Capstone Copper releases 2023 spending forecasts

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Capstone Copper Corp. [CS-TSX] said Wednesday it has achieved production and cost guidance for the nine months ended December 31, 2022.

Consolidated copper production was 136,300 tonnes at cash costs of US$2.68 per pound.  Consolidated copper production for the fourth quarter of 2022 was 45,500 tonnes at a cash cost of US$2.50 a pound of payable copper produced.

Capstone is a Canadian base metals mining company with a focus on copper.

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

The fully-permitted Santo Domingo project is located near the Mantoverde mine, which is currently undergoing construction of a 32,000-tonne-per-day sulphide concentrator with wet commissioning expected in late 2023.

Following the ramp up of that project, the company’s next phase of transformational growth will be a construction decision and integration of Santo Domingo. The Santo Domingo project 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.

“We had a strong finish to 2022 with consolidated cash costs down 9.0% quarter-over-quarter, helped by cost control at our operations and increased contribution of lower-cost sulphide production,’’ said Capstone CEO John MacKenzie.

“Our growth in high-margin sulphide production will be significantly boosted by the ramp-up of the Mantoverde Development project next year, a transformational project for Capstone that remains on budget and on schedule for completion by year-end 2023.’’

In 2023, Capstone is forecasting $400 million in sustaining and capital expenditures at its operating mines and the Santo Domingo project, including $140 million on sustaining capital and $260 million on expansionary capital, mainly related to completing the construction of the Mantoverde Development Project.

In addition, the company plans to spend $220 million in capitalized stripping at its three open pit mines. It is also gearing up for $10 million in brownfield and greenfield exploration activities in 2023.

On January 31, 2023, Capstone shares closed at $6.53. The shares are currently trading in a 52-week range of $7.79 and $2.25.

Capstone recently outlined its asset integration and synergy study plan for its Mantoverde copper mine and undeveloped Santo Domingo copper-iron-gold projects, which are located 35 kilometres apart.

By combining those assets, Capstone aims to create a “world-class’’ mining district targeting over 200,000 tonnes per year of low-cost copper production, with the potential to become one of the world’s largest producers of cobalt outside of the Dominican Republic of Congo.

A key component of the plan is the potential for cost synergies of between $80 and $100 million.

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