Capstone Mining Corp. [CS-TSX] on Thursday November 8 made reductions to its organizational structure, including changes to its senior executive team. Capstone said the move is designed to improve financial and operating performance by further empowering mine general managers and their teams to deliver profitable, safe and sustainable production within their respective business units.
Capstone said it has eliminated 35% of positions from its head office in Vancouver and expects to reduce annual and corporate general and administrative expenses by approximately US$5 million per year.
Capstone has two producing copper mines. They are the Pinto Valley Mine in Arizona, and the Cozamin Mine in Mexico. The company’s portfolio also includes the large scale 70%-owned copper-iron Santo Domingo development project in Chile.
Capstone recently terminated a deal to sell its Minto Mine in the Canadian Yukon to Pembridge Resources Plc [PERE-LON]. Capstone said at the time it would immediately put the mine on care and maintenance while it waits for copper and equity markets to improve.
“We are committed to seeing our portfolio of assets achieve their full potential and deliver industry leading returns for our shareholders,” said Capstone President and CEO Darren Pylot in a press release on Thursday. “These changes will help us streamline support to our operating teams as well as drive a sense of ownership, with each operation functioning as an independent business unit,” he said.
“The corporate team will focus on the significant organic growth opportunities within our portfolio.”
As part of the company’s executive leadership transition, Gregg Bush, Senior Vice-President and Chief Operating Officer, will retire from the company at the end of the year. At this time, Capstone said it does not anticipate filling the role of Chief Operating Officer in this decentralized operating model.
Investors reacted to the news by sending Capstone shares down 3.64% or $0.02 to 53 cents. The stock is trading in a 52-week range of 48 cents and $1.62.
Capstone recently reported a third quarter net profit of 1.27 million or $0.00 per share on revenue of $112.7 million. That compared to a year earlier profit of $20.2 million or $0.05 on revenue of $118 million. As of September 30, 2018, the company had $40.9 million in cash, down from $116.2 million at the end of 2017.
Capstone recently secured an option to earn up to a 70% interest in Lara Exploration Ltd.’s [LRA-TSXV] Planalto Copper Project in northern Brazil.
Lara said its exploration work over the past 12 months has yielded a series of very promising drill results from the Homestead target, including hole PDH 18-03, which intersected 130.41 metres between 68.05 metres and 198.46 metres down hole, with an average grade of 0.88% copper 90 ppb gold, or 0.93% copper equivalent, within a wider zone of 284.71 metres from surface averaging 0.48% copper and 48 ppb gold.