Capstone Reports 2012 Second Quarter Financial Results With Steady Cash Flow from Operations
Cash Flow from Operating Activities of $28.7 million, Net Earnings of $12.5 million or $0.03 per share
(All amounts in US$ unless otherwise specified)
VANCOUVER, Aug. 14, 2012 /PRNewswire/ - Capstone Mining Corp. ("Capstone") (TSX: CS) today announced its financial results for the three and six months ended June 30, 2012. Net earnings for the quarter were $12.5 million and cash flow from operating activities was $28.7 million. Capstone ended the quarter with cash on hand of $489.3 million, and a $200 million credit facility. Copper production for the quarter at Capstone's two operating mines, Cozamin and Minto, totalled 21.9 million pounds in concentrates at a total cash cost(1) of $1.36 per payable pound.
Capstone will hold a conference call and webcast on Wednesday, August 15, 2012 at 11:30 am Eastern time (8:30 am Pacific time) to discuss these results; call-in details are provided at the end of this release. This release should be read in conjunction with Capstone's unaudited condensed interim consolidated financial statements and management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2012, which are available on Capstone's website at: http://capstonemining.com/s/Financial_Statements.asp. An updated corporate presentation, including results to June 30, 2012, will also be available at http://capstonemining.com/s/Presentation.asp.
June 30, 2012
June 30, 2011
June 30, 2012
June 30, 2011
|Gross sales revenue ($ millions)||75.1||78.9||150.3||189.0|
|Copper in concentrates produced (million lbs)||21.9||21.2||40.5||37.9|
|Payable copper produced (million lbs)||21.1||20.5||39.1||36.6|
|Total cash cost per payable pound of copper produced (1) ($)||1.36||1.31||1.40||1.44|
|Copper sold (million lbs)||20.0||16.5||36.2||39.3|
|Realized copper price per pound ($)||3.49||4.21||3.58||4.27|
|Net earnings ($ millions)||12.5||15.5||28.2||34.4|
|Earnings per common share ($)||0.03||0.07||0.07||0.16|
|Adjusted net earnings(1) ($ millions)||15.1||17.7||37.0||34.4|
|Adjusted net earnings(1) per common share ($)||0.04||0.08||0.10||0.16|
|Cash flow from operating activities ($ millions)||28.7||29.7||46.5||36.5|
|Cash flow from operating activities per common share(1) ($)||0.08||0.13||0.12||0.17|
|Cash and cash equivalents ($ millions)||489.3||506.6|
(1) The items marked with a "1" are alternative performance measures; please see "Alternative Performance Measures" at the end of this release.
"Despite challenging worldwide economic conditions and the softness in copper prices, second quarter results were in line with our expectations and are on target to meet our guidance for the year," said Darren Pylot, President and CEO of Capstone. "Both operations ran well, copper production increased and cash costs decreased compared to the first quarter of 2012, generating cash flow from operating activities of $28.7 million in the quarter."
"Our operating cash flow, combined with our cash balance, credit facility and the Korea Resources Corporation joint venture and financing agreement for our Santo Domingo project, give us considerable financial flexibility in these uncertain markets, allowing us to advance our growth plans," continued Mr. Pylot.
Financial and Production Highlights for the Three Months Ended June 30, 2012
- Recorded net earnings of $12.5 million or $0.03 per common share which included:
- Earnings from mining operations of $25.7 million,
- Realized copper price of $3.49 per pound.
- $8.9 million in current and deferred tax expenses.
- Adjusted net earnings(1) were $15.1 million or $0.04 per common share after making adjustments for certain non-cash and non-recurring items.
- Generated cash flow from operating activities of $28.7 million or $0.08 per common share.
- Working capital increased to $543.0 million at June 30, 2012 (which included $489.3 million of cash and cash equivalents) from $533.1 million at December 31, 2011.
- Produced a total of 21.1 million pounds of payable copper at an estimated total cash cost(1) of $1.36 per pound of payable copper produced.
- Recorded gross sales revenue of $75.1 million on the sale of 20.0 million pounds of copper, 3.0 million pounds of zinc, 0.8 million pounds of lead, 2,353 ounces of gold and 439,209 ounces of silver.
