Capstone Copper Provides the Mantoverde-Santo Domingo District Integration Plan
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November 10, 2022
Capstone Copper Provides the Mantoverde-Santo Domingo
District Integration Plan
All amounts in US$ unless otherwise indicated
Vancouver, British Columbia – Capstone Copper Corp. (“Capstone” or the “Company”) (TSX:CS) today
announced the Mantoverde-Santo Domingo (“MV-SD”) District Integration Plan (the “Plan”) which showcases
the path towards creating a world-class mining district in the Atacama region of Chile, targeting over 200,000
tonnes per year (“tpa”) of low-cost copper production with the potential to also become one of the largest and
lowest cost battery grade cobalt producers in the world. The Company has the opportunity to unlock a total of
$80-100 million per year in operating cost savings, while also enabling additional copper and cobalt production,
infrastructure capital savings, and the potential for significant tax synergies through the reinvestment in Chile
to support our district growth (summarized in Figure 1 below).
The fully-permitted Santo Domingo project is located 35 kilometres northeast of the Mantoverde mine which
is currently undergoing construction of a 32,000 tonne per day (“tpd”) sulphide concentrator with wet
commissioning expected in late 2023 . Following the completion and successful ramp -up of the Mantoverde
Development Project (“MVDP”), the Company’s next phase of transformational growth will be a construction
decision and integration of Santo Domingo. The combination of key infrastructure already in place alongside
an experienced mine build and operating team significantly de-risks the future development of the district.
Please click the following link to view a 3D virtual tour presentation of the MV-SD District Integration Plan and
respective synergies, further outlined herein:
https://vrify.com/decks/12234-MV-SD-District-Integration-Plan
John MacKenzie, CEO of Capstone commented, “Over the past decade, I’ve closely monitored the progress
at the Santo Domingo project given its proximity to, and obvious synergies with, Mantoverde. We are extremely
excited to now be developing a world-class copper and cobalt district, with both commodities being essential
to the global economy’s decarbonization efforts. Our team is committed to pursuing the highest standards in
safety and environmental management as well as meaningful engagement with all stakeholders as we
progress our growth plans. We are transforming Capstone into a leading long-life and low -cost producer of
critical metals essential for the transition to net zero.”
Cashel Meagher, President and COO of Capstone added, “ The permitted and executable growth pathway
that lies ahead of us is the reason why I joined Capstone. This is a rare opportunity to design and engineer
significant synergies into the plan prior to the construction of the Santo Domingo project. We look forward to
hosting our Chile site visit next week to showcase our transformational growth in progress and our plans going
forward.”
Base Case Plan
Our Base Case plan includes the completion and successful ramp -up of MVDP, a sanctioning decision
followed by construction of the Santo Domingo copper-iron project, which includes upgrades to the existing
water and power infrastructure, as well as a development scenario for the Santo Domingo port located
approximately 65 kilometres by road from Mantoverde.
NEWS RELEASE
TSX:CS ● capstonecopper.com
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Future Growth Plan
Our Future Growth plan s include Mantoverde Phase II , which envisions an expansion of the sulphide
concentrator to process part of the 77% of resources not included in Phase I, processing Santo Domingo
oxides at the underutilized 60,000 tpa SX-EW cathode plant at Mantoverde, as well as the development of the
MV-SD cobalt opportunity, described below.
MV-SD District Integration Synergies:
• Water and Power Infrastructure – A plan to expand the existing Mantoverde desalination plant to
840 litres per second (“l/s”), utilization of existing water pipelines, and upgraded energy transmission
capacity provides the infrastructure foundation to support our district growth opportunities. We are
currently expanding the desalination capacity to 380 l/s to supply sufficient water requirements for
MVDP with expected completion by year -end 2022. The expansion to 840 l/s is expected to reduce
net capex by $25-30 million by utilizing existing pipeline infrastructure and lower operating costs by
$4-6 million per year while also reducing our environmental footprint by not requiring the previously
planned desalination plant at the Santo Domingo port. Additionally, a $20 million upgrade to the
existing power infrastructure is expected to further lower operating costs by $1-2 million per year, while
also allowing us to fully control our own energy distribution needs at our mine sites. The upgrade will
provide a pproximately 50 Megawatts of excess transmission capacity to the port beyond the
requirements from the current pipeline of projects and will enable optionality for future growth.
