Capstone Copper Reports Fourth Quarter and Full-Year
NEWS RELEASE
TSX:CS ● capstonecopper.com
1 These are alternative performance measures. Refer to the section entitled “Alternative Performance Measures” in the Cautionary Notes 1
February 15, 2023
Capstone Copper Reports Fourth Quarter and Full-Year
2022 Financial Results
All amounts in US$ unless otherwise indicated
Vancouver, British Columbia – Capstone Copper Corp. (“Capstone” or the “Company”) (TSX:CS) today
reported financial results for the three months and year ended December 31, 2022 (“Q4 2022” and "2022").
The results are preliminary and subject to change based on final results. Q4 copper production totaled 45,500
tonnes at C1 cash costs1 of $2.50 per payable pound of copper produced. As previously reported on February
1, 2023, Capstone achieved production and cost guidance for the period April 1, 2022 to December 31, 2022,
with consolidated copper production o f 136.3 thousand tonnes at C1 cash costs 1 of $2.68/lb. Link HERE for
Capstone’s Q4 2022 webcast presentation.
John MacKenzie, CEO of Capstone, commented, "We achieved several major milestones in 2022 following
the Capstone/Mantos merger in late Q1 including the successful integration of the two companies, the release
of our MV -SD District Integration Plan, the ramp -up at Mantos Blancos, and tremendous progress at our
transformational Mantoverde De velopment Project ("MVDP"), which remains on -time and on -budget. This
year, 2023, is pivotal for Capstone as we expect to complete MVDP construction in Q4 setting the stage for a
doubling of consolidated cash flow and positioning us well for further growth".
Q4 2022 HIGHLIGHTS
• Net income of $136.1 million, or $0.20 per share, for 2022, and net loss of $28.4 million, or $(0.03) per
share for Q4 2022.
• Adjusted net income 1 of $84.5 million, or $0.14 per share for 2022, and $52.9 million or $0.06 per
share for Q4 2022. Q4 2022 is down $20.3 million, or $0.12 per share, compared to the same quarter
last year due to a lower copper price and inflationary pressure on costs.
• Adjusted EBITDA1 of $352.8 million for 2022 compared to $432.2 million for 2021. Adjusted EBITDA1
of $80.5 million for Q4 2022, which includes a realized provisional pricing loss of $7.8 million relating
to Q3 and Q2, compared to Adjusted EBITDA1 of $113.3 million in Q4 2021. The decrease in Adjusted
EBITDA1 is driven by a lower realized copper price and inflationar y pressure on costs, particularly
sulphuric acid and diesel fuel costs.
• Operating cash flow before changes in working capital of $99.4 million in Q4 2022 compared to
$104.9 million in Q4 2021.
• Achieved production and cost guidance for the period from April 1, 2022 to December 31, 2022, with
consolidated copper production of 136.3 thousand tonnes at C1 cash costs1 of $2.68/lb. Consolidated
copper production for Q4 2022 of 45.5 thousand tonnes at C1 cash costs 1 of $2.50/lb of copper
1 These are alternative performance measures. Refer to the section entitled “Alternative Performance Measures” in the Cautionary Notes 2
produced for Q4 2022, which consisted of 15 thousand tonnes at Pinto Valley, 5.8 thousand tonnes at
Cozamin, 14.2 thousand tonnes at Mantos Blancos, and 10.5 thousand tonnes at Mantoverde.
• Total available liquidity1 of $697 million as at December 31, 2022, composed of $172 mill ion of cash
and short-term investments, and $525 million of undrawn amounts on corporate revolving credit facility
which was expanded during the fourth quarter to $600 million.
• Mantos Blancos Concentrator Debottlenecking Project ("MB-CDP") completed ramp up to commercial
production in December, 2022.
• MVDP remains on budget and on schedule. Construction is progressing well on all key areas of the
project. Total project spend inception-to-date was approximately $579 million at the end of December
2022 on a total budget of $825 million.
• Mantoverde - Santo Domingo ("MV-SD") District Integration Plan was presented during Q4 2022
outlining the approach Capstone is taking to maximize value creation (including synergies) across the
district.
Unaudited tabular amounts are in millions of U.S. dollars except number of shares and per share amounts,
unless otherwise noted.
