Capstone Announces Updated Santo Domingo Feasibility Study – Building a World Class District in Chile
July 31, 2024
Capstone Announces Updated Santo Domingo Feasibility
Study – Building a World Class District in Chile
(All amounts in US$ unless otherwise indicated)
Vancouver, British Columbia – Capstone Copper Corp. (“Capstone” or the “Company”) (TSX:CS) (ASX:CSC)
today announced the results of an updated feasibility study (“FS”) for its 100%-owned, fully-permitted Santo
Domingo copper-iron-gold project (“Santo Domingo” or the “Project”) in Region III, Chile, located 35 kilometres
northeast of its 70%-owned Mantoverde mine.
“The release of the updated feasibility study for our Santo Domingo Project marks a major step towards the
creation of a world-class district in the Atacama region of Chile. We have optimized the mine plan, updated the
capital and operating cost estimates, and incorporated all experience gained throughout the engineering and
construction of our nearby Mantoverde Development Project”, John MacKenzie, Capstone’s Chief Executive
Officer, commented. “The 2024 feasibility study significantly enhances the mine’s economics backed by low
capital intensity and first quartile costs. A construction decision and the integration of Santo Domingo represents
the next phase of our transformational growth as we become a leading long-life and low-cost producer of critical
metals essential for the world’s decarbonization efforts. We now intend to progress with the assessment of the
optimal financing structure for the project, which may include bringing in a minority partner at the project level. In
parallel we will also continue to advance the detailed engineering on the project. Our team is committed to
pursuing the highest standards in safety and environmental management as well as continued engagement with
all stakeholders as we progress our growth plans.”
2024 SANTO DOMINGO FEASIBILITY STUDY SUMMARY
• The 2024 FS outlines a robust copper-iron-gold project with an after-tax net present value at an 8% discount
rate (“NPV8%”) of $1.7 billion and an after-tax internal rate of return (“IRR”) 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 concentrate at first quartile cash costs of $0.28 per payable pound of copper
produced
o Over the Project’s 19-year mine life, production is expected to average 68,000 tonnes of copper
and 3.6 million tonnes of iron concentrate at first quartile cash costs of $0.33 per payable pound of
copper produced
• 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
• A 19-year mine life is supported by a higher Mineral Reserve1 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
o Mineral Reserve tonnes have increased by 11% while contained copper has increased by 23%
since the 2020 Feasibility Study
• Total Measured and Indicated (“M&I”) Mineral Resources of 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%
o M&I Resource tonnes increased by 2% while contained copper in M&I Resources increased by 6%
since the 2020 Feasibility Study
• The Company plans to progress several value enhancement initiatives within the Mantoverde- Santo
Domingo (“MV-SD”) district that are noted in the Opportunities section but not yet incorporated into the base
case 2024 FS, including:
1 Comprised of 131 million tonnes in the Proven category and 305 million tonnes in the Probable category. Please refer to the detailed breakdown
of the Santo Domingo Mineral Reserve estimate below.
NEWS RELEASE
TSX:CS ● ASX:CSC ● capstonecopper.com
o The processing of Santo Domingo’s oxide material using Mantoverde’s excess SX -EW capacity
o The recovery of cobalt and additional copper from a pyrite concentrate
o Ongoing exploration of the MV-SD district, including the recently acquired Sierra Norte deposit
For a virtual tour of Santo Domingo and the MV-SD district, please visit: https://youtu.be/n-FyVJ9t2JE
SUMMARY OF RESULTS
The 2024 FS reflects the results of the Company’s further technical and optimization work at Santo Domingo. A
summary of key financial, production, cost, and operating details from the 2024 FS can be found below, in
addition to a comparison to the previous Feasibility Study published in 2020. For further details, please refer to
Exhibit 1 at the end of this news release.
2024 Feasibility
Study
2020 Feasibility
Study
Life of Mine (“LOM”) (years) 19 18
Initial capital cost (US$ billions) $2.3 $1.5
After-tax NPV(8%) (US$ billions) $1.7 $1.0
After-tax IRR (%) 24.1% 21.8%
After-tax Payback period (years) 3.0 2.8
Average Annual First Seven Years of Production
Copper (“Cu”) production2 (thousand tonnes) 106 103
Iron concentrate production (“Fe”) (million tonnes) 3.7 3.3
Gold production (“Au”) (thousand ounces) 35 30
C1 cash costs per pound of payable copper produced (by-product
basis)
$0.283 $0.612
C1 cash costs per pound of payable copper equivalent produced (co-
product basis)
$1.274 $1.163
Average Annual for LOM
Copper production (thousand tonnes)5 68 62
Iron concentrate production (million tonnes) 3.6 4.2
Gold production (thousand ounces) 22 17
C1 cash costs per pound of payable copper produced (by-product
basis)
$0.332 $0.022
C1 cash costs per pound of payable copper equivalent produced (co-
product basis)
$1.593 $1.403
2 Contained production includes recovery loss.
3 C1 cash costs are net of magnetite iron and gold by -product credits and selling costs. These are Non-GAAP performance measures; please
see “Non-GAAP and Other Performance Measures” at the end of this news release.