• Port Infrastructure – Opportunity to reduce Mantoverde’s concentrate trucking costs by $10 million
per year by using the planned Santo Domingo port (the “Port”), located 65 kilometres from Mantoverde
versus Puerto Angamos, 475 kilometers away. The planned Santo Domingo port is expected to have
sufficient scale to handle capesize vessels suitable for large cargo, including Santo Domingo copper
concentrate, iron ore , district cobalt production, and the potential for sulphuric acid handling .
Additionally, the Port could handle Mantoverde’s copper cathode production which could lower
transportation costs by approximately $2 million per year. Designing the Port presents an opportunity
to engineer a world-class asset that meets the highest environmental standards, in-line with our overall
environmental, social, and governance (“ESG”) strategy. The port framework agreement with Puerto
Abierto S.A., a wholly owned subsidiary of Puerto Ventanas S.A. , remains in-place and the rail and
iron ore pipeline trade-off studies are ongoing.
• Integrated Operations – Potential to lower MV -SD district operatin g costs by $20 -30 million by
streamlining the organizational chart across both operations , increasing purchasing power given
district scale, and standardizing equipment to promote productivity gains. Decades of technical and
operating experience in Chile provide a unique opportunity to significantly de-risk the execution of
Santo Domingo with a proven project delivery team from Mantos Blancos and Mantoverde.
• Santo Domingo Oxides – Potential addition of 8,000-10,000 tpa of copper production over the first
10 years of production, by leaching copper oxides at Santo Domingo and processing the concentrated
solutions at Mantoverde’s underutilized SX -EW facility. The potential increase in production is
expected to come from Santo Domingo’s oxide mineralization, much of which is in the pre -strip,
providing an operating cost advantage.
• Cobalt Opportunity – Ability to reduce operating costs by approximately $45 million per year by
building the cobalt and sulphuric acid production facility at Mantoverde that will process cobaltiferous
pyrite produced by both Mantoverde and Santo Domingo. The benefits would be realized through the
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neutralization of a weak acid by-product stream from the cobalt operation at the Mantoverde heap and
dump leach operation, as well as through the elimination of port and trucking costs related to sulphuric
acid use at Mantoverde. The plan would target an increase in district cobalt production by
approximately 1,500 to 2,000 tpa from Mantoverde to a total of 6,000 to 6,500 tpa, which would make
MV-SD one of the world’s largest and lowest -cost sustainable cobalt producers outside of the
Democratic Republic of Congo and China.
• Withholding Tax – Potential to realize tax synergies between $150-200 million by re-investing cash
flows to support our overall growth plan in Chile.
Figure 1
ABOUT CAPSTONE COPPER CORP.
Capstone Copper Corp. is an Americas -focused copper mining company headquartered in Vancouver,
Canada. We own and operate the Pinto Valley copper mine located in Arizona, USA, the Cozamin copper -
silver mine located in Zacatecas, Mexico, the Mantos Blancos copper-silver mine located in the Antofagasta
region, Chile, and 70% of the Mantoverde copper-gold mine, located in the Atacama region, Chile. In addition,
we own the fully permitted Santo Domingo copper-gold project, located approximately 30 kilometres northeast
of Mantoverde in the Atacama region, Chile, as well as a portfolio of exploration properties in the Americas.
Capstone Copper’s strategy is to unlock transformational copper production growth while executing on cost
and operational improvements th rough innovation, optimization and safe and responsible production
throughout our portfolio of assets. We focus on profitability and disciplined capital allocation to surface
stakeholder value. We are committed to creating a positive impact in the lives of our people and local
communities, while delivering compelling returns to investors by sustainably producing copper to meet the
world’s growing needs.
