first copper concentrate in June 2024, the MVDP
achieved commercial production on September 21, 2024, and the mill
ramped up to full nominal milling rates by year end, including a
peak individual daily throughput of 37,989 tpd in 2024.
Mantoverde sulphides posted quarterly copper production of
13,580 tonnes from the new sulphide concentrator in Q4 2024. During
the quarter, plant throughput averaged 24,848 tpd, copper grades
averaged 0.80%, and copper recoveries averaged 74.4%. Plant
throughput was impacted by a combination of planned and unplanned
downtime, with the planned downtime used to improve recoveries, and
the unplanned downtime mostly driven by typical ramp-up issues.
Examples of the issues faced in the quarter included a drive shaft
assembly failure in the stockpile apron feeder - which forced
operations to continue with only one feeder - and a frozen charge
event in the ball mill due to a variable frequency drive failure.
Plant availability and recoveries have steadily increased since
first copper production in June, and in December, plant throughput
averaged 27,105 tpd (November: 26,278 tpd, October: 21,206 tpd),
copper grades averaged 0.73% (November: 0.85%, October 0.83%), and
copper recoveries averaged 84.8% (November 70.9%, October
67.0%).
Subsequent to quarter end in January 2025, Mantoverde sulphides
posted record monthly copper production of 6,600 tonnes, driven by
plant throughput of 33,409 tpd, copper grades of 0.79%, and copper
recoveries of 81.0%. Peak individual daily throughput totaled
38,511 tpd in January.
MV Optimized Feasibility Study
The Company announced its Mantoverde Optimized ("MV Optimized")
Feasibility Study ("FS") on October 1, 2024. The project is a
capital-efficient expansion of Mantoverde's sulphide concentrator,
increasing throughput from 32,000 to 45,000 ore tpd and extending
the mine life from 19 to 25 years. With an updated sulphide Mineral
Reserve of 398 million tonnes at a copper grade of 0.49% (compared
to 236 million tonnes at 0.60% copper previously), the project will
yield an additional 368,000 tonnes of copper and 215,000 ounces of
gold, with an initial expansionary capital investment of $146
million and an implied capital intensity of approximately $7,500
per copper tonne. Capstone Copper anticipates starting construction
after receiving the DIA environmental permit approval, which is
expected around the middle of 2025. The MV Optimized FS also
features a robust life of mine after-tax NPV (8%) of $2.9 billion
for Mantoverde operation on a 100%-basis based on a long-term
copper price of $4.10/lb and gold price of $1,800/oz.
Santo Domingo Feasibility Study & Sierra Norte
Acquisition
Capstone Copper announced the results of an updated FS for its
100%-owned Santo Domingo copper-iron-gold project in Region III
Chile, 35km northeast of Mantoverde on July 31, 2024. The updated
FS, completed by Ausenco, outlines the next phase of
transformational growth for the Company in the world-class
Mantoverde-Santo Domingo ("MV-SD") district.
The 2024 FS for Santo Domingo outlines a robust copper-iron-gold
project with an after-tax NPV (8%) of $1.7 billion and an after-tax
internal rate of return of 24.1%. Total initial capital cost of
$2.3 billion drives a capital intensity of approximately $21,900
per tonne of annual copper equivalent production over the life of
mine. Over the first seven years of the mine plan, production is
expected to average 106,000 tonnes of copper and 3.7 million tonnes
of iron ore magnetite concentrate at first quartile cash costs of
$0.28 per payable pound of copper produced.
The 19-year Santo Domingo mine life is supported by an increased
Mineral Reserve estimate of 436 million tonnes (compared to 392
million tonnes previously) at a copper grade of 0.33%, iron ore
grade of 26.5%, and a gold grade of 0.05 grams per tonne. Increased
Measured & Indicated ("M&I") Mineral Resources total 547
million tonnes (compared to 537 million tonnes previously) at a
copper grade of 0.31% and a gold grade of 0.04 grams per tonne,
including 506 million tonnes with an iron grade of 25.8%.
The FS updated the level of engineering to Association for the
Advancement of Cost Engineering ("AACE") Class 3. Further detailed
engineering will increase the precision of capital estimates to
AACE Class 2 over the balance of 2025.
