Capstone Reports Record Revenue and Strong Earnings for 2010By Capstone Mining Corp., PRNE
Sunday, March 13, 2011
VANCOUVER, March 14, 2011 - Capstone Mining Corp. (CS: TSX) today announced its financial results for
the year ended December 31, 2010. Net earnings for the year were $72.6
million and cash flow from operating activities was $86.3 million. Capstone
ended the year with cash, restricted cash and short-term deposits on hand of
$192.4 million. Copper production for the year at Capstone's two mines,
Cozamin and Minto, totalled 73 million pounds of payable copper at an
estimated total cash cost1 of $1.40 per payable pound.
Capstone will hold a conference call Tuesday, March 15, 2011 at 11:30 am
Eastern time (8:30 am Pacific time) to discuss these results; call-in details
are provided at the end of this release. This release should be read in
conjunction with Capstone's year end 2010 consolidated financial statements
and management's discussion and analysis ("MD&A") which are available on
Capstone's website at: capstonemining.com/s/FinancialStatements.asp.
An updated corporate presentation, including results to December 31, 2010, is
also available at capstonemining.com/s/Presentation.asp.
2010 Overview Total Total 2010 2009 Gross sales revenue ($ millions) 301.3 250.4 Payable copper produced (millions lbs) 73.0 86.6 Total cash cost per payable pound of copper produced (1) ($) 1.40 1.03 Copper sold - (millions lbs) 72.8 85.3 Net earnings (loss) for the period ($ millions) 72.6 (18.3) Earnings (loss) per common share ($) 0.36 (0.10) Adjusted net earnings (1) ($ millions) 45.1 65.7 Adjusted Earnings (1) per common share ($) 0.23 0.35 Cash flow from operating activities ($ millions) 86.3 112.1 Cash flow from operating activities per common share ($) 0.43 0.60 Cash, restricted cash & short-term deposits ($ millions) 192.4 118.4
"Capstone delivered robust financial results throughout 2010, with record
revenue and strong cash flow resulting in a year-end cash, restricted cash
and short-term deposit balance of $192 million," said Darren Pylot, President
and CEO of Capstone Mining Corp. "We increased reserves and resources at both
of our operating mines and made new discoveries with the Wildfire and Inferno
deposits at Minto and the Mala Noche Footwall Zone at Cozamin. In addition,
we look forward to advancing our third project, Kutcho, towards a production
decision in 2011."
Financial and Production Highlights for the Year Ended December 31, 2010
- Net earnings of $72.6 million or $0.36 per common share which included:
- Earnings from mining operations of $117.9 million,
- Realized copper price of $3.42 per pound,
- Gains on disposal of investments of $26.1 million,
- Net loss of $15.5 million on derivative instruments, and
- $36.1 million in current and future tax expenses.
- Adjusted net earnings(1) were $45.1 million or $0.23 per common share,
after making adjustments for certain non-cash and non-recurring items.
- Cash flow from operating activities of $86.3 million, or $0.43 per
- Working capital increased to $176.8 million at December 31, 2010, which
included $192.4 million of cash, restricted cash and short-term deposits.
- Fully repaid the final C$10.0 million of the Minto Project debt and the
$8.5 million owing to the Alaska Industrial Development & Export Authority
related to the refurbishment of the Skagway port facilities, both ahead of
- Produced a total of 73.0 million pounds of payable copper at an
estimated total cash cost1 of $1.40 per pound of payable copper.
- Gross sales revenue of $301.3 million on the sale of 72.8 million
pounds of copper, 15.0 million pounds of zinc, 9.4 million pounds of lead,
25,460 ounces of gold and 1,582,033 ounces of silver.
- Cozamin, Mexico
- Produced 34.1 million pounds of payable copper at a total cash cost1 of
US$1.25 per pound.
- Updated the mineral reserve estimates for the Cozamin Mine,
incorporating a new mineral resource estimate, resulting in more than an
eight year life.
- Discovered and expanded the Mala Noche Footwall Zone ("MNFWZ"), located
in close proximity to the current mineral reserve and active mine haulage.
Exploration is continuing, with a new mineral resource estimate expected in
- Drove a cross-cut into the MNFWZ and lateral drifting was conducted on
one of several veins within the MNFWZ structure to determine strike
continuity and to conduct face and back mapping. The lateral drifting has 170
metres of advance at 4 metres wide and a 2% copper grade.
- Minto, Yukon
- Produced 38.9 million pounds of payable copper at a total cash cost1 of
US$1.53 per pound.
