Capstone Mining Corp. is a TSX listed company focused on growing production from its two high-grade, low-cost mines located in mining friendly jurisdictions. Sustained resource growth at its mines has justified staged production expansions at both operations, which generate robust cash flow supported by a valuable hedge book and strong balance sheet, allowing for continued growth through M&A.
The Minto Mine is a high-grade, open pit copper-gold mine located in Yukon, Canada, forecast to produce approximately 50-55 million pounds of in 2010.
The Cozamin Mine is a high-grade, shallow underground copper-silver-zinc-lead mine located in Zacatecas, Mexico, forecast to produce approximately 40-45 million pounds of copper in 2010.
The Kutcho project is a high-grade, near surface copper-zinc-silver deposit in British Columbia, Canada, being advanced towards a production decision.
As of March 31, 2010, the company had 59 million pounds of copper forward sold at an average price of US$2.55/lb.
- High-grade, low-cost copper production
- Significant by-products of gold, silver, zinc and lead
- North American operations in mining friendly jurisdictions
- Strong cashflow from production supported by robust hedge book
- Track record of growing resources and production
- Proven ability to discover, acquire, develop and operate
- Strong management team with proven ability to deliver
The Minto Mine — Producing Copper and Gold in Canada
The high grade Minto copper-gold mine in Yukon, Canada, was built on budget and ahead of schedule. Commercial production commenced on October 1, 2007. The mill was expanded by 50% in late 2007 and by a further 33% in late 2008. The Minto Mine is one of the highest grade open pit copper-gold mines in the world, and is forecast to continue to be a low cost producer. Annual production is forecast to average 50-60 million pounds of copper, 20-25,000 ounces of gold and 250-300,000 ounces of silver during its first several years of operation. Forward sales of copper have been completed for approximately 50% of the next three years production, securing substantial revenues. Based on 2006 drilling, reserves were increased 40%. In 2007/08, three new deposits were discovered and defined, which could result in substantially increased resources, reserves and production, once fully assessed. Yet another discovery was made in early 2009 — Minto North — delivering the best ever gold intercepts at the Minto property to date.
The Cozamin Mine — Producing Copper, Zinc, Lead and Silver in Mexico
The Cozamin mine was developed and put into production at 1,000 tpd on time and under budget in 2006 at a cost of US$30 million. This expense was 100% repaid in less than
12 months. Production was expanded by 120% to 2,200 tpd at a cost of US $13 million in 2007, funded from cash flow, and was paid back in less than 6 months. The latest 35% expansion to 3,000 tpd was completed in 2008. The current resources are contained within a 1.5 km strike length of the 5.5 km long Mala Noche vein which the company controls, with the high grade copper resource centred around the San Roberto shaft, and a second, zinc-rich area discovered and defined in 2008 in the San Rafael area. The 2009 production forecast, at the full expanded capacity, is approximately 40 million pounds of copper.
The Kutcho Project
In line with its objective of accelerating its production growth, in May 2008 Capstone acquired 100% ownership in Western Keltic Mines Ltd., owner of the high grade Kutcho copper-zinc-gold-silver deposit in northwestern British Columbia. Western Keltic and a wholly-owned subsidiary of Capstone were amalgamated under the name "Kutcho Copper Corp." and the amalgamated company is now a wholly-owned subsidiary of Capstone.
The Kutcho project is a high grade copper-zinc-gold-silver deposit in the advanced development stage. The deposit is located approximately 120 km east of the community of Dease Lake and 330 km north of Smithers in northern British Columbia. The Kutcho deposit significantly increases Capstone’s mineral resource base and the project is currently being advanced towards a production decision.
Prior operators completed a pre-feasibility study evaluating the potential development of the Kutcho Creek deposit, the results of which were announced on September 5, 2007. Subsequent to acquiring the Kutcho project, Capstone began reassessing the development plans by focusing on the development of a smaller scale, lower capital cost operation that is focused on high grade production up front. In June of 2008, Capstone completed a preliminary economic assessment which demonstrated positive base case economics and outlined several opportunities for significant future enhancements. The most significant upside opportunities, which are currently being evaluated, include increasing the tonnes of high grade material to be processed, improving metallurgical recoveries beyond those assumed in the study and potential for development as an underground as opposed to open pit operation. Capstone began a drill program in May of 2008 to provide information necessary to support its objectives and intends to issue an updated preliminary economic assessment in the fall of 2009. The updated assessment for a revamp would incorporate several optimization opportunities including the results of the 2008 infill drilling, results from initial metallurgical testing and incorporating some of the more than 50% of the project mineral resources not considered in this current study.
In conjunction with these activities, Capstone has re-commenced the lead up to the project permitting process and has engaged local First Nations and their stakeholders in preliminary discussions regarding the scope of the revamped project.
Corporate Profile on Stockhouse
Darren M. Pylot
President & CEO
Mr. Pylot is the founder of Capstone Mining Corp. and in 2006 created Silverstone Resources Corp. He serves as President and Chief Executive Officer of Silverstone, and has been responsible for bringing Capstone’s Cozamin base metal mine into production as well as negotiating and securing Silverstone’s silver by-product streams agreements. Silverstone’s business model of pursuing silver by-product streams and exploration projects is unique in the industry; and in less than 2 years Capstone has increased production at the Cozamin mine by 200%. Mr. Pylot has over 17 years' experience in the management, administration and financing of public companies focusing on the junior resource sector. He has raised over C$200 million in equity financings in the past three years.
Mr. Pylot also serves as Chairman of the Board of Zena Capital Corp., and is also a director of East Asia Minerals Corp., a well-financed, Asian-based Canadian mineral exploration company with uranium properties and advanced gold and gold-copper properties.