4 C1 cash costs on a co-product basis consist of mining costs, processing costs, mine-level G&A, gold revenue credit, and refining charges over
payable copper equivalent pounds (copper plus magnetite). These are Non-GAAP performance measures; please see “Non-GAAP and Other
Performance Measures” at the end of this news release.
5 After recovery loss.
First Seven Years Operating Statistics Summary 2024 Feasibility
Study
2020 Feasibility
Study
Total tonnes milled (million tonnes) 172.6 162.1
Strip ratio (waste to ore) 2.3:1 3.4:1
Head Grade
Copper (% Cu) 0.48 0.48
Iron (% Fe) 29.0 29.3
Gold (g/t Au) 0.07 0.06
Recovery
Copper5 90.3% 93.8%
Iron mass 15.1% 14.1%
Gold 67.8% 63.2%
Life of Mine Operating Statistics Summary 2024 Feasibility
Study
2020 Feasibility
Study
Total tonnes milled (million tonnes) 436.1 392.3
Strip ratio (waste to ore) 2.5:1 3.3:1
Head Grade
Copper (% Cu) 0.33 0.30
Iron (% Fe) 26.5 28.2
Gold (g/t Au) 0.05 0.04
Recovery
Copper6 90.1% 93.4%
Iron mass 15.7% 19.1%
Gold 64.7% 60.1%
Commodity Price Assumptions
Copper (per pound) $4.10 $3.00
P65 Index CFR China iron ore (per tonne)7 $110 $93
Gold (per ounce) $1,800 $1,280
Project Valuation Metrics – Price Sensitivities
NPV (after-tax,
8% discount)
(US$ billions)
IRR (after-tax)
(%)
Payback
period (after-
tax) (years)
Santo Domingo Cu-Fe-Au Project
Base Case pricing +10% $2.10 27.2% 2.8
Base Case pricing $1.72 24.1% 3.0
Base Case pricing -10% $1.34 20.8% 3.4
6 Copper recovery is for the copper concentrator only.
7 The 2024 FS includes three iron ore magnetite products, a 62% Fe magnetite, a 65% Fe magnetite, and a 67% Fe magnetite. For more details
regarding the pricing breakdown, please see section “Commodity Pricing – Iron Ore” and Exhibit 1.
Cashel Meagher, President and COO, commented, “The mine plan presented today at Santo Domingo represents
the next major step for Capstone in the evolution of the world-class Mantoverde-Santo Domingo district. Having
recently completed construction at our Mantoverde Development Project, we have an experienced mine-build
team which today is rare in our industry. The feasibility study for Santo Domingo outlines an actionable
investment opportunity with an attractive rate of return and a short payback period. Over time, we plan to further
augment these base case numbers with additional opportunities, including unlocking cobalt production in the
district, processing Santo Domingo’s oxides at Mantoverde, and continuing to explore the district to improve our
understanding of the longer-term potential. The plan presented today sets the stage for two major processing
centers in our world class Mantoverde-Santo Domingo district.”
SANTO DOMINGO PROJECT DESIGN
The updated Santo Domingo 2024 feasibility study was prepared by Ausenco Chile Limitada, part of Ausenco, a
multinational engineering, procurement, construction management, and operations service provider with broad
international experience in the design and construction of concentrator projects of this scale. Ausenco was
specifically responsible for the construction of Capstone’s nearby Mantoverde Development Project, which was
completed under a lump-sum turn-key engineering, procurement, and construction (“EPC”) contract.
The Santo Domingo project includes development of two open pit mines using conventional drilling, blasting, and
loading with electric and hydraulic shovels. The project includes a copper-iron concentrator designed to process a
maximum of 72,000 tonnes per day using Autogenous Grinding (“AG”) milling, with conventional rougher cell
flotation, regrinding and classification, with Jameson Cells used in the cleaner, cleaner scalper, cleaner
scavenger, and re-cleaner stages. Magnetite iron will be recovered from the copper rougher tailings using Low
Intensity Magnetic Separation. The planned infrastructure includes a tailings storage facility (“TSF”); an iron
magnetite concentrate pipeline and a third party operated desalination plant and desalinated water supply
pipeline; a port-located magnetite iron concentrate filter plant and stockpile; a port-located copper concentrate
storage building; ship loading facilities; a high voltage transmission line; and on- site and off-site infrastructure and
support facilities.