Financial and Production Highlights for the Six Months Ended June 30, 2012
- Recorded net earnings of $28.2 million or $0.07 per common share which included:
- Earnings from mining operations of $55.3 million,
- Realized copper price of $3.58 per pound.
- $16.5 million in current and deferred tax expenses.
- Adjusted net earnings(1) were $37.0 million or $0.10 per common share after making adjustments for certain non-cash and non-recurring items.
- Generated cash flow from operating activities of $46.5 million or $0.12 per common share.
- Produced a total of 39.1 million pounds of payable copper at an estimated total cash cost(1) of $1.40 per pound of payable copper produced.
- Recorded gross sales revenue of $150.3 million on the sale of 36.2 million pounds of copper, 6.8 million pounds of zinc, 1.7 million pounds of lead, 5,984 ounces of gold and 825,036 ounces of silver.
Operational Highlights for the Three Months Ended June 30, 2012
Cozamin Mine, Mexico:
- Achieved copper production of 12.1 million pounds.
- Recorded cash costs(1) of $1.03 per pound of payable copper produced.
- Continued the 32,000 metre 2012 exploration program focused on the Mala Noche Footwall Zone and the Mala Noche Vein, drilling 7,386 metres and 3,077 metres respectively during the quarter, bringing the year-to-date totals to 14,586 metres and 5,028 metres respectively for a total of 19,614 metres.
Minto Mine, Yukon:
- Achieved copper production of 9.8 million pounds.
- Recorded cash costs(1) of $1.76 per pound of payable copper produced.
- Completed pre-stripping of the Area 2 pit with ore release from Area 2 feeding the mill during the second quarter.
- Finished the 2012 exploration drill program on budget, completing 10,802 metres during the quarter, bringing the year-to-date total to 29,539 metres.
- Commenced 3-D modeling in preparation for the first mineral resource estimate on the Fireweed prospect, expected to be completed during 2012.
- Completed the Minto Mine Phase VI pre-feasibility study in June 2012, which generates an after-tax net present value of $192 million based on $3.25 per pound copper at a discount rate of 8%. The study extends the mine life to 2022 with average annual copper production of 40 million pounds at a cash cost per pound of payable copper produced(1) of $1.92 and a capital cost of $103 million.
Santo Domingo Project, Chile:
- Continued preparation of the bankable feasibility study and basic engineering; completion is scheduled for the first quarter of 2013.
- Continued preparation of the environmental impact study with planned submission in the fourth quarter of 2012.
- Started 3-D modeling in preparation for an updated mineral resource estimate to be included in the feasibility study.
- Completed a metallurgical drill program in the Iris Norte zone.
Kutcho Project, British Columbia:
- Advanced basic engineering and permitting activities throughout the quarter.
Capstone's 2012 guidance of 80 million pounds (± 5%) of copper contained in concentrates at a total cash cost(1) of $1.55 to $1.65 per pound of payable copper, net of by-product credits and selling costs, remains unchanged.
With copper production of 40.5 million pounds for the first six months of the year and operations at both mines running according to plan, we are on target to meet our guidance for the year.
Conference Call and Webcast Details
Capstone will host a conference call and webcast on Wednesday, August 15, 2012 at 11:30 am Eastern time (8:30 am Pacific time).
|Date:||Wednesday, August 15, 2012|
|Time:||11:30 am Eastern Time (8:30 am Pacific Time)|
|Dial in:||North America: 1-888-231-8191, International: 1-647-427-7450|
|Replay:||North America: 1-855-859-2056, International: 1-416-849-0833|
The conference call replay will be available until August 29, 2012. 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 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 at properties in Australia, Canada, Chile and Mexico. Using its cash flow and strong balance sheet as a springboard, Capstone aims to grow organically through continued mineral resource and reserve expansions and through acquisitions in politically stable, mining-friendly regions. Additional 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 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 "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; 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 John Sagman, P. Eng., Capstone's Vice President, Technical Services (Technical Information related to mining and production) and Brad Mercer, P. Geol., Capstone's Vice president, Exploration (Technical Information related to mineral exploration activities), both Qualified Persons under NI 43-101. In addition, Gregg Bush, Senior Vice President and Chief Operating Officer for Capstone reviewed all Technical Information in this news release.
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,
2012 as filed on SEDAR and as available on the Company's website for
SOURCE Capstone Mining Corp.