1 These are alternative performance measures. Refer to the section entitled “Alternative Performance Measures” in the Cautionary Notes 3
CONSOLIDATED FINANCIAL RESULTS
($ millions, except per share
data)
Q4 20223
(unaudited)
Q4 2021 20223
(unaudited)
2021 2020
Revenue 362.1 215.9 1,296.0 794.8 453.8
Net (loss) income (28.4) 41.4 136.1 252.9 12.4
Net (loss) income attributable to
shareholders (20.9) 41.4 122.2 226.8 12.6
Net (loss) income attributable to
shareholders per common share -
basic ($) (0.03) 0.10 0.20 0.56 0.03
Net (loss) income attributable to
shareholders per common share -
diluted ($) (0.03) 0.10 0.19 0.55 0.03
Operating cash flow before
changes in working capital1,2 99.4 104.9 224.4 556.3 131.2
Adjusted EBITDA1 80.5 113.3 352.8 432.2 139.2
Adjusted net income1 52.9 73.2 84.5 241.6 26.4
Adjusted net income attributable
to shareholders1 40.8 73.2 85.6 242.1 26.4
Adjusted net income attributable to
shareholders per common share -
basic 0.06 0.18 0.14 0.60 0.07
Adjusted net income attributable to
shareholders per common share -
diluted 0.06 0.18 0.14 0.58 0.07
Realized copper price1
($/pound) 3.74 4.61 3.76 4.42 2.99
Net (debt) / cash1 (483.1) 264.4 (483.1) 264.4 (124.9)
Attributable net (debt) / cash 1 (339.9) 264.4 (339.9) 264.4 (125.6)
Total assets 5,380.9 1,728.0 5,380.9 1,728.0 1,391.6
Total non-current financial
liabilities 709.5 38.4 709.5 38.4 183.6
2 2021 includes $180.0 million silver and gold stream proceeds
3 2022 financial information is based on unaudited annual results.
1 These are alternative performance measures. Refer to the section entitled “Alternative Performance Measures” in the Cautionary Notes 4
CONSOLIDATED OPERATIONAL RESULTS
Q4 2022 Q4 2021 2022 2021
Copper production (000s tonnes)
Sulphides business
Pinto Valley 15.0 16.8 56.8 60.5
Cozamin 5.8 6.6 24.5 24.4
Mantos Blancos 10.0 — 29.0 —
Total sulphides 30.8 23.4 110.3 84.9
Cathode business
Mantos Blancos 4.2 — 12.2 —
Mantoverde2 10.5 — 36.3 —
Total cathodes 14.7 — 48.5 —
Consolidated 45.5 23.4 158.8 84.9
Copper sales
Copper sold (000s tonnes) 44.7 21.2 159.9 81.1
Realized copper price1 ($/pound) 3.74 4.61 3.76 4.42
C1 cash costs1 ($/pound) produced
Sulphides business
Pinto Valley 2.48 2.00 2.63 2.16
Cozamin 1.40 0.99 1.24 0.96
Mantos Blancos 1.82 — 2.16 —
Total sulphides 2.07 1.72 2.20 1.81
Cathode business
Mantos Blancos 2.69 — 3.41 —
Mantoverde 3.65 — 3.63 —
Total cathodes 3.37 — 3.58 —
Consolidated 2.50 1.72 2.63 1.81
2 Mantoverde production shown on a 100% basis.
Consolidated Production
Q4 2022 copper production of 45.5 thousand tonnes was higher than Q4 2021 primarily as a result of including
production for the Mantos Blancos and Mantoverde mines.
2022 consolidated production of 158.8 thousand tonnes of copper is higher than the 84.9 thousand tonnes in
2021, primarily as a result of the addition of Mantos Blancos and Mantoverde production. Consolidated
production for the nine month period from April 1, 2022 to December 31, 2022 of 136.3 thousand tonnes was
within the guidance range.
Q4 2022 C1 cash costs 1 of $2.50/lb and 2022 C1 cash costs 1 of $2.63/lb are a mix of sulphide and cathode
business units compared to 2021 which was predominately sulphide production. Consolidated C1 cash costs1
are within the guidance range of $ 2.55 to $2.70 per pound payable copper.
1 These are alternative performance measures. Refer to the section entitled “Alternative Performance Measures” in the Cautionary Notes 5
Cathode production is from copper oxide ore that requires sulphuric acid leaching, solvent extraction and
electrowinning (SX -EW) to produce copper cathodes which are a finished copper product for t he market.
Average sulphuric acid prices of $271 per tonne for the Company's cathode business unit in 2022 represented
an historic high, and thus negatively impacted cash costs. Sulphide production requires a mill that utilizes a
grinding and flotation pro cess to recover sulphide minerals in a copper concentrate saleable as an
intermediate product to smelters and refiners. Capstone's low-cost sulphide production is growing significantly
with the Mantoverde Development Project to be completed late in 2023.
Pinto Valley Mine
Copper production of 15.0 thousand tonnes in Q4 2022 was 11% lower than Q4 2021. Lower grades (Q4
2022 – 0.32% versus Q4 2021 - 0.37%) were offset partially by higher recoveries (Q4 2022 - 86.9% versus
Q4 2021 - 81.8%). In addition, lower throughput during the quarter (Q4 2022 - 55,222 tpd versus Q4 2021 -
58,481 tpd) was a result of down time for a mill reline and lower ore supply from the pit due to low truck
availability.
