Capstone Copper Reports Third Quarter 2024 Results
NEWS RELEASE
TSX:CS ● ASX:CSC ● capstonecopper.com
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1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”.
October 31, 2024
Capstone Copper Reports Third Quarter 2024 Results
All amounts in US$ unless otherwise indicated
Vancouver, British Columbia – Capstone Copper Corp. (“Capstone” or the “Company”) (TSX: CS) (ASX:
CSC) today reported financial results for the nine months and quarter ended September 30, 2024 (“Q3 2024”).
Copper production in Q3 2024 totaled 47,460 tonnes at C1 cash costs1 of $2.83 per payable pound of copper
produced. Link HERE for Capstone’s Q3 2024 webcast presentation.
John MacKenzie, CEO of Capstone, commented, "The third quarter marked an important step in the
transformation of our business, with tangible delivery on our peer leading growth. Our operations in Chile
exhibited meaningful milestones at both our flagship Mantoverde Development Project (where we achieved
commercial production) and at Mantos Blancos (which has now demonstrated that it is capable of delivering
its nameplate capacity). We expect Q4 to be our strongest quarter of the year, providing a glimpse of the future
Capstone with a larger production base and lower unit operating costs. During the past few months, we also
released studies for our Mantoverde Optimized and Santo Domingo projects, and announced a leadership
succession plan, all of which have positioned us extremely well for our next phase of growth."
Q3 2024 OPERATIONAL AND FINANCIAL HIGHLIGHTS
• The Mantoverde Development Project ("MVDP") achieved commercial production in
September, as the mine advances commissioning and continues to ramp up to full production levels.
The first two shipments of copper concentrates were made during the quarter and met all required
specifications. Project capital for the MVDP came in line with the revised budget at $870 million.
• Consolidated copper production for Q3 2024 was 47,460 tonnes at C1 cash costs1 of $2.83/lb.
Consolidated copper production consisted of 17,481 tonnes at Mantoverde, 13,980 tonnes at Pinto
Valley, 9,974 tonnes at Mantos Blancos, and 6,025 tonnes at Cozamin. Total Q3 2024 copper sold of
44,684 payable tonnes was approximately 1,500 tonnes below payable production, largely driven by
the initial build up of copper concentrates inventory at Mantoverde during the MVDP ramp-up.
• N et income attributable to shareholders of $12.5 million, or $0.02 per share for Q3 2024
compared to net loss attributable to shareholders of $32.9 million, or $(0.05) per share for Q3 2023,
primarily due to the higher copper production and higher realized copper price of $4.24/lb compared
to $3.77/lb.
• Adjusted net income attributable to shareholders 1 of $25.4 million, or $0.03 per share for Q3
2024, compared to adjusted net loss attributable to shareholders1 of $15.8 million in Q3 2023.
• Adjusted EBITDA1 nearly doubled to $120.8 million for Q3 2024 compared to $62.8 million for
Q3 2023. The increase in Adjusted EBITDA 1 is primarily driven by a higher copper production and
realized copper price.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 2
• Operating cash flow before changes in working capital of $116.9 million in Q3 2024 compared
to $59.2 million in Q3 2023.
• Net debt1 of $750.7 million as at September 30, 2024 was largely unchanged compared to net debt
of $741.3 million as at June 30, 2024 with the majority of the MVDP capital spend complete. Total
available liquidity1 of $515.6 million as at September 30, 2024, comprising $138.6 million of cash
and short-term investments, and $377.0 million of undrawn amounts on the corporate revolving credit
facility.
• The Company notes that 2024 consolidated production is expected to finish at the low end of
the guidance range of 190,000 to 220,000 tonnes of copper. 2024 consolidated C1 cash costs 1
guidance has been revised to $2.60/lb to $2.80/lb mainly due to the ramp-ups at Mantoverde and
Mantos Blancos occurring later in the year than was expected when guidance was issued in January
2024.
• Capstone released a Feasibility Study on the next stage of growth for the Santo Domingo
copper-iron-gold project that includes a strong $1.72 billion after-tax net present value and a 24.1%
internal rate of return, with an initial capital cost of $2.3 billion. Over the first seven years of the mine
plan, production is expected to average 106,000 tonnes of copper and 3.7 million tonnes of iron
concentrate at first quartile C1 cash costs1 of $0.28 per payable pound of copper produced.