In Q3 2024, Capstone Copper acquired 100% of the shares of
Sierra Norte for $40 million in share consideration. Sierra Norte
is located approximately 15 kilometers northwest of the Santo
Domingo Project and represents an opportunity to potentially be a
future sulphide feed source for Santo Domingo, extending the higher
grade copper sulphide life. Potential oxide material at Sierra
Norte represents an opportunity to be a future oxide feed for
Mantoverde's underutilized SX-EW plant.
The Company is progressing partnership and financing discussions
for the Santo Domingo project, while in parallel advancing
opportunities to incorporate the recently acquired Sierra Norte
project and Santo Domingo’s copper oxide material into the mine
plan.
Copper Oxides Opportunity
Capstone Copper plans to progress drilling and studies regarding
the processing of oxide material from the Company’s Santo Domingo
and Sierra Norte deposits by leveraging Mantoverde’s infrastructure
and excess SX-EW capacity. To date, oxide materials have been
recognized in the shallower portions of the Santo Domingo, Iris
Norte, and Estrellita sulphide ore bodies. Some of these oxide
resources are considered as waste material in the Santo Domingo
2024 FS. Meanwhile, only slightly more than half of the processing
capacity is being used at Mantoverde’s SX-EW cathode copper plant.
Exploration efforts at Santo Domingo will target a potential 80-100
million tonnes of oxide material, which could add up to 10 thousand
tonnes per annum of copper production.
Exploration Opportunities in the MV-SD
District
Capstone Copper has significant untapped exploration potential
within MV-SD district. The Mantoverde Optimized plan was prepared
without completing any expansionary drilling since 2019. At
Mantoverde, there are 0.2 billion tonnes of M&I and 0.6 billion
tonnes of Inferred sulphide resources not in reserves. Exploration
targets also include the northern extension (~10km long) of the
projection of the prospective Atacama fault system. At Santo
Domingo, there are 0.1 billion tonnes of M&I and 0.2 billion
tonnes of Inferred sulphide resources not in reserves. The recently
acquired Sierra Norte property also represents an opportunity to
potentially be a future feed source in the district. Capstone
Copper intends to progress its exploration strategy to service its
two eventual processing centers between Mantoverde and Santo
Domingo, in addition to drilling that is currently underway at
Mantoverde to evaluate the potential for Mantoverde Phase II, which
could include the addition of an entire second processing line at
Mantoverde.
Mantoverde - Santo Domingo Pyrite Augmentation & Cobalt
Study
A district cobalt plant for the MV-SD district is designed to
unlock cobalt production while reducing sulphuric acid consumption
and increasing heap leach copper production. The cobalt recovery
process comprises a pyrite flotation step to recover cobaltiferous
pyrite from the tailings streams at Mantoverde and Santo Domingo
and redirect it to the dynamic heap leach pads, which will be
upgraded to a bioleach configuration through the addition of an
aeration system as part of MV Optimized. The pyrite oxidizes in the
leach pads and the solubilized cobalt is recovered via an ion
exchange plant treating a bleed stream from the copper solvent
extraction plant. The approach has been successfully demonstrated
at the bench and pilot scales.
As currently envisioned, a smaller capacity countercurrent
ion-exchange plant will initially treat cobalt by-product streams
from Mantoverde producing up to 1,500 tonnes per annum of cobalt,
and following sanctioning of the Santo Domingo project, the
facility will be expanded to accommodate by-product streams from
Santo Domingo. An initial study focused on Mantoverde's pyrite
augmentation and cobalt opportunity is expected in 2025, followed
by a Santo Domingo study in 2026, for a combined MV-SD target of
4,500 to 6,000 tonnes per annum of mined cobalt production.
Mantos Blancos Phase II Study
The Company is currently evaluating the next phase of growth for
Mantos Blancos, which is analyzing the potential to increase the
concentrator plant's throughput to at least 27,000 tpd and increase
cathode production from the underutilized SX-EW plant. The sulphide
concentrator plant expansion is expected to utilize existing and
unused or underutilized process equipment, such as two idled ball
mills, plus additional equipment for concentrate filtration,
thickening and filtering of tailings. The increase in cathode
production is being evaluated based on an opportunity to re-leach
spent ore from historical VAT leaching operations and coarse/fine
tailings material. The increase in cathode production would utilize
existing SX-EW plant capacity, with the addition of a dynamic leach
pad, agglomeration and stacking infrastructure. The Mantos Blancos
Phase II study is expected around the end of 2025.
