Capstone Copper Reports Second Quarter 2024 Results
1
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”.
August 1, 2024
Capstone Copper Reports Second 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 six months and quarter ended June 30, 2024 (“Q2 2024”).
Copper production in Q2 2024 totaled 40,937 tonnes at C1 cash costs 1 of $2.84 per payable pound of
copper produced. Link HERE for Capstone’s Q2 2024 webcast presentation.
John MacKenzie, CEO of Capstone, commented, "We had another solid quarter in Q2 as we executed on
our operating plans and delivered strong financial results. At our Mantoverde Development Project, we are
making excellent progress ramping up to nameplate production levels, which will be transformational to our
results moving forward. Yesterday we released an updated feasibility study for our fully -permitted Santo
Domingo project, which sits 35km northeast of Mantoverde, and represents the next major phase in our plan
to create a world class district in the Atacama region of Chile. With the updated study in hand, we now plan
to progress financing and partnership discussions at Santo Domingo, while advancing work on the detailed
engineering."
Q2 2024 OPERATIONAL AND FINANCIAL HIGHLIGHTS
• Consolidated H1 2024 copper production of 83,058 tonnes achieved guidance of 80,000 to
90,000 tonnes. Consolidated copper production for Q2 2024 was 40,937 tonnes at C1 cash
costs1 of $2.84/lb , which consisted of 15,994 tonnes at Pinto Valley, 10,070 tonnes at Mantos
Blancos, 8,721 tonnes at Mantoverde, and 6,152 tonnes at Cozamin.
• N et income attributable to shareholders of $29.3 million, or $0.04 per share for Q2 2024
compared to net loss attributable to shareholders of $36.5 million, or $(0.05) per share for Q2 2023,
primarily due to the higher realized copper price of $4.54/lb compared to $3.76/lb (prior to unrealized
provisional pricing adjustments) and the inclusion of a $53.9 million provision related to the Minto
obligation in Q2 2023.
• Adjusted net income attributable to shareholders 1 of $20.9 million, or $0.03 per share for Q2
2024, adjusted net loss attributable to shareholders 1 of $12.2 million in Q2 2023, primarily due to a
higher realized copper price.
• Adjusted EBITDA 1 of $123.1 million for Q2 2024 compared to $43.4 million for Q2 2023. The
increase in Adjusted EBITDA 1 is primarily driven by a higher realized copper price of $4.54/lb
compared to $3.76/lb (prior to unrealized provisional pricing adjustments).
• Operating cash flow before changes in working capital of $102.9 million in Q2 2024 compared
to $22.0 million in Q2 2023.
• Net debt1 of $741.3 million as at June 30, 2024 was largely unchanged compared to net debt of
$740.2 million as at March 31, 2024. Total available liquidity 1 of $538.7 million as at June 30, 2024,
comprised of $138.7 million of cash and short -term investments, and $400.0 million of undrawn
amounts on the corporate revolving credit facility.
• First saleable copper concentrate was produced at the Mantoverde Development Project
("MVDP") in June, as the mine advances commissioning and continues ramp up to full production
levels. Achievement of nameplate operating rates is expected within the third quarter. Total capital for
the MVDP remains unchanged at $870 million.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 2
• The Company reiterates 2024 guidance of 190,000 to 220,000 tonnes of copper at C1 cash
costs of $2.30/lb to $2.50/lb. Copper production is trending toward the lower end of the range,
while cash costs are trending toward the higher end.
• Subsequent to quarter -end, the Company announced the results of an updated Feasibility Study
for its Santo Domingo development project in Chile. The updated Feasibility Study outlines a
$2.3 billion initial capital project with an after- tax NPV(8%) of $1.7 billion that represents the next
phase of transformational growth in our world-class Mantoverde-Santo Domingo District.
• In July 2024, the Company entered into a binding share purchase agreement with Inversiones
Alxar S.A. and Empress COPEX S.A. to acquire 100% of the shares of Compania Minera
Sierra Norte, S.A. for $40 million which is payable in shares.
OPERATIONAL OVERVIEW
Refer to Capstone's Q2 2024 MD&A and Financial Statements for detailed operating results.
