Welcome!

News Feed Item

Capstone Mining Reports Record Cash Flow for 2014 Second Quarter

Operating cash flow before changes in working capital of $56.5 million
Net earnings of $16.6 million or $0.04 per share
(All amounts in US$ unless otherwise specified)

VANCOUVER, Aug. 7, 2014 /PRNewswire/ - Capstone Mining Corp. ("Capstone") (TSX: CS) today announced its financial results for the three and six months ended June 30, 2014. Net earnings for the quarter were $16.6 million and operating cash flow before changes in working capital(1) was a record $56.5 million. Copper production for the quarter at Capstone's three operating mines, Pinto Valley, Cozamin and Minto, totalled 27,738 tonnes of copper in concentrates and cathode (26,785 tonnes of payable copper) at a C1 cash cost(1) of $2.03 per payable pound of copper produced.

Capstone will hold a conference call and webcast on Friday, August 8, 2014 at 11:30 am Eastern time (8:30 am Pacific time) to discuss these results; call-in details are provided at the end of this release. This release should be read in conjunction with Capstone's unaudited condensed interim consolidated financial statements and management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2014, which are available on Capstone's website at: http://capstonemining.com/s/financial-statements.asp and on SEDAR. An updated corporate presentation, including results to June 30, 2014, will also be available at http://capstonemining.com/s/presentations.asp.

NOTE: The transaction to acquire the Pinto Valley Mine closed on October 11, 2013 and therefore its results of operations are included in the Company's reported results from that date forward. As such, there are no comparable Q2 2013 or 2013 YTD figures for the Pinto Valley Mine.

Overview

   Q2 2014   Q2 2013   2014 YTD   2013 YTD 
Revenue ($ millions) 171.7 58.3 332.5 115.9
         
Copper in concentrates produced (tonnes) 27,212 8,765 54,235 17,195
Copper cathode produced (tonnes) 526 - 1,147 -
         
Payable copper produced (tonnes) 26,785 8,419 53,444 16,530
C1 cash cost per payable pound of copper produced(1) ($)   2.03 1.70 1.96 1.71
         
Copper sold (tonnes) 24,563 7,783 51,164 14,632
Realized copper price per pound sold ($) 3.36 3.16 3.17 3.33
         
Net earnings ($ millions) 16.6 9.2 12.2 16.2
Net  earnings per common share ($) 0.04 0.02 0.03 0.04
         
Adjusted EBITDA(1) ($ millions) 64.8 28.8 121.2 52.8
Adjusted EBITDA(1) per common share ($) 0.17 0.08 0.32 0.14
         
Operating cash flow before changes in working
capital(1) ($ millions)
56.5 28.6 104.7 49.4
Operating cash flow before changes in working capital
per common share(1) ($)
0.15 0.08 0.27 0.13
         
Net debt (cash)(1) ($ millions) 181.0 (456.3) 181.0 (456.3)

"The second quarter shows a significant increase in cash flow driven by higher copper sales, primarily from Pinto Valley, coupled with consistent production from Cozamin and Minto," said Darren Pylot, President and CEO of Capstone. "Year-to-date Adjusted EBITDA(1) more than doubled year over year, demonstrating Capstone's substantial growth over the last 12 months."

Financial and Production Highlights for the Three Months Ended June 30, 2014

  • Net earnings of $16.6 million or $0.04 per common share which included:
    • Earnings from mining operations of $45.5 million,
      • Realized copper price of $3.36 per pound.
    • Production costs included a $1.8 million non-cash charge related to the write-down of inventory at Minto,
    • $15.2 million tax expense.
  • Adjusted EBITDA(1) of $64.8 million or $0.17 per common share after making adjustments for certain non-cash and other items.
  • Operating cash flow before changes in working capital(1) of $56.5 million or $0.15 per common share.
  • Working capital increased to $162.8 million at June 30, 2014 (which included $128.5 million of cash and cash equivalents) from $137.4 million at December 31, 2013.
  • Production of 26,785 tonnes of payable copper at a C1 cash cost(1) of $2.03 per pound of payable copper produced.
  • Revenue of $171.7 million generated primarily from the sale of 24,563 tonnes of payable copper.