2022 production was 6% lower than th e same period last year primarily attributed to lower grades (2022 –
0.33% versus 2021 – 0.35%) and lower mill throughput (51,088 tpd in 2022 versus in 53,700 tpd 2021),
partially offset by higher recoveries (2022 - 86.5% versus 2021 - 85.7%).
Q4 2022 C1 cash costs1 of $2.48/lb in Q4 2022 were higher than Q4 2021 of $2.00/lb primarily due to lower
production ($0.26/lb), increases in operating costs due to inflation ($0.23/lb) and treatment and refining costs
($0.05/lb), partially offset by higher capitalized stripping costs (-$0.12/lb).
2022 C1 cash costs 1 of $2.63/lb were $0.47/lb higher compared to the same period last year of $2.16/lb
primarily due to increased operating costs due to inflationary pressures on diesel, power, explosives, grinding
media; and higher spend on rental equipment, mining equipment tools, contractors and dust suppression
($0.29/lb), lower production ($0.14/lb) and an increase in treatment and refining costs ($0.10/lb), partially offset
by higher capitalized stripping costs (-$0.07/lb).
PV4 Study
During Q4 2022, work progressed on the feasibility study ("FS") for PV4 which aims to maximize the
conversion of approximately one billion tonnes of mineral resources to mineral reserves, significantly
extending Pinto Valley’s mine life and increasing the mine’s copper production profile. The PV4 study is
focused on an expansion of existing mill throughput and tailings impoundment facility, improvements to the
metal recovery processes, and an extension of the life of mine. It is expected to be released in H1 2023 and
considers the following process enhancements:
• A new tailings dam, TSF5, that would improve tailings water recovery while accommodating a longer
mine life.
1 These are alternative performance measures. Refer to the section entitled “Alternative Performance Measures” in the Cautionary Notes 6
• Pyrite leach enhancement, with strong positive environmental, social and governance (" ESG")
implications as it would divert acid-generating minerals including pyrite and chalcopyrite from tailings
to the dump leach operation. Additional copper recovery and lower costs via the generation of acid
would be key economic drivers for this project.
• Ball mill circuit upgrades, including ball mill shell replacements, motor upgrades, cyclone feed pump
and cluster upgrades, and process control upgrades.
• Flotation circuit upgrades, including froth cameras on primary rougher banks, variable -speed drives
on key slurry pumps, and potentially additional flotation capacity.
• Plant upgrades, including additional flotation capacity and process control in the molybdenum plant.
Cozamin Mine
Q4 2022 copper production of 5.8 thousand tonnes was lower than the same period prior year mainly on lower
mill throughput (3,430 tpd in Q4 2022 versus 3,863 tpd in Q4 2021) as a result of lower ore mined due to the
implementation of a new mining method (cut-and-fill) and ground support improvement project in late Q4 2022.
Q4 2022 recoveries and grades were consistent with Q4 2021.
2022 production was slightly higher than 2021 full year due to higher throughput as a result of upgrades to the
mill in Q1 2022 (3,803 in 2022 versus 3,724 in 2021), slightly high er grades (2022 – 1.87% versus 2021 –
1.86%) and recoveries.
Q4 2022 C1 cash costs 1 were 41% higher than the same period last year mainly due to a decrease in by -
product credits ($0.17/lb) as a result of lower zinc production as well as lower silver prod uction and prices,
inflationary price increases on the main consumables ($0.13/lb) and lower copper production ($0.13/lb).
2022 C1 cash costs 1 were 29% higher than the same period last year primarily due to inflationary price
increases in steel (grinding media), explosives and insurance premiums, planned higher spend on mechanical
parts to increase equipment availability and reliability ($0.13/lb), lower zinc by-product credits due to planned
lower zinc production, as well as lower silver prices ($0.13/lb)
The paste backfill and dry stack tailings project remains on target and will facilitate the mine's planned long -
term sustainability with project completion expected in Q1 2023 and ramp-up in the first half of 2023. Inception-
to-date, we have invested $52 million of a total $55 million budget for the project.
Mantos Blancos Mine
Sulphide and cathode copper production in Q4 2022 was 14.2 thousand tonnes. Q4 2022 throughput of 15,246
tpd was 6% higher than the previous quarter due to MB-CDP ramping up during the quarter and a higher mill
feed grade of 0.94% versus 0.92% in Q3. 2022 copper production was 41.2 thousand tonnes.
Combined Q4 2022 C1 cash costs1 were $2.09/lb ($1.82/lb sulphides and $2.69/lb cathodes).
1 These are alternative performance measures. Refer to the section entitled “Alternative Performance Measures” in the Cautionary Notes 7
Combined 2022 C1 cash costs1 were $2.54/lb ($2.16/lb sulphides and $3.41/lb cathodes). The cathode costs
were significantly impacted by high sulphuric acid prices of average $271/tonne in 2022.