Q2 2024 Q2 2023 2024 YTD 2023 YTD
Copper production (tonnes)
Sulphide business
Pinto Valley 15,994 12,632 31,666 25,532
Cozamin 6,152 6,661 12,158 11,861
Mantos Blancos 8,170 8,405 17,333 19,205
Mantoverde2 58 — 58 —
Total sulphides 30,374 27,698 61,215 56,598
Cathode business
Mantos Blancos 1,900 3,267 3,704 6,567
Mantoverde2 8,663 8,322 18,139 16,822
Total cathodes 10,563 11,589 21,843 23,389
Consolidated 40,937 39,287 83,058 79,987
Copper sales
Copper sold (000s tonnes) 39,748 40,755 80,744 78,211
Realized copper price1 ($/pound) 4.53 3.71 4.18 3.93
C1 cash costs1 ($/pound) produced
Sulphides business
Pinto Valley 2.46 2.98 2.50 3.03
Cozamin 1.74 1.63 1.83 1.67
Mantos Blancos 3.43 3.18 3.18 2.77
Total sulphides 2.58 2.72 2.57 2.66
Cathode business
Mantos Blancos 3.15 3.08 3.32 3.22
Mantoverde 3.68 3.92 3.75 3.97
Total cathodes 3.58 3.68 3.67 3.76
Consolidated 2.84 3.01 2.87 2.99
2 Mantoverde production shown on a 100% basis.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 3
Consolidated Production
Q2 2024 copper production of 40,937 tonnes was 4% higher than Q2 2023 primarily as a result of higher
production at Pinto Valley.
Q2 2024 C1 cash costs1 of $2.84/lb were 6% lower than $3.01/lb Q2 2023 mainly due to higher production (-
$0.09/lb) and lower operational costs (-$0.14/lb).
Pinto Valley Mine
Copper production of 16.0 thousand tonnes in Q2 2024 was 27% higher than in Q2 2023 due to higher mill
throughput during the quarter (Q2 2024 - 55,420 tpd versus Q2 2023 - 44,336 tpd), due to a reduction in
mechanical downtime, and higher grades (Q2 2024 – 0.36% versus Q2 2023 - 0.34%) due to mining in the
higher-grade Castle Dome area of the mine. Recoveries were consistent quarter over quarter.
C1 cash costs 1 of $2.46/lb in Q2 2024 were 17% lower than Q2 2023 of $2.98/lb primarily due to higher
production volume ( -$0.57/lb) and capitalized stripping ( -$0.13/lb), partially offset by increases in operating
costs driven by higher production, related to contractor spend, electricity cost, ball mill liner cost, explosive
cost and mechanical parts, stockpile drawdown and higher treatment costs.
Mantos Blancos Mine
Q2 2024 production was 10.1 thousand tonnes, composed of 8.2 thousand tonnes from sulphide operations
and 1.9 thousand tonnes of cathode from oxide operations, which was 14% lower than the 11.7 thousand
tonnes produced in Q2 2023. Sulphide production declined in Q2 2024 despite record throughput, due to
lower grades and lower recoveries as a result of a short -term localized geotechnical issue that impacted
mine sequencing. Lower production was also impacted by lower dump throughput in line with the 2024 plan.
The activities for the sulphide operations to reach 20ktpd on a sustainable basis are progressing despite an
approximate two-month delay relative to our prior plan due to longer equipment lead times. As a result, in
June, daily ore throughput averaged 17ktpd and the variability of the milling process has been significantly
reduced. During Q3 2024, the installation and commissioning of a new holding tank and additional pumps in
the tailings area, as well as other infrastructure improvements, will further enhance the throughput levels at
the concentrator plant and is expected to allow the achievement of the 20ktpd capacity consistently.
Combined Q2 2024 C1 cash costs 1 were $3.38/lb ($3.43/lb sulphides and $3.15/lb cathodes) were 7%
higher compared to combined C1 cash costs 1 of $3.15/lb in Q2 2023, mainly due to lower production
($0.51/lb), partially offset by a decrease in mine movement (-$0.17/lb) and lower acid consumption driven by
the lower dump throughput (-$0.15/lb).
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 4
Mantoverde Mine
Q2 2024 copper production of 8.7 thousand tonnes was 4% higher compared to 8.3 thousand tonnes in Q2
2023. Higher grades processed at the heap operations, related to mining sequence, were partially offset by
lower heap recoveries (71.7% in Q2 2024 versus 73.4% in Q2 2023). Moreover, the new concentrator
(MVDP) produced its first copper concentrate in June 2024.
Q2 2024 C1 cash costs 1 were $3.68/lb, 6% lower than $3.92/lb in Q2 2023 due to higher production
(-$0.19/lb), lower energy prices ( -$0.35/lb) and lower acid consumption ( -$0.23/lb), partially offset by an
increase in contracted services, spare parts spend and labour cost mainly driven by higher mine movement
($0.50/lb). Energy prices averaged $0.09/kWh in Q2 2024 versus $0.22/kWh in Q2 2023.
Cozamin Mine
Q2 2024 copper production of 6.2 thousand tonnes was 7% lower than the same period prior year, mainly on
lower mill throughput (3,551 tpd in Q2 2024 versus 3,792 tpd in Q2 2023) driven by mine sequence. Grades
and recoveries were consistent quarter over quarter.