PV District Growth Study
The Company continues to review and evaluate the consolidation
potential of the Pinto Valley district. Opportunities under
evaluation include a potential mill expansion and increased
leaching capacity supported by optimized water, heap and dump
leach, and tailings infrastructure. Pinto Valley district
consolidation could unlock significant ESG opportunities and may
transform the Company's approach to create value for all
stakeholders in the Globe-Miami District.
Leadership Succession Plan
As previously announced the following leadership changes will
take effect at the next Annual General Meeting of the Company on
May 2, 2025:
- John MacKenzie will transition from Chief Executive Officer and
will be nominated to the role of Non-Executive Chair of the
Capstone Copper Board of Directors;
- Cashel Meagher, current President and Chief Operating Officer,
will succeed Mr. MacKenzie as CEO of Capstone Copper, and will also
be nominated as a member of the Board;
- James Whittaker, current Senior Vice President, Head of Chile,
will succeed Mr. Meagher as COO. This facilitates a flattening of
the organizational structure with all mine general managers
reporting directly to the COO;
- Darren M. Pylot, founder of Capstone Mining Corp. ("Capstone
Mining") and current Chair of the Board, will end his term on the
Board after over 20 years with Capstone Mining as a founder and
CEO, and subsequently as Chair of the Board of Capstone
Copper.
On January 13, 2025, Capstone Copper announced the appointment
of Rick Coleman to the Board of Directors effective January 15,
2025.
Corporate Exploration Update
Cozamin: Exploration drilling continued in Q4 2024 at
Cozamin targeting step-outs up-dip and down-dip from the Mala Noche
West Target and also down-dip of other historical Mala Noche Vein
workings. Drilling was conducted with one underground rig
positioned at the level 19.1 cross-cut, a second underground rig
positioned at the level 12.7 cross-cut, and one surface rig.
Copper Cities, Arizona: On January 20, 2022, Capstone
Mining announced that it had entered into an access agreement with
BHP Copper Inc. ("BHP") to conduct drill and metallurgical
test-work at BHP's Copper Cities project ("Copper Cities"), located
approximately 10 km east of the Pinto Valley mine. This access
agreement was recently extended to July 2025. Drilling with two
surface rigs twinning historical drill holes was completed in 2022
with metallurgical testing continuing in 2024. District
consolidation opportunities are being evaluated.
Mantoverde, Santo Domingo, Sierra Norte and Mantos Blancos,
Chile: Mantoverde's exploration drill program commenced in Q4
2024. The program will first target the areas closer to MV
Optimized pit focusing on improving copper grades and
mineralization continuity within and nearby the pit boundaries. The
program will also test areas to the north of the pit to potentially
increase the mineral resource. An Induced Polarization (IP)
geophysical survey began in Q4 at Mantoverde with the focus to
cover the northern extension (~10km long) of the projection of the
prospective Atacama fault system. At Sierra Norte work commenced
with a revision and validation of the historic drilling database
and geological model. Infill drilling continues during Q4 2024 at
Mantos Blancos in Phases 15 and 16 and exploration drilling
progressed testing the Nora-Quinta target. A high-resolution
magnetic survey was also completed at Mantos Blancos during Q4
2024.
2025 Guidance
Production, cash cost, capital expenditures and exploration
investment guidance for 2025 remains unchanged from the most
recently released guidance as outlined in the news release
"Capstone Copper Announces 2024 Production Results and Provides
2025 Guidance" dated January 20, 2025.
2025 forecasted production volumes of 220,000 to 255,000 tonnes
of copper are expected to increase by approximately 19% to 38%,
while 2025 forecasted C1 cash costs of $2.20 to $2.50 per payable
pound of copper are expected to decrease by approximately 10% to
20%, compared to 2024.
In 2025, the Company plans to spend a total of $315 million in
sustaining and expansionary capital expenditures at its operating
mines and the Santo Domingo Project. This is broken down into $255
million on sustaining capital and $60 million on expansionary
capital. In addition, the Company plans to spend a total of $210
million in capitalized stripping at its three open pit mines.
The Company plans to spend $25 million in brownfield and
greenfield exploration activities in 2025. The brownfield
exploration is focused on resource conversion at Pinto Valley,
Mantoverde, Mantos Blancos, Cozamin and Santo Domingo. The
greenfield exploration relates to expansionary work in the highly
prospective northern area of the Mantoverde land package and at
Sierra Norte.
