Gross Sales Revenue of $301.3m, Net Earnings of $72.6m ($0.36 per share)
(All amounts in US$ unless otherwise specified)
VANCOUVER, March 14 /PRNewswire-FirstCall/ - 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 $1.40 per payable pound.
Capstone will hold a conference call Tuesday, March 15, 2011 at 11:30 am Eastern time (8:30 am Pacific time) to discuss these results; call-in details are provided at the end of this release. This release should be read in conjunction with Capstone's year end 2010 consolidated financial statements and management's discussion and analysis ("MD&A") which are available on Capstone's website at:
http://capstonemining.com/s/FinancialStatements.asp. An updated corporate presentation, including results to December 31, 2010, is also available at http://capstonemining.com/s/Presentation.asp.
|Total 2010||Total 2009|
|Gross sales revenue ($ 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 earnings1 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 common share.
- 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 schedule.
- 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 2011.
- 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 discovery.
- 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 geological models.
- 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 credits.
- 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|
|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 (http://capstonemining.com/s/ConferenceCalls.asp) within 24 hours of the call.
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 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, 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 statements.
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 43-101.
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.
1This is a non-GAAP performance measure; please see "Non-GAAP Performance Measures" below.
SOURCE Capstone Mining Corp.