Operational Highlights for the Three and Six Months Ended June 30, 2014

Pinto Valley Mine:

  • Produced 16,892 tonnes of copper in concentrates and 526 tonnes of copper cathode during Q2 2014.  The C1 cash cost(1) was $2.13 per pound of payable copper produced.
  • Produced 33,593 tonnes of copper in concentrates and 1,147 tonnes of copper cathode during 2014 YTD at a C1 cash cost(1) of $2.10 per pound of payable copper produced.
  • Pinto Valley's C1 cash cost(1) was negatively impacted by the loss of production resulting from a failure of one of six ball mills in May 2014 and its associated downtime for 25 days. The daily average throughput increased to 49,400 tonnes per day in June for a Q2 2014 average of 45,700 tpd versus a targeted rate of 50,000 tpd. Subsequent to quarter end, July throughput averaged 49,300 tpd.
  • Work is ongoing related to the implementation of improvements identified by the Pinto Valley Phase 2 prefeasibility study ("PV2 PFS"), with the project execution plan in place, orders for the majority of the mine equipment placed and detailed engineering underway.
  • Capstone believes there is potential to extend the mine life beyond the PV2 reserve life of 2026 if Mineral Resources not currently included in the PV2 life of mine plan can be successfully converted into Mineral Reserves. The Pinto Valley Phase 3 ("PV3") study was started in Q2 2014, and is composed of two phases. The first phase of PV3 - planned for completion by year end 2014 - will include high level mine plans, tailings storage and flow sheet analysis for various throughput expansion cases.

Cozamin Mine:

  • Produced 5,191 tonnes of copper in concentrates during Q2 2014 at a C1 cash cost(1) of $1.23 per pound of payable copper produced.
  • Produced 10,292 tonnes of copper in concentrates during 2014 YTD at a C1 cash cost(1) of $1.23 per pound of payable copper produced.
  • Exploration drilling from surface to test structural splays off of the main Mala Noche vein system at Cozamin commenced in Q2 2014. Many of these brownfield targets are on separate structures from the one hosting Cozamin's reserves and resources.
  • On August 5, 2014 Capstone filed a technical report updating Mineral Resource and Mineral Reserve estimates for Cozamin. The net impact was a reduction of approximately $7 million in net asset value.

Minto Mine:

  • Produced 5,129 tonnes of copper in concentrates during Q2 2014 at a C1 cash cost(1) of $2.46 per pound of payable copper produced.
  • Produced 10,350 tonnes of copper in concentrates during 2014 YTD at a C1 cash cost(1) of $2.20 per pound of payable copper produced.

Santo Domingo Project:

  • Released the Feasibility Study in June 2014 (prepared on a 100% basis; Capstone owns 70%), which had an after-tax net present value of $797 million (8% discount rate) and an after-tax internal rate of return of 17.9% with a payback period of 4.2 years.

Greenfield Exploration:

  • Exploration work continued during Q2 2014 at Project Providencia in Region III, Chile. Capstone completed the airborne magnetic, and versatile time domain electromagnetic and radiometric surveys and is now preparing for a drill program, forecasted to start in late 2014.

Production Outlook

Capstone's 2014 guidance for 102,000 tonnes ±5% of copper in concentrates, at a C1 cash cost(1) of $1.90 to $2.00 per pound of payable copper, net of by-product credits and selling costs, remains unchanged.

Conference Call and Webcast Details

Date:        Friday, August 8, 2014
Time:         11:30 am Eastern Time (8:30 am Pacific Time)
Dial in:         North America: 1-888-390-0546, International: +416-764-8688
Webcast:         http://www.newswire.ca/en/webcast/detail/1371699/1520925
Replay:         North America: 1-888-390-0541, International: +416-764-8677
Replay Passcode:       057773

The conference call replay will be available until August 22, 2014. The conference call audio and transcript will be available on Capstone's website within approximately 24 hours of the call at http://capstonemining.com/s/conference-calls.asp.

About Capstone Mining Corp.

Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. We are committed to the responsible development of our assets and the environments in which we operate. Our three producing mines are the Pinto Valley copper mine located in Arizona, US, the Cozamin copper-silver mine in Zacatecas State, Mexico and the Minto copper mine in Yukon, Canada. In addition, Capstone has two copper development projects; the large scale 70% owned copper-iron Santo Domingo project in Region III, Chile, in partnership with Korea Resources Corporation, and the 100% owned copper-zinc Kutcho project in British Columbia, Canada, as well as exploration properties in Chile. Using our cash flow and strong balance sheet as a platform, Capstone's strategy is to continue to grow with mineral resource and reserve expansions and exploration, and through acquisitions in politically stable, mining-friendly regions. We will pace our growth with our financial capacity, ensuring we retain, as a priority, sufficient financial flexibility to meet the requirements of our existing operations and our committed development projects, while maintaining an adequate cushion to deal with market volatility and operating risks inherent in the mining industry. Our headquarters are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX). Further information is available at www.capstonemining.com.

Cautionary Note Regarding Forward-Looking Information

This document may contain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this document and Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation.

Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "outlook", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. In this document, certain forward-looking statements are identified by words including "may", "future", "expected", "intends" and "estimates". By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of resources; possible variations in ore reserves, grade or recovery rates; accidents, dependence on key personnel, labour pool constraints, labour disputes; availability of infrastructure required for the development of mining projects; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; and other risks of the mining industry as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review under the Company's profile on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

National Instrument 43-101 Compliance

Unless otherwise indicated, Capstone has prepared the technical information in this news release ("Technical Information") based on information contained in the technical reports, news releases and MD&A's (collectively the "Disclosure Documents") available under Capstone Mining Corp.'s company profile on SEDAR at www.sedar.com. Each Disclosure Document was prepared by, or under the supervision of, a qualified person (a "Qualified Person") as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101").  Readers are encouraged to review the full text of the Disclosure Documents which qualifies the Technical Information.  Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic viability. The Disclosure Documents are each intended to be read as a whole, and sections should not be read or relied upon out of context. The Technical Information is subject to the assumptions and qualifications contained in the Disclosure Documents.

The technical information in this news release ("Technical Information") was prepared by, or under the supervision of, a qualified person (a "Qualified Person") as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101"). The disclosure of the Technical Information contained in this news release has been reviewed and approved by Brad Skeeles, P. Eng., Vice President of North American Operations, Brad Mercer, P. Geol., Vice President, Exploration (Technical Information related to mineral exploration activities), and Gregg Bush, P. Eng., Senior Vice President and Chief Operating Officer, all Qualified Persons under NI 43-101.

Alternative Performance Measures

The items marked with a "(1)" are alternative performance measures and readers should refer to Alternative Performance Measures in the Company's Interim Management's Discussion and Analysis for the three and six months ended June 30, 2014 as filed on SEDAR and as available on the Company's website for further details.

Cautionary Note to United States Investors

This news release contains disclosure that has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of U.S. securities laws. Without limiting the foregoing, this news release may refer to technical reports that use the terms "indicated" and "inferred" resources. U.S. investors are cautioned that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. Under U.S. standards, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U.S. investors are cautioned not to assume that all or any part of indicated resources will ever be converted into reserves. U.S. investors should also understand that "inferred resources" have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of "inferred resources" will ever be upgraded to a higher category. Therefore, U.S. investors are also cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally or economically. Accordingly, information concerning descriptions of mineralization and resources contained in this news release may not be comparable to information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC.

SOURCE Capstone Mining Corp.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
In his session at Cloud Expo, Alan Winters, an entertainment executive/TV producer turned serial entrepreneur, will present a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to m...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and management into a ...
SYS-CON Events announced today that SD Times | BZ Media has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. BZ Media LLC is a high-tech media company that produces technical conferences and expositions, and publishes a magazine, newsletters and websites in the software development, SharePoint, mobile development and commercial UAV markets.
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., will discuss how these tools can be leveraged to develop a lasting competitive advanta...
Building custom add-ons does not need to be limited to the ideas you see on a marketplace. In his session at 20th Cloud Expo, Sukhbir Dhillon, CEO and founder of Addteq, will go over some adventures they faced in developing integrations using Atlassian SDK and other technologies/platforms and how it has enabled development teams to experiment with newer paradigms like Serverless and newer features of Atlassian SDKs. In this presentation, you will be taken on a journey of Add-On and Integration ...
Now that the world has connected “things,” we need to build these devices as truly intelligent in order to create instantaneous and precise results. This means you have to do as much of the processing at the point of entry as you can: at the edge. The killer use cases for IoT are becoming manifest through AI engines on edge devices. An autonomous car has this dual edge/cloud analytics model, producing precise, real-time results. In his session at @ThingsExpo, John Crupi, Vice President and Eng...
There are 66 million network cameras capturing terabytes of data. How did factories in Japan improve physical security at the facilities and improve employee productivity? Edge Computing reduces possible kilobytes of data collected per second to only a few kilobytes of data transmitted to the public cloud every day. Data is aggregated and analyzed close to sensors so only intelligent results need to be transmitted to the cloud. Non-essential data is recycled to optimize storage.
"I think that everyone recognizes that for IoT to really realize its full potential and value that it is about creating ecosystems and marketplaces and that no single vendor is able to support what is required," explained Esmeralda Swartz, VP, Marketing Enterprise and Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" ...
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, will present an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He will expound on the industry issues he frequently came up against as an analyst, and...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists l...
In their Live Hack” presentation at 17th Cloud Expo, Stephen Coty and Paul Fletcher, Chief Security Evangelists at Alert Logic, provided the audience with a chance to see a live demonstration of the common tools cyber attackers use to attack cloud and traditional IT systems. This “Live Hack” used open source attack tools that are free and available for download by anybody. Attendees learned where to find and how to operate these tools for the purpose of testing their own IT infrastructure. The...