| February 01, 2010 Capstone Reports Production & Operating Costs for Q4/09 & Full Year 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VANCOUVER, British Columbia - Capstone Mining Corp. (CS: TSX) today announced its operating results for the three and twelve months ended December 31, 2009. Combined production totalled 24.7 million and an adjusted 90 million pounds of copper in concentrates for the three and twelve months ended December 31, 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$1.04 and US$1.03 per pound of payable copper produced in the three and twelve months ended December 31, 2009, respectively. "Strong fourth quarter operating results resulted in an adjusted 90 million pounds of copper in concentrates at a total cash cost of US$1.03 per payable pound of copper during 2009, helped by a return to normal operations at both mines in the fourth quarter," said Stephen Quin, President & COO of Capstone Mining Corp. "Our mining operations in the Yukon and Mexico are well positioned to meet their objectives for 2010, and both operations have some excellent opportunities to further optimize and enhance their performance," he said. "In addition, our land holdings surrounding each of our mines have excellent exploration potential and will be the subject of sustained exploration during the year as we look to realize on that potential."
Both mines realized negative adjustments to previously reported copper production based on the final settlement of copper sales during the year, 1.0 million pounds at Minto and 0.7 million pounds at Cozamin. As these amounts are related to adjustments to shipments made over the full year, the adjustments are only reflected in the year to date column, therefore certain lines will not sum across. Operational Highlights for the three and twelve months ended December 31, 2009 The following is a summary of Capstone's operational highlights for the three and twelve months ended December 31, 2009:
Key operating statistics at the Cozamin Mine for 2009 are presented below:
As previously disclosed, development of very wide (20-30m) high grade areas of the Cozamin deposit were delayed because the wide mineralization extended deeper and wider 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. This affected Q3/09 and, to a lesser extent, Q4/09 production and operating costs. Development of the wider ore zones was completed at the end of Q3/09 and production drilling and ore extraction has been underway throughout Q4/09. Production from these high grade areas has ramped more slowly than was originally projected as a result of a cautious approach to implementing and extracting ore from these critical areas to ensure long term geotechnical stability. A cable bolting and waste backfill ground support system was implemented to support the hanging wall in the wide ore zone and ensure geotechnical stability and reduce risk of dilution. The resulting lower copper production was been somewhat offset by significantly higher than planned lead production as shallower, high lead-zinc stopes were brought back into production following the rapid rise in lead and zinc prices over the past several months. Given continued high lead and zinc prices, Cozamin will continue to take a flexible approach to production from higher grade lead and zinc areas in order to crystallize profitability from these areas while maintaining overall operational cash flow. During the three months ended December 31, 2009, the Cozamin Mine shipped and recorded as revenue 14,672 dmt of copper, 1,906 dmt of lead and 5,322 dmt of zinc concentrates. During the full year of 2009, a total of 68,206 dmt of copper concentrates, 6,762 dmt of lead concentrates and 18,569 dmt of zinc concentrates were shipped and recorded as revenue. Operating Details - Minto Mine Key operating statistics at the Minto Mine for 2009 are presented below:
Unit operating costs for the Minto Mine in Q4/09 were higher than in prior quarters due to impact of Capstone's decision to accelerate mining with extended shift schedules in order to ensure maximum ore extraction from the pit prior to freshet in 2010 so that any resulting impact on production can be avoided or minimized. As a result of this decision, accelerated extraction of ore and waste from the Phase 4 push back in the pit, with the higher strip ratio related to the Phase 4 push back, increased operating costs, even after adjustments for stockpiling and inventory adjustments. In addition, on an annual basis, the strengthening of the Canadian dollar relative to the US$ (up 15.9%) affects Minto's operating costs, which are reported in US$ but mostly incurred in Canadian dollars. During the three months ended December 31, 2009, the Minto Mine shipped and recorded as revenue 10,517 dmt of copper concentrate. For the twelve months a total of 59,459 dmt were shipped and recorded as revenue. Only one shipment was made in the fourth quarter as truck access to the mine was not available due to the Yukon River freeze-up. Concentrate trucking commenced again on January 11, 2010 with the opening of the ice bridge across the Yukon River. Minto PFS As announced December 15, 2009, Capstone reported the results of an independent preliminary feasibility study on the Phase IV expansion of the Minto Mine that detailed an extended mine life from the Minto Mine from open pit sources (the "Phase IV PFS"). This study also identified opportunities for the potential development of underground, higher grade production to supplement open pit production. This opportunity has become the focus for consideration of a potential Phase V expansion of the Minto Mine during 2010. Phase V would most likely comprise underground production in parallel with open pit production at the same mill throughput rates as proposed in the Phase IV PFS, resulting in an overall higher feed grade and the open pit production being spread over a longer time period. Outlook The production guidance for 2010 was provided in a news release dated December 17, 2009. 2009 Financial Results Timing Capstone will report its 2009 financial results after market close on Wednesday, March 24, 2010 and will host a conference call and webcast to discuss these results as noted below. Conference call and webcast details are as follows: Date: Thursday, March 25, 2010 Time: 8:00 AM Pacific Time (11:00 AM Eastern Time) Dial in: North America - 1.888.231.8191, International - 1.647.427.7450 Webcast: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2937660 Replay: North America - 1.800.642.1687, International - 1.416.849.0833 Replay Pass code: 51468567 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 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. _________________________________________ (1) These are non-GAAP performance measures and readers should refer to Non-GAAP Performance Measures note at the end of this news release for further details. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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