| October 14, 2009 Capstone Reports Production & Operating Costs for Q3 and First Nine Months of 2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine Month Production of 66.8 million pounds of Copper in Concentrates at an Estimated Total Cash Cost (1) of US$0.99 per pound of payable copper VANCOUVER, BRITISH COLUMBIA - Capstone Mining Corp. (CS: TSX) today announced its operating results for the three and nine months ended September 30, 2009. Combined production totalled 17.7 and 66.8 million pounds of copper in concentrates for the three and nine months ended September 30, 2009, with additional significant by-products of lead, zinc, silver and gold. The total cash costs (1), net of estimated by-product credits and selling costs, were US$1.14 and US$0.99 per pound of payable copper produced, respectively. "As previously advised, both of Capstone's operations, the Cozamin and Minto mines, coincidentally had lower than average production quarters, bringing nine months production to 66.8 million pounds of copper in concentrates at a total cash cost of US$0.99 per pound of payable copper," said Stephen Quin, President & COO of Capstone Mining Corp. "These results are a result of previously disclosed production delays related to water in the pit at Minto and delayed access to deeper higher grade ores at Cozamin, despite which, year-to-date production costs remained on forecast. The Minto pit is now dewatered and development has been completed at Cozamin, giving access to high grade ore again at both operations. This high grade feed, combined with each operation's ability to exceed design mill throughput, provide Capstone the opportunity to catch up on its production and we will strive to come within the range of prior guidance of 95 to 105 million pounds of copper production for 2009," he said. "This will require record production from both operations for the remainder of the year, but both mines are well positioned to deliver such records."
Capstone Mining - Production Highlights for 2009
Operational Highlights for the three and nine months ended September 30, 2009 The following is a summary of Capstone's operational highlights for the three and nine months ended September 30, 2009:
Key operating statistics for the Cozamin Mine for the first three quarters and year-to-date for 2009 are presented below: Capstone Mining -- Cozamin Mine Production Statistics
(2) Adjustments based on final settlements will be made in future periods. Overall, the Cozamin Mine performed well, despite the shortages of feed related to delays in bringing the new, higher grade stopes into production. As previously disclosed, development of very wide (20-30m) high grade areas of the Cozamin deposit were delayed because the wide mineralization extended deeper than anticipated and this mineralization needs to be extracted from the bottom up in order to ensure geotechnical stability. As a result, development needed to be pushed deeper in order to get to the bottom of the high grade before commencing ore extraction and, in the interim, production came from shallower areas with lower copper but higher lead and zinc content. Development of the wider ore zones was completed at the end of Q3/09 and production drilling has commenced. Production from these high grade areas is expected to ramp up quickly. This higher grade feed, combined with the Cozamin mill's track record of sustaining significantly higher than design throughput should result in a very strong Q4/09. During the three months ended September 30, 2009, the Cozamin Mine shipped and recorded as revenue 16,914 dmt of copper, 1,943 dmt of lead and 3,435 dmt of zinc concentrates. During the first nine months of 2009, a total of 53,534 dmt of copper, 4,856 dmt of lead and 13,247 dmt of zinc concentrates were shipped and recorded as revenue. Operating Details -- Minto Mine Key operating statistics for the Minto Mine for the three quarters and year-to-date for 2009 are presented below: Capstone Mining -- Minto Mine Production Statistics
(2) Gold is not assayed on site, resulting in a significant lag in receiving this data. (3) Adjustments based on final settlements will be made in future periods. (4) Minto's operating costs are adjusted to exclude mining of ore and waste not related to concentrate produced in the period, these costs are capitalized or inventoried in the financial statements, then expensed when the associated ore is processed. The Minto Mine exceeded budgeted Phase III throughput capacity in Q3/09, which budget factors in maintenance and availability into the nominal design capacity of 3,200tpd. As noted above, excess water, over and above what could be contained in the water storage pond, was diverted into the open pit during freshet in order to prevent a non-compliant discharge. This diversion was anticipated in the budget for 2009. However, the snowpack was greater than usual, resulting in more water being diverted into the open pit than planned. The Minto Mine received approvals from regulators to discharge the excess water. In the interim, while access to the pit was curtailed, milling operations have been sustained from lower grade stockpiles, but resulted in lower than average grade and copper production in the quarter. Access for ore mining in the pit was regained in the first week of October 2009 and should result in an above average production quarter in Q4/09. See 'Outlook' below. During the three months ended September 30, 2009, the Minto Mine shipped and recorded as revenue 19,538 dmt of copper concentrate. For the nine months a total of 48,943 dmt were shipped