- Reported a 44% increase in the measured and indicated mineral resources
contained in the undeveloped deposits (excluding the "Main" deposit currently
being mined and the recently discovered Wildfire/Copper Keel and Inferno
deposits) based on drilling to the end of April 2010.
- Reported a first-time mineral resource estimate for the Minto East
- Completed a Titan-24 survey over more than 85% of the property,
identifying 73 anomalies that warrant further exploration.
- Made two new discoveries, Wildfire and Inferno. These discoveries were
the result of testing a combination of Titan-24 geophysical anomalies and
- The Phase V Prefeasibility study was substantially completed in 2010
and released in March 2011, extending the Minto mine life to 2020, at an
average annual production of 43.0 million pounds of copper in concentrates,
at a total cost per pound of payable copper of $1.34, net of by-product
- The Water Board hearing for the amended Water Use License was completed
in December. The amended license is anticipated before the end of the first
quarter of 2011.
- The Yukon Environmental and Socio-Economic Assessment Board evaluation
for the Phase IV Permit application was completed in 2010 and the Quartz
Mining License is expected by the end of the first quarter of 2011.
- Kutcho, British Columbia
- Issued an updated Preliminary Economic Assessment that significantly
enhanced the economic return of the project.
- Conducted a drilling and metallurgical program to advance the project
to a Prefeasibility Study.
- Mineral resource definition drilling within the Esso deposit
intersected some exceptionally high copper-zinc-silver-gold values.
- Issued a new NI 43-101 compliant Mineral Resource for the Esso deposit
in December 2010 with increases in resource classification and substantial
increases in metal grades.
- As reported February 24, 2011, completed a Preliminary Feasibility
study for Kutcho, providing a 12 year mine life, with an IRR of 27%, NPV of
C$155 million at a 10% discount rate and a 3.4 year payback after tax. A
technical report is expected to be filed on SEDAR by the end of March 2011.
- In January 2011, fully repaid the C$17.4 million owing to Yukon Energy
Corporation related to the spur and main power lines servicing the Minto
mine, 7 years ahead of schedule.
Capstone forecasts that 2011 production will be 80 to 85 million pounds
of contained copper at a total cash cost per pound of payable copper of $1.30
to $1.35. Production is scheduled to ramp up over the four quarters of 2011
at the Minto Mine as crushing modifications are completed to increase
throughput. Full production from the Avoca stopes at the Cozamin Mine will be
delayed until late in the first quarter of 2011 as rehabilitation work is
completed as a result of the rock fall incident in late 2010, but is not
expected to impact annual production.
Conference Call Details
Capstone will host a conference call on Tuesday, March 15, 2011 to discuss
these results. The conference call and webcast details are as follows:
Date: Tuesday, March 15, 2011 Time: 11:30 am Eastern Time (8:30 am Pacific Time) Dial in: North America - 1.888.231.8191, International - 1.647.427.7450 Webcast: www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3384920 Replay: North America - 1.800.642.1687, International - 1.416.849.0833 Replay Pass code: 14853632
The conference call replay will be available until March 22, 2011. A
transcript of the call will also be made available on Capstone's website
(capstonemining.com/s/ConferenceCalls.asp) within 24 hours of the
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 the
Company does not intend, and does not assume any obligation, to update these
forward-looking statements, except as required under applicable securities
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, labour disputes and other risks of the mining
industry; delays in obtaining governmental approvals or financing or in the
completion of development or construction activities; 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
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 disclosure in this news release of all technical information has been
prepared under the supervision of Robert Barnes, Professional Engineer, Vice
President Operations of the Company, and Brad Mercer, Professional Geologist,
Vice President Exploration of the Company, both Qualified Persons under NI
Non-GAAP Performance Measures
The items marked with a "1" are non-GAAP performance measures and readers
should refer to Non-GAAP Performance Measures in the Company's Annual
Management's Discussion and Analysis for the year ended December 31, 2010 as
filed on SEDAR and as available on the Company's website for further details.
1) This is a non-GAAP performance measure; please see "Non-GAAP
Performance Measures" below.
For further information: Capstone Mining Corp. Cindy Burnett, VP, Investor Relations Telephone: +1-604-637-8157 Email: email@example.com Website: www.capstonemining.com
For further information: Capstone Mining Corp., Cindy Burnett, VP, Investor Relations, Telephone: +1-604-637-8157, Email: cburnett at capstonemining.com
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