FINANCIAL OVERVIEW
Please refer to Capstone's Q4 2024 MD&A and Financial
Statements for detailed financial results.
($ millions, except per share data)
Q4 2024
Q4 2023
2024
2023
Revenue
446.9
353.7
1,599.2
1,345.5
Net income (loss)
47.2
(19.5)
85.9
(124.7)
Net income (loss) attributable to
shareholders
45.9
(12.3)
82.9
(101.7)
Net income (loss) attributable to
shareholders per common share - basic and diluted ($)
0.06
(0.02)
0.11
(0.15)
Adjusted net income1
29.6
10.8
71.5
0.3
Adjusted net income attributable to
shareholders per common share - basic and diluted
0.04
0.02
0.10
—
Operating cash flow before changes in
working capital
132.8
80.4
414.8
204.8
Adjusted EBITDA1
171.9
88.3
496.1
260.3
Realized copper price1
($/pound)
4.04
3.74
4.16
3.84
($ millions)
December 31, 2024
December 31, 2023
Net debt1
(742.0)
(927.2)
Attributable net (debt)/cash1
(600.6)
(776.6)
CONFERENCE CALL AND WEBCAST DETAILS
Capstone will host a conference call and webcast on Wednesday,
February 19, at 5:00 pm Eastern Time / 2:00 pm Pacific Time
(Thursday, February 20, 2025, 9:00 am Australian Eastern Daylight
Time). Link to the audio webcast:
https://app.webinar.net/pWrNOolZnQV
Dial-in numbers for the audio-only portion of the conference
call are below. Due to an increase in call volume, please dial-in
at least five minutes prior to the call to ensure placement into
the conference line on time.
Toronto: 1-437-900-0527 Australia: 61-280-171-385 North America
toll free: 1-888-510-2154
A replay of the conference call will be available until February
26, 2025. Dial-in numbers for Toronto: 1-289-819-1450 and North
American toll free: 1-888-660-6345. The replay code is 65051#.
Following the replay, an audio file will be available on Capstone’s
website at
https://capstonecopper.com/investors/events-and-presentations/.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
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 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 the Company's expectations or beliefs
regarding future events. The Company's Sustainable Development
Strategy goals and strategies are based on a number of assumptions,
including, but not limited to, the reliability of data sources; the
biodiversity and climate-change consequences; availability and
effectiveness of technologies needed to achieve the Company's
sustainability goals and priorities; availability of land or other
opportunities for conservation, rehabilitation or capacity building
on commercially reasonable terms and the Company's ability to
obtain any required external approvals or consensus for such
opportunities; the availability of clean energy sources and
zero-emissions alternatives for transportation on reasonable terms;
availability of resources to achieve the goals in a timely manner,
the Company's ability to successfully implement new technology; and
the performance of new technologies in accordance with the
Company's expectations.
Forward-looking statements include, but are not limited to,
statements with respect to the estimation of Mineral Resources and
Mineral Reserves, the success of the underground paste backfill and
tailings filtration projects at Cozamin, the results of the
Optimized Mantoverde Development Project ("MV Optimized FS") and
Mantoverde Phase II study, the timing and results of PV District
Growth Study (as defined below), the timing and results of Mantos
Blancos Phase II Feasibility Study, the timing and success of the
Mantoverde - Santo Domingo Cobalt Feasibility Study, the results of
the Santo Domingo FS Update and success of incorporating synergies
previously identified in the Mantoverde - Santo Domingo District
Integration Plan, the timing and results of exploration and
potential opportunities at Sierra Norte, the realization of Mineral
Reserve estimates, the timing and amount of estimated future
production, the costs of production and capital expenditures and
reclamation, the timing and costs of the Minto obligations and
other obligations related to the closure of the Minto Mine, the
budgets for exploration at Cozamin, Santo Domingo, Pinto Valley,
Mantos Blancos, Mantoverde, and other exploration projects, the
timing and success of the Copper Cities project, the success of the
Company's mining operations, the continuing success of mineral
exploration, the estimations for potential quantities and grade of
inferred resources and exploration targets, the Company's ability
to fund future exploration activities, the Company's ability to
finance the Santo Domingo development project, environmental and
geotechnical risks, unanticipated reclamation expenses and title
disputes, the success of the synergies and catalysts related to
prior transactions, in particular but not limited to, the potential
synergies with Mantoverde and Santo Domingo, the anticipated future
production, costs of production, including the cost of sulphuric
acid and oil and other fuel, capital expenditures and reclamation
of Company’s operations and development projects, the Company's
estimates of available liquidity, and the risks included in the
Company's continuous disclosure filings on SEDAR+ at