Q2 2024 C1 cash costs1 were $1.74/lb, 7% higher than $1.63/lb in the same period last year, mainly due to
lower Cu production in Q2 2024 than last year (7%), in addition to an increase in paste back fill plant
expenses from the previous year in manpower and contractors for full operations ($0.18/lb), partially offset
by higher by-product credits due to higher silver prices (-$0.07/lb).
Mantoverde Development Project
Construction of all elements of the MVDP that were required to commence commissioning was completed
by end of year 2023. The MVDP enables the Mantoverde mine to process 236 million tonnes of copper
sulphide reserves over a 20- year expected mine life, in addition to existing oxide reserves. The MVDP
involved the addition of a sulphide concentrator (nominal 32,000 ore 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.
Key milestones during the commissioning and ramp-up include:
1. First ore to the primary crusher – completed in Q4 2023
2. First ore to the grinding circuit – completed in Q1 2024
3. First saleable concentrate – completed in Q2 2024
4. Achievement of nameplate operating rates – expected within Q3 2024
During Q2, steady progress was made commissioning the new concentrator and first saleable copper
concentrate was produced in June, as previously announced.
So far in July , we have seen continued and steady progress as the Mantoverde operation ramps up to
nameplate production levels. The focus is largely related to improving runtime, while also increasing
throughput and recoveries. We have already seen daily throughputs above the nameplate capacity, and
expect to reach sustained nameplate operating throughput rates, while exhibiting strong recoveries, within
the third quarter.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 5
As of June 30, 2024, cash capital spent on the MVDP totalled $842 million, under the project capital
estimate of $870 million.
A virtual tour of MVDP can be viewed at https://vrify.com/decks/12698-mantoverde-development-project
MV Optimized Feasibility Study and Phase II
The Company is currently preparing a technical report with respect to the next expansion of the sulphide
concentrator and the optimization of the heap leach and solvent extraction facilities. Capstone has identified
that the desalination plant capacity and major components of the comminution and flotation circuits of the
MVDP can sustain an average annual throughput of approximately 45,000 ore tpd, while copper cathode
production can be increased, and acid consumption decreased, through conversion of the dynamic heap
leach facility to a bio-leach facility. Capstone is working with Ausenco and Global Resource Engineering Ltd
on the MV Optimized Feasibility Study, including evaluating the costs and timelines of debottlenecking the
minor components of the plant to meet the potential increased throughput target. The MV Optimized
Feasibility Study is expected to be released during Q3 2024.
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 0.3 billion
tonnes of Measured & Indicated and 0.6 billion tonnes of Inferred sulphide resources not in reserves.
Santo Domingo Feasibility Study Update
On July 31, 2024, 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. The updated feasibility
study outlines the next phase of transformational growth for the Company in the world- class Mantoverde-
Santo Domingo District.
The 2024 feasibility study for Santo Domingo outlines a robust copper -iron-gold project with an after-tax net
present value at an 8% discount rate of $1.72 billion and an after -tax internal rate of return of 24.1%. 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 the Santo Domingo 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 updated Mineral Reserve estimate of 436 million
tonnes at a copper grade of 0.33%, iron ore grade of 26.5%, and a gold grade of 0.05 grams per tonne.
Updated Measured and Indicated (“M&I”) Mineral Resources total 547 million tonnes 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%.
Subsequent to the quarter -ended June 30, 2024, the Company entered into a binding share purchase
agreement (the "SPA") with Inversiones Alxar S.A. and Empress COPEX S.A., collectively the "sellers" to
acquire 100% of the shares of Compania Minera Sierra Norte, S.A. ("Sierra Norte"). 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. Under the terms of the SPA, Capstone will pay the sellers $40 million in share consideration. Closing is
expected within one-week.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 6
For more details, please refer to the Santo Domingo Feasibility Study press release announced on July 31 ,
2024.
Mantoverde - Santo Domingo Cobalt Study
A district cobalt plant for Mantoverde - Santo Domingo may allow for low -cost by-product cobalt production
while producing a by -product of sulphuric acid to be consumed internally to significantly lower operating
costs in the cathode process at Mantoverde.
The cobalt recovery process comprises a pyrite flotation step to recover cobaltiferous pyrite from the MVDP
and MSD tailings streams. The pyrite is then redirected to the dynamic heap leach pads which are upgraded
to a bio- leach configuration (as part of the MV -Optimized study). The pyrite bio- oxidizes in the leach pads
and the solubilized cobalt is recovered via an ion exchange plant that treats a bleed stream from the copper
solvent extraction plant. The approach has been successfully demonstrated at the bench and pilot scale.
Engineering has commenced for a small plant treating only Mantoverde pyrite concentrates to produce up to
1,500 tonnes per annum ("tpa") of contained cobalt. In line with this, Santo Domingo has started a parallel
study to assess, as part of the copper/iron circuit overall layout optimization being conducted by Ausenco,
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 by the end of 2024.
