Capstone sets 200-million-pound copper target

Capstone Mining Corp. [CS-TSX] on Tuesday January 19 said it plans to advance two operational growth projects to sustain 200 million pounds of copper production, starting in 2022.

The forecast is contained in a corporate update that includes the company’s 2021 production and capital guidance, exploration updates, and executive leadership announcements.

Capstone said its production in 2020 finished above the highest end of its 140 to 155 million pounds guidance range. The company said its costs last year were below the bottom end of the US$1.85 to US$2.00 a pound per payable copper range.

In 2021, Capstone expects to produce between 175 and 190 million pounds of copper at a cash cost of between US$1.75 and US$1.90 per pound.

“This is the first year of a multi-year growth phase for Capstone that will target 40% higher production with 15% lower costs by 2022, compared to last year’s guidance,” said Capstone President and CEO Darren Pylot.

Capstone shares advanced on the news, rising 2.2% or $0.06 to $2.82 on volume of 539,336. The shares are currently trading in a 52-week range of $2.95 and 33 cents.

Capstone’s portfolio includes the Pinto Valley copper mine in Arizona, and the Cozamin copper-silver mine in Zacatecas, Mexico. In addition, Capstone holds a 70% interest in Santo Domingo, a large scale, fully-permitted, copper-iron-gold project in Region 111, Chile, in partnership with Korea Resources Corp.

In the coming weeks, Pylot said the company expects to close a US$150 million streaming agreement with Wheaton Precious Metals Corp. [WPM-TSX, NYSE] covering 50% of the silver production at the Cozamin mine.

Pylot has described the deal as transformational, giving Capstone one of the lowest debt positions amongst base metal producers at a time when he is expecting significant copper production and cash flow growth.

At Cozamin, Mercer said the company will release a pillar extraction study and new mine plan shortly. Following that, the paste backfill and dry stack tailings project will officially commence.

Also, at Cozamin a one-way ramp connection was completed in December, 2020, which will lead to a 30% increase in mining rates to 3,800 tonnes per day, supported by a higher grade mine plan which will deliver 50 million pounds of copper production and higher moving forward.