www.sedarplus.ca. The impact of global events such as pandemics,
geopolitical conflict, or other events, to Capstone is dependent on
a number of factors outside of the Company's control and knowledge,
including the effectiveness of the measures taken by public health
and governmental authorities to combat the spread of diseases,
global economic uncertainties and outlook due to widespread
diseases or geopolitical events or conflicts, supply chain delays
resulting in lack of availability of supplies, goods and equipment,
and evolving restrictions relating to mining activities and to
travel in certain jurisdictions in which we operate. In certain
cases, forward-looking statements can be identified by the use of
words such as “anticipates”, “approximately”, “believes”, “budget”,
“estimates”, “expects”, “forecasts”, “guidance”, “intends”,
“plans”, “scheduled”, “target”, or variations of such words and
phrases, or statements that certain actions, events or results “be
achieved”, “could”, “may”, “might”, “occur”, “should”, “will be
taken” or “would” or the negative of these terms or comparable
terminology.
In certain cases, forward-looking statements can be identified
by the use of words such as “anticipates”, “approximately”,
“believes”, “budget”, “estimates”, expects”, “forecasts”,
“guidance”, intends”, “plans”, “scheduled”, “target”, or variations
of such words and phrases, or statements that certain actions,
events or results “be achieved”, “could”, “may”, “might”, “occur”,
“should”, “will be taken” or “would” or the negative of these terms
or comparable terminology. In this document certain forward-looking
statements are identified by words including “anticipated”,
“expected”, “guidance” and “plan”. By their very nature,
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the Company's 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 and closure of mining projects, future prices of
copper and other metals, compliance with financial covenants,
inflation, surety bonding, the Company's ability to raise capital,
Capstone Copper’s ability to acquire properties for growth,
counterparty risks associated with sales of the Company's metals,
use of financial derivative instruments and associated counterparty
risks, foreign currency exchange rate fluctuations, market access
restrictions or tariffs, changes in general economic conditions,
availability and quality of water, accuracy of Mineral Resource and
Mineral Reserve estimates, operating in foreign jurisdictions with
risk of changes to governmental regulation, compliance with
governmental regulations and stock exchange rules, compliance with
environmental laws and regulations, reliance on approvals, licences
and permits from governmental authorities and potential legal
challenges to permit applications, contractual risks including but
not limited to, the Company's ability to meet the requirements
under the Cozamin Silver Stream Agreement with Wheaton Precious
Metals Corp. ("Wheaton"), the Company's ability to meet certain
closing conditions under the Santo Domingo Gold Stream Agreement
with Wheaton, acting as Indemnitor for Minto Metals Corp.’s surety
bond obligations, impact of climate change and changes to climatic
conditions at the Company's operations and projects, changes in
regulatory requirements and policy related to climate change and
greenhouse gas ("GHG") emissions, land reclamation and mine closure
obligations, introduction or increase in carbon or other "green"
taxes, aboriginal title claims and rights to consultation and
accommodation, risks relating to widespread epidemics or pandemic
outbreaks; the impact of communicable disease outbreaks on the
Company's workforce, risks related to construction activities at
the Company's operations and development projects, suppliers and
other essential resources and what effect those impacts, if they
occur, would have on the Company's business, including the
Company's ability to access goods and supplies, the ability to
transport the Company's products and impacts on employee
productivity, the risks in connection with the operations, cash
flow and results of Capstone Copper relating to the unknown
duration and impact of the epidemics or pandemics, impacts of
inflation, geopolitical events and the effects of global supply
chain disruptions, uncertainties and risks related to the potential
development of the Santo Domingo development project, risks related
to the Mantoverde Development Project ("MVDP"), increased operating
and capital costs, increased cost of reclamation, challenges to
title to the Company's mineral properties, increased taxes in
jurisdictions the Company operates or is subject to tax, changes in
tax regimes we are subject to and any changes in law or
interpretation of law may be difficult to react to in an efficient
manner, maintaining ongoing social licence to operate, seismicity
and its effects on the Company's operations and communities in
which we operate, dependence on key management personnel, Toronto
Stock Exchange ("TSX") and Australian Securities Exchange ("ASX")
listing compliance requirements, potential conflicts of interest