The Project is located 35 kilometres northeast of our Mantoverde copper-gold mine, 50 kilometres southwest of
Codelco's El Salvador copper mine, and 130 kilometres north-northeast of Copiapó, near the town of Diego de
Almagro, in Region III, Chile. The elevation at the site is approximately 1,000 metres above sea level (“masl”) with
relatively gentle topographic relief. Access to the property is one kilometre off the paved highway C -17 from Diego
de Almagro to Copiapó. The magnetite filter plant and stockpile, the copper storage building, the desalination
plant and other port infrastructure will be located in Punta Roca Blanca, 43 kilometres north of Caldera. The name
of the proposed port development is Puerto Santo Domingo.
For the first seven years of full operation, Santo Domingo will have an annual average copper production of
approximately 106,400 tonnes. The LOM average production is 68,100 tonnes of copper per year over a period of
approximately 19 years. The total LOM copper production is estimated at approximately 1.3 million tonnes.
For the first seven years of operation, the annual average iron concentrate production is estimated to be 3.7
million dmt. Over the LOM, the iron concentrate production is estimated at an annual average of 3.6 million dmt,
with a total estimated production of approximately 68.4 million dmt.
MINERAL RESERVE ESTIMATE
The updated Mineral Reserve estimate as at March 31, 2024, was prepared by Clay Craig, P.Eng., Capstone
Copper. Based on the Mineral Resource estimate, a standard methodology for pit limit analysis, mining sequence,
and cut-off grade optimization, including application of mining dilution, process recovery, economic criteria and
physical mine and plant operating constraints, has been followed to design the open pit mines and determine the
Mineral Reserve estimate for each deposit. The Mineral Reserves are summarized in the following table.
Mineral Reserve Estimate as at March 31, 2024
Reserve Category
Grade Contained Metal
Tonnage
Mt
Cu
(%)
Fe
(%)
Au
(g/t)
Cu
(kt)
Fe
(Mt)
Au
(koz)
Proven Reserves 130.9 0.52 27.2 0.07 674.5 12.6 291
Probable Reserves 305.1 0.25 26.2 0.04 760.7 55.8 346
Total Reserves 436.1 0.33 26.5 0.05 1,435.2 68.4 637
Mineral Reserve Estimate Notes:
1) Mineral Reserves are reported as constrained within Measured and Indicated Resources and pit designs
optimized using the following economic and technical parameters: metal prices of US$3.75/lb Cu,
US$1,400/oz Au and Fe prices ranging from US$69/dmt to US$114.51/dmt based on the Fe grade in
concentrate (net of Fe concentrate transport costs); average recovery to concentrate is 90.1% for Cu and
56.3% for Au, with magnetite concentrate recovery varying on a block-by-block basis; copper concentrate
treatment charges of US$80/dmt, U$0.08/lb of copper refining charges, US$5.0/oz of gold refining charges,
US$40/wmt and US$25.75/dmt for shipping copper and iron concentrates respectively; waste and ore mining
cost of $1.55/t and process and G&A+SUSEX of US$9.77/t processed; average pit slope angles that range
from 36.3° to 47.9°; a 2% royalty rate assumption and an assumption of 100% mining recovery .
2) Rounding as required by reporting standards may result in apparent summation differences between tonnes,
grade and contained metal content.
3) Tonnage measurements are in metric units. Copper and iron grades are reported as percentages, gold as
grams per tonne. Contained gold ounces are reported as troy ounces, contained copper as million pounds and
contained iron as metric million tonnes.
MINERAL RESOURCE ESTIMATE
Following is the current Mineral Resource Estimate as at March 31, 2024.
Category Deposit Mt NSR
($/t)
Cu
(%)
Fe
(%)
Au
(g/t)
Cu
kt
Fe
Mt
Au
Koz
Measured Santo Domingo 134 46 0.51 26.9 0.07 679 36 293
Indicated Santo Domingo
+ Iris Norte 372 33 0.24 25.4 0.03 892 95 405
Estrellita 41 24 0.32 - 0.03 133 - 44
Sub-Total 413 32 0.25 n/a 0.03 1,025 95 449
Total Measured and Indicated 547 35 0.31 n/a 0.04 1,704 131 742
Inferred Santo Domingo
+ Iris Norte 203 28 0.19 22.5 0.03 384 46 171
Estrellita 27 25 0.34 - 0.03 93 - 29
Total Inferred 230 28 0.21 n/a 0.03 477 46 200
Mineral Resource Estimate Notes:
1) Mineral Resources in this document are reported inclusive of Mineral Reserves. Mineral Resources that are
not Mineral Reserves do not have demonstrated economic viability.