• Capstone acquired 100% of Sierra Norte , located 15 km from Santo Domingo, for $40 million in
shares. This acquisition provides a potential future sulphide feed source to extend the higher -grade
copper sulphide life at Santo Domingo.
• Subsequent to quarter-end, the Company announced the results of a F easibility Study for its
Mantoverde Optimized brownfield expansion project. Mantoverde Optimized is a capital efficient
expansion of the existing sulphide concentrator from throughput of 32,000 to 45,000 ore tpd. The study
increased sulphide reserves from 236 million at 0.60% copper to 398 million tonnes at 0.49% copper
and 0.10 g/t gold which extended the mine life to 25 years. MV Optimized is a high return and low risk
expansion project that is expected to bring on an additional 20,000 tonnes per annum of copper for
approximately $146 million of initial expansionary capital.
• Subsequent to quarter-end, the Company announced its leadership succession plan . At the next
Annual General Meeting on May 2, 2025, John MacKenzie will transition from CEO and be nominated
to the role of Non- Executive Chair of the Board, with Cashel Meagher succeeding him as CEO and
also to be nominated as a member of the Board, while James Whittaker will become COO. Founder
of Capstone Mining and current Chair of Capstone, Darren Pylot, will step down from the Board after
more than 20 years of combined service to the Company.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 3
OPERATIONAL OVERVIEW
Ref
er to Capstone's Q3 2024 MD&A and Financial Statements for detailed operating results.
Q3 2024 Q3 2023 2024 YTD 2023 YTD
Copper production (tonnes)
Sulphide business
Pinto Valley 13,980 13,657 45,646 39,157
Cozamin 6,025 5,876 18,183 17,776
Mantos Blancos 8,246 9,138 25,579 28,338
Mantoverde 8,139 — 8,197 —
Total sulphides 36,390 28,671 97,605 85,271
Cathode business
Mantos Blancos 1,728 2,997 5,432 9,597
Mant
overde2 9,342 8,582 27,481 25,382
Total cathodes 11,070 11,579 32,913 34,979
Consolidated 47,460 40,250 130,518 120,250
Copper sales
44,684 38,699 125,428 116,910 Copper sold (tonnes)
Realized copper price1 ($/pound) 4.24 3.77 4.20 3.87
C1 cash costs1 ($/pound) produced
Sulphides business
Pinto Valley 2.92 2.83 2.63 2.96
Cozamin 1.82 1.85 1.83 1.73
Mantos Blancos 3.40 2.85 3.26 2.80
Mantoverde 2.52 — 2. 52 —
Total sulphides 2.76 2.63 2.64 2.65
Cathode business
Mantos Blancos 3.44 2.75 3.33 3.07
Mantoverde 2.78 3.74 3.28 3.89
Total cathodes 3.07 3.48 3.47 3.67
Consolidated 2.83 2.88 2.85 2.96
2 Mantoverde production shown on a 100% basis.
Consolidated Production
Q3
2024 copper production of 47,460 tonnes was 18% higher than Q3 2023 primarily as a result of sulphide
production starting at Mantoverde. MVDP continues to ramp-up towards full production levels and at various
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 4
points during Q3 2024, mine operations, crushing, grinding, flotation and tailings, all operated at or above
design capacity.
Q3 2024 C1 cash costs1 of $2.83/lb were 2% lower than $2.88/lb Q3 2023 mainly due to higher production (-
$0.19/lb), partially offset by lower capitalized stripping costs ($0.13/lb).
Pinto Valley Mine
Copper production of 14.0 thousand tonnes in Q3 2024 was 2% higher than in Q3 2023 due to higher grades
(Q3 2024 – 0.37% versus Q3 2023 - 0.34%) as a result of mining in a higher-grade area of Castle Dome and
a high grade area of Jewel Hill, partially offset by lower mill throughput during the quarter (Q3 2024 - 44,915
tpd versus Q3 2023 - 47,426 tpd), resulting from an unplanned 10 days of downtime during the quarter related
to a conveyor belt rip and electrical faults.
C1 cash costs1 of $2.92/lb in Q3 2024 were 3% higher than Q3 2023 of $2.83/lb primarily due to increases in
operating costs ($0.15/lb) driven by contractor and mechanical parts spend in the mill, electricity cost, labor
cost, lower by -product credits ($0.12/lb) and higher treatment costs ($0.06/lb), partially offset by higher
production volume (-$0.07/lb) and capitalized stripping (-$0.17/lb).