involving the Company's directors and officers, corruption and
bribery, limitations inherent in the Company's insurance coverage,
labour relations, increasing input costs such as those related to
sulphuric acid, electricity, fuel and supplies, increasing
inflation rates, competition in the mining industry including but
not limited to competition for skilled labour, risks associated
with joint venture partners and non-controlling shareholders or
associates, the Company's ability to integrate new acquisitions and
new technology into the Company's operations, cybersecurity
threats, legal proceedings, the volatility of the price of the
common shares, the uncertainty of maintaining a liquid trading
market for the common shares, risks related to dilution to existing
shareholders if stock options or other convertible securities are
exercised, the history of Capstone Copper with respect to not
paying dividends and anticipation of not paying dividends in the
foreseeable future and sales of common shares by existing
shareholders can reduce trading prices, 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
MD&A of those statements and Annual Information Form, all of
which are filed and available for review under the Company’s
profile on SEDAR+ at www.sedarplus.ca. Although the Company has
attempted to identify important factors that could cause the
Company's actual results, performance or achievements to differ
materially from those described in the Company's forward-looking
statements, there may be other factors that cause the Company's
results, performance or achievements not to be as anticipated,
estimated or intended. There can be no assurance that the Company's
forward-looking statements will prove to be accurate, as the
Company's actual results, performance or achievements could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on the Company's
forward-looking statements.
COMPLIANCE WITH NI 43-101
Unless otherwise indicated, Capstone Copper has prepared the
technical information in this document (“Technical Information”)
based on information contained in the technical reports, Annual
Information Form and news releases (collectively the “Disclosure
Documents”) available under Capstone Copper’s company profile on
SEDAR+ at www.sedarplus.ca. 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.
Disclosure Documents include the National Instrument 43-101
technical reports titled "Mantoverde Mine, NI 43-101 Technical
Report and Feasibility Study, Atacama Region, Chile" effective July
1, 2024, “Santo Domingo Project, NI 43-101 Technical Report and
Feasibility Study Update, Atacama Region, Chile” effective July 31,
2024, "NI 43-101 Technical Report on the Cozamin Mine, Zacatecas,
Mexico" effective January 1, 2023, "Mantos Blancos Mine NI 43-101
Technical Report Antofagasta / Región de Antofagasta, Chile"
effective November 29, 2021, and “NI 43-101 Technical Report on the
Pinto Valley Mine, Arizona, USA” effective March 31, 2021.
The disclosure of Scientific and Technical Information in this
document was reviewed and approved by Peter Amelunxen, P.Eng.,
Senior Vice President, Technical Services (technical information
related to project updates at Santo Domingo and Mineral Resources
and Mineral Reserves at Mantoverde), Clay Craig, P.Eng., Director,
Mining & Strategic Planning (technical information related to
Mineral Reserves at Pinto Valley and Cozamin), and Cashel Meagher,
P.Geo., President and Chief Operating Officer (technical
information related to Mineral Reserves and Resources at Mantos
Blancos) all Qualified Persons under NI 43-101.
Non-GAAP and Other Performance Measures
The Company uses certain performance measures in its analysis.
These Non-GAAP performance measures are included in this MD&A
because these statistics are key performance measures that
management uses to monitor performance, to assess how the Company
is performing, and to plan and assess the overall effectiveness and
efficiency of mining operations. These performance measures do not
have a standard meaning within IFRS Accounting Standards 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 Accounting Standards.
Some of these performance measures are presented in Highlights
and discussed further in other sections of the MD&A. These
measures provide meaningful supplemental information regarding
operating results because they exclude certain significant items
that are not considered indicative of future financial trends
either by nature or amount. As a result, these items are excluded
from management assessment of operational performance and
preparation of annual budgets. These significant items may include,
but are not limited to, restructuring and asset impairment charges,
individually significant gains and losses from sales of assets,
share-based compensation, unrealized gains or losses, and certain
items outside the control of management. These items may not be
non-recurring. However, excluding these items from GAAP or Non-GAAP
results allows for a consistent understanding of the Company's
consolidated financial performance when performing a multi-period
assessment including assessing the likelihood of future results.