Mantoverde Mine
Q4 2022 copper production was 10.5 thousand tonnes.
2022 production was 36.3 thousand tonnes. Heap operation grade was 0.45% and recoveries 77.2%. Dump
operations grade was 0.16% and recoveries 39.8%.
Q4 2022 C1 cash costs 1 were $3.65/lb, which were impacted by high sulphuric acid prices, averaging
$271/tonne for 2022. More recently, sulphuric acid prices have significantly decreased with contract prices in
the $130/tonne to $150/tonne range for 2023.
2022 C1 cash costs1 were $3.63/lb, at the lower end of guidance range.
Mantoverde Development Project
Construction of the MVDP located at the existing Mantoverde (oxide) operation continues to progress well.
The MVDP is expected to enable the mine to process 235 million tonnes of copper sulphide reserves over a
20-year expected mine life, in addition to existing oxide reserves. The MVDP involves the addition of a sulphide
concentrator (12.3 million tonnes per year) and tailings storage facility, and the expansion of the existing
desalination plant.
Upon completion, the Company expects the MVDP to increase production from approximately 36,000 to
40,000 tonnes of copper (cathodes only) in our current guidance for 2023 to ~110,000 to 120,000 tonnes of
copper (copper concentrate and cathodes) post project completion. In parallel, C1 cash costs 1 are expected
to decrease from $3.50/lb to $3.70/lb in the current guidance for 2023 to below $2.00/lb after project
completion and ramp up. The decline in expected costs will be driven by the mine's transition to becoming a
primary producer of copper concentrate. Upon completion of the MVDP, approximately 75% of Mantoverde's
production will come from the lower -cost sulphide copper. The mine will also benefit from the production of
approximately 31,000 ounces of gold per year that will generate by-product credits.
MVDP is progressing under a lump-sum turn-key engineering, procurement, and construction (EPC) contract
with Ausenco Limited, a multi-national EPC management company, with broad international experience in the
design and construction of copper concentrator projects of this scale in the international market. The execution
plan includes a Capstone Copper owner’s team working with the contractors during the execution phase.
The Mantoverde Development Project is progressing well and remains on track for commissioning and feeding
first ore to the mill in late 2023. Areas of focus in Q4 2022 were:
1 These are alternative performance measures. Refer to the section entitled “Alternative Performance Measures” in the Cautionary Notes 8
• Assembly and commissioning of the second electric rope shovel with commissioning of a third shovel
planned for mid-Q1 2023;
• Critical equipment such as the SAG and ball mill shells, flotation cells, conveyor belts, components,
and others, are already arrived at site; and
• Structural and mechanical assembly in the primary crusher, grinding, flotation, and tailings thickener
area are in progress as planned.
As of December 31, 2022, the cost of the different components of the project, including the lump-sum turnkey
EPC, continue on track and on target. The total project capital remains at $825 million and inception -to-date
project spend, excluding finance costs, totals $579 million.
The majority of the total project capital cost of $825 million is fully encompassed by the turn-key contract with
Ausenco. The EPC contract total budget is approximately $525 million of which $359 million has been spent
as of December 31, 2022. In addition, major mining equipment for approximately $140 million was price fixed
prior to the elevated inflationary pressures observed this year.
A virtual tour of the project can be viewed at https://vrify.com/decks/12698-mantoverde-
development-project
Mantoverde Phase II
Mantoverde is currently analyzing the next expansion of the sulphide concentrator. Capstone has identified
that the major components of the comminution and flotation circuits of the Mantoverde Development Project
are capable of throughput capacities higher than the 32,000 tonnes per day design, and an engineering study
is being initiated to identify the upstream and downstream debottlenecking costs associated with the potential
increase in nameplate capacity. Given the above, the Mantoverde Phase II study will now evaluate the addition
of an entire second processing line, p ossibly a duplication of the first line, to process some of the additional
77% of resources not utilized by the optimized MVDP. A conceptual study is being prepared in Q1 2023 and
pending positive results will be incorporated into a feasibility study targeted for H2 2023.
Mantos Blancos Concentrator Debottlenecking Project
The MB-CDP was completed in 2022 which increased throughput capacity at the sulphide concentrator plant
from 11,000 tonnes per day ("tpd') to 20,000 tpd (or from 4.2 million tonnes per year to 7.3 million tonnes per
year). MB-CDP completed ramp up to commercial production in December.
Mantos Blancos Phase II
Mantos Blancos is currently evaluating the potential to increase throughput of the Mantos Blancos sulphide
concentrator plant from 7.3 million tonnes per year to 10.0 million tonnes per year using existing underutilized
ball mills and process equipment. As part of the Mantos Blancos Phase II Project, we are also evaluating the