2) The average Iron grades for the Project (Total Indicated, Total Measured plus Indicated, and Total Inferred
Resources) cannot be calculated because Estrellita does not contain iron resources .
3) Notes specific to the Mineral Resources for the Santo Domingo and Iris Norte deposits: a. Mineral Resources
for SD include Iris. b. Mineral Resources are reported using a net smelter return (NSR) cut -off value of
US$9.85/t. NSR is calculated using average long-term prices of US$4.10/lb Cu, US$1,600/oz Au, and Fe
prices that depend on the expected grade of the Fe concentrate (US$94.75/dmt or $129.77/dmt or
$140.26/dmt Fe concentrate). c. Mineral Resources are constrained by preliminary pit shells derived using a
Lerchs–Grossmann algorithm and the following assumptions: pit slopes 36.3°- 47.9°; mining cost is calculated
using a function that depends on where the material comes from (Santo Domingo or Iris Norte) and its
destination (dumps, plant or stock); processing cost based on Fe concentrate routing code (including G&A
costs); processing recovery based in the recovery equations for copper, gold, and iron as detailed above.
4) Notes specific to the Mineral Resources for the Estrellita deposit: a. Mineral Resources are reported using an
NSR cut-off value of US$9.63/t. NSR is calculated using average long-term prices of US$4.10/lb Cu and
US$1,600/oz Au. b. Only copper, and gold were considered in the NSR calculation; iron was excluded. c.
Mineral Resources are constrained by preliminary pit shells generated using a Lerchs –Grossmann algorithm
and the following assumptions: pit slopes 43º; mining cost of US$1.55/t, processing cost of US$9.46/t
(including G&A cost); processing recovery are calculated based in the recovery curves for copper and gold.
5) Rounding as required by reporting standards may result in apparent summation differences .
6) Tonnage measurements are in metric units. Copper and iron are reported as percentages (%) and gold as
grams per tonne (g/t).
For this update, Capstone undertook significant revisions and improvements to the geological models (lithology
and oxidation models), the domaining strategy and the estimation scheme for both deposits. Two block models,
one for Santo Domingo – Iris Norte and one for Estrellita were created incorporating the new geological modelling
and an updated drill hole database that included the more recent drillholes from the Project. All grade interpolation
was performed using ordinary kriging and an NSR was calculated using updated recovery curves for Cu, Au and
Fe, and updated metal prices and costs. Whittle shells were used to constrain the final Mineral Resource
estimates.
When comparing only the 2024 Mineral Resources for Santo Domingo and Iris Norte compared with the 2020
Feasibility Study, the update has resulted in higher Cu and Au grades, slightly lower Fe grades, and a slight
increase in an additional 5% to 15% metal in Measured and Indicated and approximately two to four times more
metal in Inferred Resources.
Readers are advised that Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability. Mineral Resource estimates do not account for mineability, selectivity, mining loss and dilution. These
Mineral Resource estimates include inferred Mineral Resources that are normally considered too speculative
geologically to have economic considerations applied to them that would enable them to be categorized as
Mineral Reserves. Even though test mining has been undertaken in areas with Measured and Indicated class
Mineral Resources, there is no certainty that Inferred Mineral Resources will be converted to Measured and
Indicated categories through further drilling, or into Mineral Reserves, once economic considerations are applied.
MINE PRODUCTION SCHEDULE
The cash flow model is supported by a mine plan developed to an annual level of detail, which is available in
Exhibit 1 at the end of this release. Approximately 45 million tonnes of material would be pre-stripped prior to
start-up of operations and used in the construction of the TSF starter dam. The overall strip ratio for the LOM is
2.5:1.
PROCESS DESCRIPTION
The Santo Domingo process broadly consists of the following stages: crushing, grinding, copper flotation,
magnetite recovery, copper dewatering and load-out, magnetite pumping and dewatering, tailings dewatering and
storage.
The primary crushing plant will process run of mine (“ROM”) ore feed in a gyratory crusher. A belt feeder transfers
the ore from crusher area to the stockpile feed conveyor, and ultimately discharges fresh ore over a covered
conical coarse ore stockpile. The stockpile allows ore reclaim using four apron feeders located within the reclaim
tunnels (two trains of two feeders), which feed two parallel grinding circuits via dedicated conveyors.