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Contact Information
Jerrold Annett, SVP, Strategy and Capital Markets
647-273-7351
Kettina Cordero, Director Investor Relations & Communications
604-262-9794
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
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 our expectations or beliefs
regarding future events and the impacts of the ongoing and evolving COVID -19 pandemic and the evolving
geopolitical environment. Forward -looking statements include, but are not limited to, statements with respect to
the execution of our future growth projects, our financial liquidity and development of our projects, the estimation
of Mineral Resources and Min eral Reserves, the success of the underground paste backfill and tailings filtration
projects at Cozamin, the timing and cost of the construction of the paste backfill and dry stack tailings plant at
Cozamin, the success and timing of the Mantos Blancos Co ncentrator Debottlenecking Project, the timing and
cost of the Mantoverde Development Project, the timing and results of the PV4 study, timing and success of the
Jetti Technology, the successful execution of a port services agreement with Puerto Abierto S. A., the expected
reduction in capital requirements for the Santo Domingo project, the timing and success of the Cobalt Study for
Santo Domingo, the timing and results of the integrated plan for Mantoverde - Santo Domingo, the realization of
Mineral Reserve estimates, the timing and amount of estimated future production, the costs of production and
capital expenditures and reclamation, the budgets for exploration at Cozamin, Santo Domingo, Pinto Valley,
Mantos Blancos, Mantoverde and other exploration projec ts, the timing and success of the Copper Cities project,
the success of our mining operations, the continuing success of mineral exploration, the estimations for potential
quantities and grade of inferred resources and exploration targets, our ability to f und future exploration activities,
our ability to finance the Santo Domingo project and other current or future projects and expansions, environmental
risks, unanticipated reclamation expenses and title disputes, the success of the synergies and catalysts related to
the combined business following the Company’s recent arrangement, and the anticipated future production, costs
of production, including the cost of sulphuric acid and oil and other fuel, capital expenditures and reclamation of
the Company's operations and development projects and the risks included in our continuous disclosure filings on
SEDAR at www.sedar.com. The potential effects of the COVID -19 pandemic on our business and operations are
unknown at this time, including Capstone Copper’s ability to manage challenges and restrictions arising from
COVID-19 in the communities in which Capstone Copper operates a nd our ability to continue to safely operate
and to safely return our business to normal operations. The impact of COVID-19 to Capstone Copper is dependent
on a number of factors outside of our control and knowledge, including the effectiveness of the meas ures taken
by public health and governmental authorities to combat the spread of the disease, global economic uncertainties
and outlook due to the disease, supply chain delays resulting in lack of availability of supplies, goods and
equipment, and evolving restrictions relating to mining activities and to travel in certain jurisdictions in which we
operate.
In certain cases, forward -looking statements can be identified by the use of words such as “anticipates”,
“approximately”, “believes”, “budget”, “estimates”, “expects”, “forecasts”, “guidance”, intends”, “plans”, “scheduled”,
“target”, or variations of such words and phrases, or statements that certain actions, events or results “be achieved”,
“could”, “may”, “might”, “occur”, “should”, “will be taken” or “would” or the negative of these terms or comparable
terminology. In this document certain forward -looking statements are identified by words including “anticipated”,
“expected”, “guidance” and “plan”. The forward-looking statements in this document are necessarily based on a
number of estimates and assumptions that, while considered reasonable by the Company as at the date of such
statements, are inherently subject to the business, economic and competitive uncertainties and contingencies .
The Company has based these forward -looking statements on the Company’s current expectations and
projections about future events. By their very nature, forward -looking statements involve known and unknown
risks, uncertainties and other factors that may c ause our actual results, performance or achievements to be
materially different from any future results, performance or achievements expressed or implied by the forward -
looking statements. Such factors include, amongst others, risks related to inherent hazards associated with mining
operations and closure of mining projects, future prices of copper and other metals, compliance with financial
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covenants, surety bonding, our ability to raise capital, Capstone Copper’s ability to acquire properties for growth,
counterparty risks associated with sales of our metals, use of financial derivative instruments and associated
counterparty risks, foreign currency exchange rate fluctuations, market access restrictions or tariffs, changes in
general economic conditions, availability and quality of water, accuracy of Mineral Resource and Mineral Reserve
estimates, operating in foreign jurisdictions with risk of changes to governmental regulation, compliance with
governmental regulations, compliance with environmental laws and regulations, reliance on approvals, licences and
permits from governmental authorities and potential legal challenges to permit applications, contractual risks
including but not limited to, our ability to meet the completion test requirements under the Cozamin Silver Stream
Agreement with Wheaton Precious Metals Corp. ("Wheaton"), our ability to meet certain closing conditions under
the Santo Domingo Gold Stream Agreement with Wheaton, acting as Indemnitor for Minto Metals Corp.’s surety