Mantos Blancos Mine
Q3 2024 production was 10.0 thousand tonnes, composed of 8.2 thousand tonnes from sulphide operations
and 1.7 thousand tonnes of cathode from oxide operations, which was 18% lower than the 12.2 thousand
tonnes produced in Q3 2023. Sulphide production declined in Q3 2024 due to lower grades, partially offset by
higher recoveries. Lower cathode production was impacted by lower dump grades and throughput.
In July, a successful two -week planned shutdown was completed which included the installation of a new
holding tank and additional pumps in the tailings area in order to address deficiencies identified preventing
the sustained achievement of the 20ktpd capacity from the sulphide operations. Following the plant ramp-up
period in August, ore throughput averaged 18,062 tpd through to the end of Q3, with plant throughput meeting
or exceeding the nameplate capacity of 20,000 tpd on 23 operating days. The overall variability of the milling
process has been significantly reduced and higher throughput is expected in Q4.
Combined Q3 2024 C1 cash costs1 of $3.41/lb ($3.40/lb sulphides and $3.44/lb cathodes) were 21% higher
compared to combined C1 cash costs1 of $2.82/lb in Q3 2023, mainly due to lower production ($0.63/lb) and
increase in mine expense ($0.12/lb) partially offset by lower acid and energy consumption due to lower
production (-$0.16/lb).
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 5
Mantoverde Mine
The Company achieved commercial production at MVDP in September 2024. In making this determination,
management considered a number of factors, including completion of substantially all the construction
development activities in accordance with design and a production ramp -up period during which mill
throughput, in terms of tonnes of ore, equalled an average of 75% of nameplate capacity over a 30-day period.
With this achievement, on September 30, 2024 substantially all of Construction-in-Progress was reclassified
to Plant & Equipment. Depletion and amortization will commence on October 1, 2024.
Q3 2024 copper production of 17.5 thousand tonnes, composed of 8.1 thousand tonnes of copper from
sulphide operations and 9.3 thousand tonnes of cathode, was 104% higher compared to 8.6 thousand tonnes
in Q3 2023. Heap production increased in Q3 2024 given higher grades (0.36% in Q3 2024 versus 0.32% in
Q3 2023) and recoveries (76.1% in Q3 2024 versus 66.5% in Q3 2023). The new concentrator (MVDP)
continued its ramp-up in Q3, resulting in 8.1 thousand tonnes of copper production from sulphide operations,
driven by average mill throughput of 18.4 ktpd, copper grades of 0.71%, and recoveries of 68.2%. The quarter
included an approximate two- week shutdown in August driven by the achievement of Facility Practical
Completion and the average mill throughput in September was 26,200 tpd. While physical recoveries in Q3
were 68.2%, this includes gain/(draw) on inventory, sampling error, and analytical error. The implied
metallurgical recovery, determined based on assays measured on the feed, concentrate and tailings samples
obtained with the slurry samplers, indicate overall metallurgical recoveries for the quarter of 78.2%, with
implied recoveries above 80% observed in August and September.
Q3 2024 C1 cash costs 1 were $2.78/lb, 26% lower than $3.74/lb in Q3 2023 due to higher production ( -
$1.21/lb), lower energy prices ( -$0.16/lb) which averaged $0.10/kWh in Q3 2024 versus $0.17/kWh in Q3
2023, and lower acid consumption ( -$0.11/lb), partially offset by an increase in contracted services, spare
parts and labour cost mainly driven by higher mine movement ($0.52/lb).
Cozamin Mine
Q3 2024 copper production of 6.0 thousand tonnes was 2% higher than the same period prior year, mainly on
higher mill throughput (3,609 tpd in Q3 2024 versus 3,567 tpd in Q3 2023) driven by mine sequence. Grades
and recoveries were consistent quarter over quarter.
Q3 2024 C1 cash costs 1 were $1.82/lb, 2% lower than $1.85/lb in the same period last year, mainly due to
higher production in Q3 2024 than the same period last year on higher grades, higher silver by-product volume
and price (40%), offset by higher operating costs (9%) mainly on contractors due to change in mine method
and manpower for bonus profit sharing effect.