Each grinding circuit consists of one 18 MW autogenous grinding mill (“AG mill”), one pebble AG mill discharge
screen, two pebble crushers (duty & standby), one cyclone cluster and one ball mill. The AG mill product slurry
discharges over a horizontal single deck vibrating screen for pebble washing and transferring of pebbles to pebb le
conveyors and then to pebble crushing. Crushed pebbles report to the AG mill feed conveyor.
There is the option of bypassing the pebble crushers and recycling uncrushed material to the AG mill using the
same belt conveyor system, when required. Also, a belt plow mechanism is available on the conveyors for
purging pebbles to grade to aid grind-out of mills when required.
The AG mill screen undersize feeds the 9 MW variable speed ball mill and discharges into the grinding cyclone
cluster feed box, where it is mixed with the ball mill product and is pumped to a cluster of 33” classification
cyclones. Cyclone underflow reports by gravity to the ball mill and cyclone overflow feeds the downstream copper
flotation circuit.
Copper flotation consists of conventional rougher cell flotation, regrinding and classification, with Jameson Cells
used in the cleaner scalper, cleaner scavenger, and re-cleaner stages. The rougher flotation stage recovers both
copper minerals and pyrite minerals. The cleaner circuit selectively recovers copper sulphides and pyrite
preferentially reports to the cleaner scavenger tail stream. There is allowance in the design for future installation
of a pyrite recovery circuit to recover pyrite that contains cobalt. Final copper concentrate is pumped to
downstream copper thickening and dewatering prior to stockpiling and load-out.
The iron concentrate plant is designed to produce two simultaneous products, determined by the nature of the
magnetite mineral: a) a higher iron grade product (“high grade concentrate”), and; b) a lower iron grade (“low
grade concentrate”).
A detailed Mine Production Summary and Plant Feed Production Schedule showing tonnes processed, grades
and recoveries is available in Exhibit 1 at the end of this release.
The tailings storage system will consist of a tailings storage facility (“TSF”) located approximately 2 kilometres
southeast of the proposed process plant. The TSF is designed to store approximately 361 million tonnes of high
density thickened tailings, which is sufficient capacity for the approximately 19 years of the mine life. Storage of
both desalinated and process water is proposed in lined ponds near the plant site. Water make- up is proposed to
be desalinated water.
OFFSITE INFRASTRUCTURE AND SERVICES
The 2024 FS includes 100% of the capital requirements for a greenfield port in the Punta Roca Blanca area
(“Puerto Santo Domingo”) on the coast 43 kilometres north of Caldera in the Atacama Region (Region III). The
port facility is designed to accommodate the maximum throughput requirements of 5.4 million tpa of magnetite
concentrate and 0.72 million tpa of copper concentrate, considering the Santo Domingo Project requirements and
the future Mantoverde operation requirements.
The planned route for transporting cargo, staff and equipment to the Santo Domingo mine- plant site is from the
south of the mine site by Route C -17 and from the north by Route C -13. Capstone has commenced & partially
completed construction of approximately 18.5 km of the C -17 bypass road, to reroute this public highway around
the mine-plant project site. The closest commercial airport is the Desierto de Atacama Airport, 113 km south from
Chañaral, which has regular scheduled flights to Santiago. The closest airport to the Santo Domingo site is the El
Salvador Airport, a private airport, 44 km from the mine-plant site.
WATER AND CONCENTRATE TRANSPORT
The process water required by the Santo Domingo operation will be produced by a desalination plant located at
the port. Capstone has held detailed discussions with water supply companies to confirm interest in supplying
desalinated water to the operation, from a facility at the port or from another location. The current plan is that a
build–own–operate–transfer (BOOT) contractor will construct and operate the sea water intake, reverse osmosis
desalination plant and brine return system at the port and the desalinated water pipeline as part of the BOOT
contract. Alternatives under consideration are the purchase of desalinated water from an existing plant, from a
plant that is planned to be built in the Atacama Region for multiuser supply, or, as part of a district integration
opportunity, from a potential expansion to the desalination plant supporting Capstone’s nearby Mantoverde
operation.
A magnetite concentrate pipeline will transport magnetite concentrate from the process plant to the filter plant at
the port via a pipeline starting at an elevation of 1,027 masl and ending at the port at an elevation of 16 masl.
Water recovered from the magnetite concentrate filtering process at the port will also be recycled and reused. The
copper concentrate will be trucked from the site to Puerto Santo Domingo.
Both the water and the concentrate pipelines will use the same permitted right-of-way and will run parallel to
existing roads for the majority of the distance from the mine area to the port. The pipeline route will largely follow
the valleys with the single route high point located approximately 45 kilometres from the mine site near the
Mantoverde mine operation.