Capstone Mining 2013 Third Quarter Production Results

Third quarter production of 18.9 million pounds of copper in concentrates

VANCOUVER, Oct. 10, 2013 /PRNewswire/ - Capstone Mining Corp. ("Capstone") (TSX: CS) today announced operating results for the three and nine months ended September 30, 2013 of its two operating mines, Cozamin and Minto. Combined production totalled 18.9 and 56.9 million pounds of copper in concentrates in the third quarter and year-to-date period, respectively, with additional by-products of zinc, lead, silver and gold.

 Q3 2013 Production          
    Q1   Q2   Q3   YTD
2013
Cozamin  
  Copper in concentrates
(thousands of pounds)
  10,142   12,123   11,623   33,888
  C1 cash cost per pound(1)   $1.06   $1.22   $1.20   $1.17
Minto  
  Copper in concentrates
(thousands of pounds)
  8,444   7,201   7,326   22,970
  C1 cash cost per pound(1)   $2.50   $2.49   $2.14   $2.38
Total  
  Copper in concentrates
(thousands of pounds)
  18,586   19,324   18,949   56,859
  C1 cash cost per pound(1)   $1.72   $1.70   $1.57   $1.66
           

(1) This is an alternative performance measure; please see "Alternative Performance Measure" at the end of this release. C1 cash cost per pound is per pound of payable copper produced. All amounts in US$ unless otherwise specified.

"Both operations produced another steady quarter and are operating according to plan," said Darren Pylot, President and CEO of Capstone. "At Minto we have accessed the open pit and underground high grade ore which will increase production levels for the remainder of this year."

Operational Highlights for the Three and Nine Months Ended September 30, 2013

  • Production of 18.9 and 56.9 million pounds of copper contained in concentrates, respectively.

  • By-product production of 4.5 and 13.7 million pounds of zinc, 0.4 and 2.5 million pounds of lead and 465,161 and 1,346,008 ounces of silver in concentrates. Final gold production is not available since assaying is conducted off-site, but is estimated at 2,894 and 9,235 ounces for the respective periods.

  • At Cozamin, operations are tracking well against plan. Throughput, grade and recoveries are all at, or very close to expectations for the quarter and year-to-date. Costs on a per pound basis remain somewhat elevated due to the continuing strength of the Mexican Peso and higher haulage costs. Despite the slight decrease in costs from the second quarter, they remain above guidance but are expected to decrease over the remainder of the year.

  • At Minto, operations ran well in the third quarter, with the mining rate increasing in order to access high grade ore from the open pit. We have reached both the high grade material from the pit as well as the ore lens underground. Ore development commenced from underground in early September, to confirm ore zone grades and geometry while the permanent ventilation raise is constructed. Expenditures for the quarter continued in line with expectations, but cash cost remained lower than expected given the deferral of stripping costs in the third quarter. No additional deferral of stripping costs is expected over the remainder of the year given the significant volume of higher grade ore to be released in the fourth quarter.