At a combined MV-SD target of 4.5 to 6.0 thousand tpa of mined cobalt production, this would be one of the
largest and lowest cost cobalt producers in the world, outside of Indonesia and the DRC.
PV District Growth Study
The company continues to review and evaluate the consolidation potential of the Pinto Valley district.
Opportunities under evaluation include a potential mill expansion and increased leaching capacity supported
by optimized water, heap and dump leach, and tailings infrastructure. District consolidation could unlock
significant ESG opportunities and may transform our approach to create value for all stakeholders in the
Globe-Miami District.
Environmental, Social and Governance ("ESG") Highlights
Pinto Valley has signed the Copper Mark Letter of Commitment formalizing its participation in the Copper
Mark assurance process.
The Company published its first Modern Slavery Report in May 2024.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 7
Corporate Exploration Update
Cozamin: Exploration drilling recommenced Q2 2024 at Cozamin with a $2.3M (14,800 meter) program
targeting step- outs up- dip and down- dip from the Mala Noche West Target and also down- dip of other
historical Mala Noche Vein workings. Drilling is currently being conducted with one underground rig
positioned at the level 19.1 cross -cut, with a second underground rig positioned at the level 12.7 cross -cut
and one surface rig being added to the program in Q3 2024.
Copper Cities, Arizona : On January 20, 2022, Capstone Mining announced that it had entered into an
access agreement with BHP Copper Inc. ("BHP") to conduct drill and metallurgical test -work at BHP's
Copper Cities project ("Copper Cities"), located approximately 10 km east of the Pinto Valley mine. This
access agreement was recently extended to July 2025. Drilling with two surface rigs twinning historical drill
holes was completed in 2022 with metallurgical testing continuing in 2024. As explained in the PV District
Growth Study section, district consolidation opportunities are being evaluated.
Mantoverde, Santo Domingo, and Mantos Blancos, Chile: Infill drilling was conducted during Q2 2024 in
both Mantoverde and Mantos Blancos pits. Exploration drilling is expected to start at Mantos Blancos during
Q3 2024 with a $1.4M program aiming to test Veronica oxide target and potential mineralized extension in
Nora-Quinta area.
2024 Guidance
The Company reiterates its 2024 consolidated copper production and C1 cash costs1 guidance of 190-220kt
and $2.30 to $2.50 per payable pound, respectively. Capstone notes that production is trending toward the
lower end of the guidance range, while cash costs are trending toward the upper end of the range, primarily
due to a slower ramp-up to 20ktpd capacity at Mantos Blancos in addition to higher cathode costs.
In order to advance its copper growth strategy, the company has approved an additional $15 million in
capital expenditures at Santo Domingo to continue to advance detailed engineering.
1 These are Non-GAAP performance measures. Refer to the section titled “Non-GAAP and Other Performance Measures”. 8
FINANCIAL OVERVIEW
Please refer to Capstone's Q2 2024 MD&A and Financial Statements for detailed financial results.
($ millions, except per share data) Q2 2024 Q2 2023 2024 YTD 2023 YTD
Revenue 393.1 333.9 733.0 669.5
Net income (loss) 27.5 (33.9) 21.7 (62.9)
Net income (loss) attributable to shareholders 29.3 (36.5) 24.5 (56.5)
Net income (loss) attributable to shareholders per
common share - basic and diluted ($) 0.04 (0.05) 0.03 (0.08)
Adjusted net income (loss)1 20.9 (12.2) 16.4 5.2
Adjusted net income (loss) attributable to shareholders
per common share - basic and diluted 0.03 (0.02) 0.02 0.01
Operating cash flow before changes in working
capital 102.9 22.0 165.1 65.1
Adjusted EBITDA1 123.1 43.4 203.2 109.3
Realized copper price1
($/pound) 4.53 3.71 4.18 3.93
($ millions) June 30, 2024 December 31, 2023
Net debt1 (741.3) (927.2)
Attributable net (debt)/cash1 (589.8) (776.6)
CONFERENCE CALL AND WEBCAST DETAILS
Capstone will host a conference call and webcast on Thursday, August 1, 2024 at 5:00 pm Eastern Time /
2:00 pm Pacific Time (Friday, August 2, 2024, 7:00 am Australian Eastern Standard Time). Link to the audio
webcast: https://app.webinar.net/rvoN9NB96e0
Dial-in numbers for the audio- only portion of the conference call are below. Due to an increase in call
volume, please dial-in at least five minutes prior to the call to ensure placement into the conference line on
time.
Toronto: 416-764-8650
Vancouver: 778-383-7413
Australia: 613-627-2402
North America toll free: 888-664-6383
A replay of the conference call will be available until August 8, 2024. Dial-in numbers for Toronto: (+1) 416-
764-8677 and North American toll free: 888-390-0541. The replay code is 142180#. Following the replay, an