bond obligations post divestiture, impact of climate change and changes to climatic conditions at our operations
and projects, changes in regulatory requirements and policy related to climate change and greenhouse gas ("GHG")
emissions, land reclamation and mine closure o bligations, aboriginal title claims and rights to consultation and
accommodation, risks relating to widespread epidemics or pandemic outbreak including the COVID -19 pandemic;
the impact of COVID-19 on our workforce, risks related to construction activities at our operations and development
projects, suppliers and other essential resources and what effect those impacts, if they occur, would have on our
business, including our ability to access goods and supplies, the ability to transport our products and imp acts on
employee productivity, the risks in connection with the operations, cash flow and results of Capstone Copper relating
to the unknown duration and impact of the COVID -19 pandemic, impacts of geopolitical events and the effects of
global supply chain disruptions, uncertainties and risks related to the potential development of the Santo Domingo
project, risks related to the Mantos Blancos Concentrator Debottlenecking Project and the Mantoverde
Development Project, increased operating and capital costs, increased cost of reclamation, challenges to title to
our mineral properties, increased taxes in jurisdictions the Company operates or is subject to tax, changes in tax
regimes we are subject to and any changes in law or interpretation of law may be difficult to react to in an efficient
manner, maintaining ongoing social licence to operate, seismicity and its effects on our operations and communities
in which we operate, dependence on key management personnel, potential conflicts of interest involving our
directors and officers, corruption and bribery, limitations inherent in our insurance coverage, labour relations,
increasing input costs such as those related to sulphuric acid, electricity, fuel and supplies, increasing inflation rates,
competition in the mining industry including but not limited to competition for skilled labour, risks associated with
joint venture partners and non-controlling shareholders or associates, our ability to integrate new acquisitions and
new technology into our operations, cyb ersecurity threats, legal proceedings, the volatility of the price of the
Common Shares, the uncertainty of maintaining a liquid trading market for the Common Shares, risks related to
dilution to existing shareholders if stock options or other convertible securities are exercised, the history of Capstone
Copper with respect to not paying dividends and anticipation of not paying dividends in the foreseeable future and
sales of Common Shares by existing shareholders can reduce trading prices, and other risks of the mining industry
as well as those factors detailed from time to time in the Company’s interim and annual financial statements and
MD&A 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 our actual
results, performance or achievements to differ materially from those described in our forward -looking statements,
there may be other factors that cause our results, performance or achievements not to be as anticipated, estimated
or intended. There can be no assurance that our forward-looking statements will prove to be accurate, as our actual
results, performance or achievements could differ materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on our forward-looking statements.
CAUTIONARY NOTE TO UNITED STATES INVESTORS REGARDING PRESENTATION OF MINERAL
RESERVE AND MINERAL RESOURCE ESTIMATES
As a British Columbia corporation and a “reporting issuer” under Canadian securities laws, we are required to
provide disclosure regarding our mineral properties in accordance with Canadian National Instrument 43 -101 –
Standards of Disclosure for Mineral Projects (“NI 43-101”). NI 43-101 is a rule developed by the Canadian Securities
Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical
information concerning mineral projects. In accordance with NI 4 3-101, we use the terms mineral reserves and
resources as they are defined in accordance with the CIM Definition Standards on mineral reserves and resources
(the “CIM Definition Standards”) adopted by the Canadian Institute of Mining, Metallurgy and Petrol eum. In
particular, the terms “mineral reserve”, “proven mineral reserve”, “probable mineral reserve”, “mineral resource”,
“measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” used in this annual
information form and th e documents incorporated by reference herein and therein, are Canadian mining terms
defined in accordance with CIM Definition Standards. These definitions differ from the definitions in the disclosure
requirements promulgated by the SEC. Accordingly, information contained in this annual information form and the
documents incorporated by reference herein may not be comparable to similar information made public by U.S.
companies reporting pursuant to SEC disclosure requirements.
United States investors are also cautioned that while the SEC will now recognize “measured mineral resources”,
“indicated mineral resources” and “inferred mineral resources”, investors should not assume that any part or all of
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the mineralization in these c ategories will ever be converted into a higher category of mineral resources or into
mineral reserves. Mineralization described using these terms has a greater amount of uncertainty as to their
existence and feasibility than mineralization that has been ch aracterized as reserves. Accordingly, investors are
cautioned not to assume that any “measured mineral resources”, “indicated mineral resources”, or “inferred mineral
resources” that we report are or will be economically or legally mineable. Further, “inferred resources” have a greater
amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore,
United States investors are also cautioned not to assume that all or any part of the inferred resources exist . In
accordance with Canadian rules, estimates of “inferred mineral resources” cannot form the basis of feasibility or
other economic studies, except in limited circumstances where permitted under NI 43-101.
