Capstone Mining Corp. Aug. 10 announced its financial results for the three and six months ended June 30, including net earnings of US$45.4 million or US23 cents per share in the second quarter and US$58.9 million or C30 cents per share in the first six months of 2010.
Copper produced in the first six months at Capstone’s Cozamin Mine in Mexico and Minto Mine in Yukon Territory totaled 37.4 million pounds of payable copper at an estimated total cash cost of US$1.23 per payable pound.
The Vancouver B.C.-based miner ended the quarter with US$151.6 million in cash on hand (including $10.8 million of restricted cash) and held liquid investments of US$18.1 million.
“Capstone’s operations continue to generate significant cash flow from operating activities which, combined with the sale of some investments, has significantly increased our financial strength,” said Capstone Chairman and CEO Darren Pylot. “We benefit from low production costs and have a very strong balance sheet, with US$141 million in unrestricted cash on June 30, 2010, which positions us well to grow both organically (through exploration and development), and through external transactions.”
The company revised its guidance to 80 to 85 million pounds of copper in concentrates in 2010, with total cash costs net of by product credits anticipated to remain within the prior guidance of US$1.10 to US$1.20 per pound of payable copper, but likely towards the upper end of that range.
Due to the timing of production improvements, Capstone anticipates that the fourth quarter will have higher production than the three months previous. Achieving this guidance is dependent on a number of factors including increased production from higher copper grade areas supporting sustained higher grade mill throughput at the Cozamin Mine, successful resolution of the constraints in the tailings plant allowing increased mill throughput at the Minto Mine, and removal of sufficient water from the Minto pit to allow access to higher grade ore during the fourth quarter.
Capstone said a property-wide Titan-24 deep penetrating induced potential survey conducted at Minto identified a number of chargeability anomalies in areas untested by previous drilling, including Wildfire one of the strongest and most extensive IP anomalies yet identified at Minto.
The Wildfire discovery hole, 10SWC635, cut 10.8 meters grading 2.4 percent copper and 0.8 grams per metric ton gold. Assay results of mineralized intercepts from three additional step-out holes, similar to the discovery hole, are pending. A third exploration drill is being sent to the mine to accelerate the assessment of this new discovery.
"The discovery of yet another high grade copper-gold zone reinforces the tremendous prospectivity of the Minto Mine property," said Capstone President Stephen Quin. "Geophysics suggests that the Wildfire discovery could have a significant aerial extent, is relatively shallow, and the grades from the first hole are very encouraging. With three more mineralized intercepts within the geophysical anomaly, we have elected to bring in a third drill rig to rapidly assess the potential of this exciting discovery."