Mantoverde Development Project
MVDP achieved commercial production in September, and the mill continues to advance commissioning and
ramp up to full production levels. MVDP involved the addition of a sulphide concentrator (nominal 32,000 ore
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 6
tonnes per day ("tpd")) and tailings storage facility, and the expansion of the existing desalination plant and
other minor infrastructure.
In 2024, Capstone has been focused on a safe, efficient and phased project commissioning and ramp-up. All
key milestones have been achieved during the commissioning and ramp-up including:
• First ore to the primary crusher – completed in Q4 2023
• First ore to the grinding circuit – completed in Q1 2024
• First saleable concentrate – completed in Q2 2024
• Achievement of nameplate operating rates and Facility Practical Completion – completed in Q3 2024
• First two shipments of copper concentrates - delivered in Q3 2024
During Q3, MVDP achieved Facility Practical Completion with Ausenco which was followed by a planned two-
week shutdown for vendor maintenance and project handover in August. On September 21, 2024, the MVDP
achieved commercial production defined as the achievement of reaching a minimum of 30 consecutive days
of operations during which the mill operated at an average of 75% of nameplate throughput of 32,000 ore
tonnes per day. The average mill throughput for September was 26,200 tpd, which included an exit rate with
the last 7 days averaging 32,400 tpd.
During Q4, the goal is to continue to improve runtime, overall average throughput, and recoveries.
The MVDP project capital spent was $870 million since inception and came in line with the revised budget,
which was reclassified to available for use property, plant and equipment at September 30, 2024 upon
achieving the commercial production milestone.
As MVDP has achieved commercial production, we expect our quarterly finance expense to increase by
approximately $25 million beginning in the fourth quarter of 2024 as the capitalization of finance charges
relating to MVDP will cease. Similarly, we expect our annualized depletion and amortization to increase by
approximately $80 million.
MV Optimized Feasibility Study
The Company announced its Mantoverde Optimized ("MV -O") Feasibility Study ("FS") on October 1, 2024.
The project is a capital-efficient expansion of Mantoverde's sulphide concentrator, increasing throughput from
32,000 to 45,000 ore tpd and extending the mine life to 25 years. With an updated sulphide Mineral Reserve
of 398 million tonnes at a copper grade of 0.49% (compared to 236 million tonnes at 0.60% copper previously),
the project will yield an additional 368,000 tonnes of copper and 215,000 ounces of gold, with an initial
expansionary capital investment of $146 million and an implied capital intensity of approximately $7,500 per
tonne of incremental annual copper equivalent production. The Feasibility Study includes average annual
production over the next five years of 135,000 tonnes of copper and 37,000 ounces of gold at C1 cash costs1
of $1.81 per pound of copper. Capstone anticipates starting construction after receiving environmental permit
approval, expected in H1 2025. The MV -O FS also features a robust after-tax NPV(8%) of $2.9 billion for
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 7
Mantoverde operation on a 100% -basis based on a long- term copper price of $4.10/lb and gold price of
$1,800/oz.
Given the above, the Mantoverde Phase II opportunity will evaluate the addition of an entire second processing
line, possibly a duplication of the first line, to process some of the approximately 0.2 billion tonnes of Measured
& Indicated and 0.6 billion tonnes of Inferred sulphide resources not in reserves.
Santo Domingo Feasibility Study & Sierra Norte Acquisition
Capstone announced the results of an updated Feasibility Study for its 100%-owned Santo Domingo copper-
iron-gold project in Region III Chile, 35km northeast of Mantoverde on July 31, 2024. The updated FS outlines
the next phase of transformational growth for the Company in the world- class Mantoverde-Santo Domingo
District. Santo Domingo completed the updated FS with Ausenco.
The 2024 FS for Santo Domingo outlines a robust copper-iron-gold project with an after-tax NPV (8%) of $1.7
billion and an after-tax internal rate of return of 24.1%. Total initial capital cost of $2.3 billion drives a capital
intensity of approximately $21,900 per tonne of annual copper equivalent production over the life of mine.
Over the first seven years of the mine plan, production is expected to average 106,000 tonnes of copper and
3.7 million tonnes of iron ore magnetite at first quartile cash costs of $0.28 per payable pound of copper
produced. Over Santo Domingo's 19- year mine life, production is expected to average 68,000 tonnes of
copper and 3.6 million tonnes of iron ore magnetite at first quartile cash costs of $0.33 per payable pound of
copper produced.