COMPLIANCE WITH NI 43-101
Unless otherwise indicated, Capstone has prepared the technical information in this document (“Technical
Information”) based on information contained in the technical reports, news releases and other public filings
(collectively the “Disclosure Documents”) available under Capstone Copper 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. For readers to fully understand the information in this
document, readers are encouraged to review the full text of the Disclosure Documents, including the qualifications,
assumptions and exclusions that relate to the Technical Information set out in this document, which qua lifies 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 rel ied upon out of context. The Technical Information is subject to the assumptions and
qualifications contained in the Disclosure Documents.
Disclosure Documents include the National Instrument 43 -101 compliant technical reports titled “Santo Domingo
Project, Region III, Chile, NI 43 -101 Technical Report” effective February 19, 2020 and “Mantoverde and
Mantoverde Development Project, NI 43 -101 Technical Report, Chañaral / Región de Atacama, Chile” effective
November 29, 2021.
The disclosure of Scientific and Technical Information in this document was reviewed and approved by Cashel
Meagher, P.Geo., President and Chief Operating Officer and Peter Amelunxen, PE, VP Technical Services
(technical information related to project updates at Santo Domingo and Mineral Reserves and Resources at Mantos
Blancos and Mantoverde), all Qualified Persons under NI 43-101.
ALTERNATIVE PERFORMANCE MEASURES
This document refers to certain non-GAAP financial performance measures, including “C1 cash cost”, “cash cost”,
“EBITDA”, “adjusted EBITDA”, “operating cash flow before changes in working capital”, “adjusted net (loss) income”,
“net debt”, “net cash”, “all -in sustaining costs”, “all -in costs”, “available liquidity”, “expansionary capital” a nd
“sustaining capital” are Alternative Performance Measures. Alternative performance measures are furnished to
provide additional information. These non-GAAP performance measures are included in this presentation because
these statistics are key performance measures that management uses internally to monitor performance, to assess
how the Company is performing, to plan and to assess the overall effectiveness and efficiency of mining operations.
These performance measures do not have a standard meaning within IFRS and, therefore, amounts presented may
not be comparable to similar data presented by other mining companies. These performance measures should not
be considered in isolation as a substitute for measures of performance in accordance with IFRS. For full information,
please refer to the Company’s latest Management Discussion and Analysis published on its Financial Reporting
webpage or on SEDAR (the “MD&A”)
C1 Cash Cost per pound : C1 cash costs per payable pound of copper produced is a measure reflectiv e of
operating costs per unit. C1 cash costs is calculated as cash production costs of metal produced net of by-product
credits and is a key performance measure that management uses to monitor performance. Management uses this
measure to assess how well the Company’s producing mines are performing and to assess overall efficiency and
effectiveness of the mining operations and assumes that realized by -product prices are consistent with those
prevailing during the reporting period.
EBITDA: EBITDA is net income before net finance expense, tax expense, and depletion and amortization.
Adjusted EBITDA: Adjusted EBITDA is EBITDA before the pre-tax effect of the adjustments made to adjusted net
(loss) income (above) as well as certain other adjustments required under the RCF agreement in the determination
of EBITDA for covenant calculation purposes. The adjustments made to Adjusted net (loss) income and Adjusted
EBITDA allow management and readers to analyze our results more clearly and understand the cash generating
potential of the Company.
Operating cash flow before change in working capital: Operating Cash Flow before changes in working capital
per common share is a performance measure used by the Company to assess its ability to generate cash from its
operations, while also taking into consideration changes in the number of outstanding shares of the Company.
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Adjusted net (loss) income : Adjusted net (loss) income is net income as reported, adjusted for certain types of
transactions that in our judgment are not indicative of our normal operating activities or do not necessarily occur on
a regular basis.
Net debt / net cash: Net debt / Net cash is a performance measure used by the Company to assess its financial
position and is composed of Long -term debt (excluding d eferred financing costs and purchase price accounting
("PPA") fair value adjustments), due to related parties, cash and cash equivalents and short-term investments.
All-in sustaining costs: All-in sustaining costs per payable pound of copper produced is an extension of the C1
cash costs measure discussed above and is also a key performance measure that management uses to monitor
performance. Management uses this measure to analyze margins achieved on existing assets while sustaining and
maintaining producti on at current levels. Consolidated All -in sustaining costs includes sustaining capital and
corporate general and administrative costs.