and recorded as revenue. Two shipments were made in the third quarter while only one is expected during the fourth quarter as trucking access will only be available until the end of October due to the Yukon River freeze-up. For 2009, Minto's concentrate off-taker elected to settle on the basis of shipment date plus one month, as opposed to plus three months in 2008, reducing the time lag between provisional payment and final settlement, and likely thereby reducing the volatility of provisional pricing adjustments. Minto PFS As previously disclosed, Capstone is working with its consultants, lead by SRK Consulting (Canada) Inc. towards the completion of a pre-feasibility study on its Phase IV expansion project at the Minto Mine. Based on the evaluations completed to date, the project has focused on a two step expansion comprised of (1) an expansion to a nominal 4,000 tonnes per day of throughput with only modest capital expenditures -- now designated the "Phase IV" project, and (2) a potential future expansion to as much as 7,500 tonnes per day, should mineral resources and economic parameters warrant -- a potential "Phase V" expansion. The Phase IV pre-feasibility study will focus on sustaining copper production in the range of 50 million pounds of copper in concentrate from a combination of the remains of the Minto Main deposit, the Minto North and Ridgetop deposits and the Area 2/118 deposits, likely in that sequence of extraction. The capital required for the Phase IV expansion of the mill is expected to total less than C$10 million, some of which is already being committed (such as the new hydra-cone crusher discussed above). Excluded from this capital is a determination of the optimal route for future mining: either continued contract mining or self-mining. Subject to further evaluations, Capstone and its consultants, based on an extensive review of the current plant and planned Phase IV modifications, believe it may be possible to increase the throughput of the existing mill to a nominal 7,500 tonnes per day for an additional approximately C$30-40 million, should mineral resources and economic parameters warrant. However, the Phase V study will be a matter of future considerations and the current focus is on completing the Phase IV study. Outlook As previously advised, as a result of the timing of production cycles at the Cozamin and Minto mines, Capstone anticipated that the third quarter 2009 would be a below average production quarter and the fourth quarter 2009 is forecast to be above average. The focus for the fourth quarter 2009 will include:
Third Quarter Financial Results Timing Capstone will report its third quarter 2009 financial results on Thursday, November 12, 2009 and will host a conference call and webcast to discuss these results as noted below. Conference call and webcast details are as follows:
For further information about Capstone, please contact: Darren Pylot, Vice Chairman & CEO or Stephen Quin, President & COO Or Jason Howe, VP Investor Relations, at (604) 684-8894 or toll free at (866) 684-8894 info@capstonemining.com The TSX does not accept any responsibility for the adequacy or accuracy of this press release. Forward-Looking Information This document may contain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this document and Capstone Mining Corp. (the "Company") does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements. 43-101 Compliance Unless otherwise indicated, Capstone has prepared the technical information in this news release ("Technical Information") based on information contained in the technical reports and news releases (collectively the "Disclosure Documents") available under Capstone Mining Corp.'s and Sherwood Copper Corp.'s company profile on SEDAR at www.sedar.com. Each Disclosure Document was prepared by or under the supervision of a qualified person (a "Qualified Person") as defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101"). Readers are encouraged to review the full text of the Disclosure Documents which qualifies the Technical Information. Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic viability. The Disclosure Documents are each intended to be read as a whole, and sections should not be read or relied upon out of context. The Technical Information is subject to the assumptions and qualifications contained in the Disclosure Documents. The following employees of Capstone, each a Qualified Person, reviewed Technical Information contained in this news release: Robert Barnes, Professional Engineer reviewed Technical Information related to the Cozamin Mine and Stephen Quin, Professional Geologist reviewed all Technical Information in this news release. In addition, Randall Thompson, General Manager, reviewed Technical Information related to the Minto Mine And Telesforo Martinez, General Manager, reviewed the Technical Information related to the Cozamin Mine. (1) Non-GAAP Performance Measures "Total Cash Cost per Pound of Payable Copper" and "On site operating costs per tonne milled" are Non-GAAP Performance Measures. These performance measures are included because these statistics are key performance measures that management uses to monitor performance. Management uses these statistics to assess how the Company is performing to plan and to assess the overall effectiveness and efficiency of mining operations. These performance measures do not have a meaning within GAAP and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with GAAP. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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