The 19-year Santo Domingo mine life is supported by an increased Mineral Reserve estimate of 436 million
tonnes (compared to 392 million tonnes previously) at a copper grade of 0.33%, iron ore grade of 26.5%, and
a gold grade of 0.05 grams per tonne. Increased Measured and Indicated (“M&I”) Mineral Resources total 547
million tonnes (compared to 537 million tonnes previously) at a copper grade of 0.31% and a gold grade of
0.04 grams per tonne, including 506 million tonnes with an iron grade of 25.8%.
The feasibility study updated the level of engineering to Association for the Advancement of Cost Engineering
("AACE") Class 3. Further detailed engineering will increase the precision of capital estimates to AACE Class
2 over the next couple of quarters.
During the quarter, Capstone acquired 100% of the shares of Compania Minera Sierra Norte, S.A. ("Sierra
Norte") for $40 million in share consideration. Sierra Norte is located approximately 15 kilometers northwest
of the Santo Domingo Project and represents an opportunity to potentially be a future sulphide feed source
for Santo Domingo, extending the higher grade copper sulphide life.
The Company plans to progress several value enhancement initiatives within the Mantoverde-Santo Domingo
(“MV-SD”) district that are not incorporated in the Santo Domingo 2024 Feasibility Study, or the recently
announced base case MV Optimized plan.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 8
Copper Oxides Opportunity
Capstone plans to progress drilling and studies regarding the processing of oxide material from Capstone’s
neighbouring Santo Domingo and Sierra Norte projects by capitalizing on Mantoverde’s excess SX/EW
capacity to extract copper from Santo Domingo’s oxide material. To date, oxide materials have been
recognized in the shallower portions of the Santo Domingo, Iris Norte, and Estrellita sulphide ore bodies.
Currently, these oxides are considered as waste material in the recently announced Santo Domingo 2024
Feasibility Study. Meanwhile, only approximately two thirds of processing capacity is being used at
Mantoverde’s SX-EW cathode copper plant. Exploration efforts at Santo Domingo will target a potential 80-
100 million tonnes of oxide material, which could add up to 10 thousand tonnes per annum of copper
production.
Exploration Opportunities in the MV-SD District
Capstone has significant untapped exploration potential within MV -SD district. The Mantoverde Optimized
plan was prepared without any expansionary drilling campaign since 2019. At Mantoverde, there are 0.2 billion
tonnes of Measured & Indicated and 0.6 billion tonnes of Inferred sulphide resources not in reserves. At Santo
Domingo, there are 0.1 billion tonnes of Measured & Indicated and 0.2 billion tonnes of Inferred sulphide
resources not in reserves. The recently acquired Sierra Norte property also represents an opportunity to
potentially be a future feed source in the district. Capstone intends to progress its exploration strategy to
service its two eventual processing centers between Mantoverde and Santo Domingo, in addition to continuing
to evaluate the potential for Mantoverde Phase II which could include the addition of an entire second
processing line at Mantoverde.
Mantoverde - Santo Domingo Cobalt Study
A district cobalt plant for the MV-SD district is designed to unlock cobalt production while reducing sulphuric
acid consumption and increasing heap leach copper production. The cobalt recovery process comprises a
pyrite flotation step to recover cobaltiferous pyrite from the tailings streams at Mantoverde and Santo Domingo
and redirect it to the dynamic heap leach pads, which will be upgraded to a bioleach configuration through the
addition of an aeration system as part of MV Optimized. The pyrite oxidizes in the leach pads and the
solubilized cobalt is recovered via an ion exchange plant treating a bleed stream from the copper solvent
extraction plant. The approach has been successfully demonstrated at the bench scale, and onsite piloting
commenced in January 2024 at Mantoverde.
As currently envisioned, a smaller capacity countercurrent ion- exchange plant will initially treat cobalt by -
product streams from Mantoverde producing up to 1,500 tonnes per annum of cobalt, and following
sanctioning of the Santo Domingo project, the facility will be expanded to accommodate by -product streams
from Santo Domingo. In line with this, Santo Domingo has initiated a Feasibility Study to assess the optimum
process configuration for the pyrite flotation and pumping transportation facilities needed to transport pyrite
concentrate to Mantoverde’s leach facilities. This information will be part of the MV-SD cobalt study expected
in 2025.