Accordingly, these Non-GAAP financial measures may provide insight
to investors and other external users of the Company's consolidated
financial information.
C1 Cash Costs Per Payable Pound of Copper Produced C1
cash costs per payable pound of copper produced is a measure
reflective of operating costs per unit. C1 cash costs is calculated
as cash production costs of metal produced net of by-product
credits and is a key performance measure that management uses to
monitor performance. Management uses this measure to assess how
well the Company’s producing mines are performing and to assess the
overall efficiency and effectiveness of the mining operations and
assumes that realized by-product prices are consistent with those
prevailing during the reporting period.
All-in Sustaining Costs Per Payable Pound of Copper
Produced All-in sustaining costs per payable pound of copper
produced is an extension of the C1 cash costs measure discussed
above and is also a non-GAAP key performance measure that
management uses to monitor performance. Management uses this
measure to analyze margins achieved on existing assets while
sustaining and maintaining production at current levels.
Consolidated All-in sustaining costs includes sustaining capital
and corporate general and administrative costs.
Net debt / Net cash Net (debt) / Net cash is a non-GAAP
performance measure used by the Company to assess its financial
position and is composed of Long-term debt (excluding deferred
financing costs and purchase price accounting ("PPA") fair value
adjustments), Cost overrun facility from MMC, Cash and cash
equivalents, Short-term investments, and excluding shareholder
loans.
Attributable Net debt / Net cash Attributable net (debt)
/ net cash is a non-GAAP performance measure used by the Company to
assess its financial position and is calculated as net debt / net
cash excluding amounts attributable to non-controlling
interests.
Available Liquidity Available liquidity is a non-GAAP
performance measure used by the Company to assess its financial
position and is composed of RCF credit capacity, the $520 million
Mantoverde DP facility capacity, Cash and cash equivalents and
Short-term investments. For clarity, Available liquidity does not
include the Mantoverde $60 million cost overrun facility from MMC
nor the $260 million undrawn portion of the gold stream from
Wheaton related to the Santo Domingo development project as they
are not available for general purposes.
Adjusted net income attributable to shareholders Adjusted
net income attributable to shareholders is a non-GAAP measure of
Net income (loss) attributable to shareholders as reported,
adjusted for certain types of transactions that in the Company's
judgment are not indicative of normal operating activities or do
not necessarily occur on a regular basis.
EBITDA EBITDA is a non-GAAP measure of net income (loss)
before net finance expense, tax expense, and depletion and
amortization.
Adjusted EBITDA Adjusted EBITDA is non-GAAP measure of
EBITDA before the pre-tax effect of the adjustments made to net
income (loss) (above) as well as certain other adjustments required
under the RCF agreement in the determination of EBITDA for covenant
calculation purposes.
The adjustments made to Adjusted net income attributable to
shareholders and Adjusted EBITDA allow management and readers to
analyze the Company's results more clearly and understand the
cash-generating potential of the Company.
Sustaining Capital Sustaining capital is expenditures to
maintain existing operations and sustain production levels. A
reconciliation of this non-GAAP measure to GAAP segment MPPE
additions is included within the mine site sections of this
document.
Expansionary Capital Expansionary capital is expenditures
to increase current or future production capacity, cash flow or
earnings potential. A reconciliation of this non-GAAP measure to
GAAP segment MPPE additions is included within the mine site
sections of this document.
Realized copper price (per pound) Realized price per
pound is a non-GAAP ratio that is calculated using the non-GAAP
measures of revenue on new shipments, revenue on prior shipments,
and pricing and volume adjustments. Realized prices exclude the
stream cash effects as well as treatment and refining charges.
Management believes that measuring these prices enables investors
to better understand performance based on the realized copper sales
in the current and prior periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250219704087/en/
Daniel Sampieri, Vice President, Investor Relations 437-788-1767
dsampieri@capstonecopper.com
Michael Slifirski, Director, Investor Relations, APAC Region
(+61) 412-251-818 mslifirski@capstonecopper.com
Claire Stirling, Manager, Investor Relations 416-831-8908
cstirling@capstonecopper.com
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