Capstone Mining ups copper reserves in Mexico by 97%

Capstone Mining Corp. [CS-TSX] shares were active Thursday September 10 after the company released an updated technical report for its Cozamin mine in Zacatecas, Mexico that includes a sharp increase in proven and probable reserves and a plan to increase the copper production by 70%.

Cozamin is one of two producing copper mines in the Capstone portfolio. The other is the Pinto Valley mine in Arizona.

Capstone said proven and probable mineral reserves at Cozamin have increased by 97% from a previous December, 2019 estimate and now stand at 10.2 million tonnes, grading 1.79% copper.

The company also said it remains on track to ramp up to a milled throughput rate of 1.35 million tonnes per annum by the second quarter of 2021. During the three years after the expansion in the milling rate is complete, average annual copper and silver production at Cozamin will increase by 70% to 61.4 million pounces and 43% to 1.75 million ounces, respectively, the company said.

Copper grades are also expected to increase by 31% with recoveries for copper rising to 96.1% from 95%. Additionally, average annual costs (net of by-products) are expected to fall 23% from current levels to US$0.67 cents per payable pound of copper.

Capstone shares advanced on the news, rising 2.9% or $0.04 to $1.40 on volume of 586,889. The shares trade in a 52-week range of $1.38 and 33 cents.

“We decided to take a two-phase approach and release the mineral reserves ahead of our 2021 budgeting cycle, allowing us to greenlight key projects by year-end,” said Brad Mercer, Capstone’s senior vice-president, exploration and operations.

“The second phase of this work, targeted for completion in the fourth quarter of 2020, will focus on opportunities we have identified, such as the feasibility of high-grade pillar extraction using paste backfill, updating the block model with ongoing exploration results, and ongoing metallurgical and geotechnical work on vein 10 not in [the] reserve,” Mercer said.