 Q3 2013 Operating Details    
  Cozamin Minto
  Q3 2013 YTD 2013 Q3 2013 YTD 2013
Production(2) (contained in concentrates)
  - Copper (000s pounds) 11,623 33,888 7,326 22,970
  - Zinc (000s pounds) 4,477 13,664 - -
  - Lead (000s pounds) 402 2,451 - -
  - Silver (ounces) 431,160 1,250,157 34,001 95,851
  - Gold (ounces) - - 2,894 9,235
Mine (tonnes)
  - Ore 296,316 892,842 303,973 826,621
  - Waste - - 2,941,316 8,244,230
Mill
  - Tonnes processed 292,908 891,637 360,286 1,043,241
  - Tonnes processed per day 3,184 3,266 3,916 3,821
  - Copper grade (%) 1.96 1.86 1.00 1.09
  - Zinc grade (%) 1.17 1.11 - -
  - Lead grade (%) 0.15 0.22 - -
  - Silver grade (g/t) 63.8 61.1 3.8 3.8
  - Gold grade (g/t) - - 0.32 0.36
Recoveries
  - Copper (%) 92.0 92.6 92.2 91.3
  - Zinc (%) 59.3 62.5 - -
  - Lead (%) 41.7 56.7 - -
  - Silver (%) 71.8 71.4 76.6 75.5
  - Gold (%) - - 77.0 76.3
Concentrates(2)
  - Copper concentrates (dmt) 20,976 59,620 9,791 29,640
    Copper (%) 25.1 25.8 33.9 35.2
    Silver (g/t) 597.0 571.6 108.0 100.6
    Gold (g/t) - - 9.2 9.7
  - Zinc concentrates (dmt) 4,217 12,900 - -
    Zinc (%) 48.2 48.0 - -
  - Lead concentrates (dmt) 373 1,933 - -
    Lead (%) 49.0 57.5 - -
    Silver (g/t) 2,405 2,485 - -
Payable copper produced (000s lbs) 11,105 32,411 7,088 22,224
C1 cash cost(1)
(per pound of payable of copper produced)
$1.20 $1.17 $2.14 $2.38
YTD totals may not add due to rounding. (2) Adjustments based on final settlements will be made in future periods.

Production Outlook

Capstone's 2013 guidance of 85 million pounds (± 5%) of copper contained in concentrates at a C1 cash cost(1) of $1.65 to $1.75 per pound of payable copper, net of by-product credits and selling costs, remains unchanged.

(1) These are alternative performance measures; please see "Alternative Performance Measures" at the end of this release.

Q3 Financial Results Timing

Capstone will report 2013 third quarter financial results on Wednesday, October 30, 2013 after market close, followed by a conference call and webcast for investors and analysts on Thursday, October 31, 2013 at 11:30 am Eastern Time (8:30 am Pacific Time).

Date:    Thursday, October 31, 2013
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/1209423/1327063
Replay:     North America: 1-888-390-0541, International: +416-764-8677
Replay Passcode:   438476
   

The conference call replay will be available until November 14, 2013. 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, committed to the responsible development of our assets and the environments in which we operate. We are preferentially focused on copper, with two producing copper mines, the Cozamin copper-silver-zinc-lead mine located in Zacatecas State, Mexico and the Minto copper-gold-silver mine in Yukon, Canada. In addition, Capstone has two development projects, the large scale 70% owned Santo Domingo copper-iron-gold project in Chile in partnership with Korea Resources Corporation and the 100% owned Kutcho copper-zinc-gold-silver project in British Columbia, as well as exploration properties in Canada, Chile, Mexico and Australia. Using our cash flow and strong balance sheet as a springboard, Capstone aims to grow with continued mineral resource and reserve expansions, exploration, and through acquisitions in politically stable, mining-friendly regions. Our headquarters are in Vancouver, Canada and we are listed on the TSX. Further information is available at www.capstonemining.com.

Cautionary Note Regarding Forward-Looking Information

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

Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the conversion of mineral resources to mineral reserves, the realization of mineral reserve estimates, the anticipated date of closing of the acquisition of Pinto Valley and the associated financing, 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 "scheduled", "guidance", "plan", "planned", "estimated", "projections", "projected" and "expected". By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents; 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 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. There can be 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 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, a Qualified Person under NI 43-101. In addition, Gregg Bush, Senior Vice President and Chief Operating Officer reviewed all Technical Information in this news release.

Alternative Performance Measures

The item marked with (1) "C1 Cash Cost per Pound of Payable Copper Produced" is an Alternative Performance Measure. This performance measure is included because this statistic is a key performance measure that management uses to monitor performance. Management uses this statistic to assess how the Company is performing to plan and to assess the overall effectiveness and efficiency of mining operations. This performance measure does not have a meaning within IFRS and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. This performance measure should not be considered in isolation as a substitute for measures of performance in accordance with IFRS.

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 uses 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.



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