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A Leading Intermediate Copper Producer October 2014
2 2
This presentation, and the documents incorporated by reference herein, 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 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 our expectations or beliefs regarding future events. Forward-looking statements include, but are not limited to, statements with respect to the estimation of mineral resources and mineral reserves, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production and capital expenditures, the success of our mining operations, environmental risks, unanticipated reclamation expenses and title disputes. In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “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 that may cause our actual results, performance or achievements 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 inherent hazards associated with mining operations; future prices of copper and other metals; counterparty risks associated with sales of our metals; our ability to raise capital; foreign currency exchange rate fluctuations; accuracy of mineral resource and mineral reserve estimates; changes in general economic conditions; uncertainties and risks related to the potential development of the Santo Domingo Project; increased operating and capital costs; challenges to title to our mineral properties; operating in foreign jurisdictions with risk of changes to governmental regulation; compliance with governmental regulations; dependence on key management personnel; compliance with environmental laws and regulations; reliance on approvals, licenses and permits from governmental authorities; impact of climatic conditions on our Pinto Valley, Cozamin and Minto operations; potential conflicts of interest involving our directors and officers; aboriginal title claims and rights to consultation and accommodation; limitations inherent in our insurance coverage; land reclamation and mine closure obligations; labour relations; increasing energy prices; competition in the mining industry; risks associated with joint venture partners; and our ability to integrate new acquisitions into our operations. Although we have attempted to identify important factors that could cause our actual results, performance or achievements to differ materially from those described in our forward-looking statements, there may be other factors that cause our results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that our forward-looking statements will prove to be accurate, as our actual results, performance or achievements could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on our forward-looking statements.
Alternative Performance Measures “C1 Cash Cost”, “Cash Cost” and “Adjusted Net Earnings” are Alternative Performance Measures. Alternative performance measures are furnished to provide additional information. These performance measures are used by management to monitor performance, to plan and to assess the overall effectiveness and efficiency of mining operations. These performance measures 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 included in the Company’s unaudited condensed interim consolidated financial statements prepared in accordance with IFRS.
Currency All amounts are in US$ unless otherwise specified.
Cautionary Note Forward Looking Information
3
Minto Yukon, Canada
Pinto Valley Arizona, US
Cozamin
Zacatecas, Mexico
Santo Domingo
Region III, Chile
Kutcho
BC, Canada
Head Office BC, Canada
Stable cash flow generation from three mines
Financial flexibility to fund growth
Proven track record of sustainable growth
Low-risk copper producer focused on the Americas
About Capstone
A leading intermediate copper producer
4 4
Portfolio
PRODUCTION
Three operating mines
Production assets located in stable geographies in the
Americas producing >100 k tonnes of copper annually
Santo Domingo Region III, Chile CS 70%; KORES 30%
Kutcho British Columbia, Canada
DEVELOPMENT
Growth Projects
Disciplined approach to construction, offering significant
growth in planned copper production over next five years
Chile SQM - option to earn up
to 70% of Project Providencia
(3,500 sq km)
CS 70%; KORES 30% - 6 properties
EXPLORATION
Portfolio
Early-stage base metals exploration properties
Sho
rt t
erm
Lon
g te
rm
Pinto Valley Arizona, US 66.3 k tonnes copper1
Cozamin Zacatecas State, Mexico
20 k tonnes copper1
Minto Yukon, Canada 18.5 k tonnes copper1
1.±5%; see news release dated March 26, 2014.
5 5
Two-Tiered Growth Strategy
Capstone is well-positioned for profitable growth, supported by considerable financial flexibility
1. Robust organic growth potential Potential increase at Pinto Valley - PV3 scoping study underway
Further opportunities at operating mines
Advancing the Santo Domingo project
Building the exploration portfolio
2. Growth through strategic acquisition
Maintain disciplined, well-balanced approach with a conservative and flexible balance sheet
Low-risk, mining-friendly jurisdictions in the Americas
Copper asset in or near production
6 6
Pinto Valley Mine
Operating copper mine in Globe-Miami district of Arizona:
Asset diversification into one of the world’s most favorable mining jurisdictions for tax, regulation and labour
Commenced operation in 1975
Fully permitted with established infrastructure and skilled workforce
$194M restart capital spent by BHP in 2012
Brand new mining fleet, mill upgrades, crushing plant, control systems, infrastructure
Large, long life producing Copper Mine Acquired in October 2013 from BHP for $650M
7 7
Pinto Valley Mine
Open Pit Mine in Arizona, US
Mine life (years) 12
Production – 2014 Guidance (k tonnes Cu ±5%) 66.3
Production1 – Nine Months 2014 YTD (k tonnes) 51.2
C1 cash cost2 – Six Months 2014 YTD ($/payable lb Cu) $2.10
C1 cash cost2 – 2014 guidance ($/payable lb Cu) $1.90 - $2.00
Measured & Indicated contained copper3 (k tonnes) 4,765
By-products Mo, Ag
Pinto Valley added 57 thousand tonnes of copper annually for over 12 years
Key Points
PV2 mine plan represents only 16% of the total M&I Resource
Work underway to evaluate possible mine life extension beyond 2026 and potential increase in throughput
Potential for meaningful impact on production and growth
PV2 PFS does not include all the projected impact of process improvements
1. Includes concentrate and cathode. 2. C1 Cash Cost is an Alternative Performance Measure, which is net of by-product credits as well as treatment and selling costs. 3. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. Mineral Reserves and Resources take into account mining activities until January 1, 2014, and are reported above 0.18% Cu Cut-off Grade. . See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
8 8
PV2 Pre-Feasibility Summary & Mine Plan – March 2014
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
0
5
10
15
20
25
30
35
40
45
50
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Co
pp
er G
rad
e %
Mat
eria
l Min
ed (
M t
/yea
r)
Total Material Moved
Capital Expenditure ($M) 47 62 12 12 9 11 14 6 5 5 3 2 0
Payable Copper (k tonnes) 64.1 54.8 65.1 55.8 56.2 54.1 57.0 56.1 54.7 52.3 59.7 41.0 12.0
Summary of March 2014 PV2 PFS
Mine Life (years) 12.3
Mineral Resources 1,563mt@0.30%1
Mineral Reserves 232mt@0.33%
Planned Throughput (ktpd) 50 - 52
Avg. Annual Production – Contained in Concentrate (M lbs) 119.5
Avg. Annual Production – Cathode (M lbs) 6.3
Est. LOM Avg. C1 Cash Costs $2.00
LOM Sustaining Capital ($ millions) $187.9
After-tax NPV, 8% ($M) $738
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. Mineral Reserves and Resources take into account mining activities until January 1, 2014, and are reported above 0.18% Cu Cut-off Grade. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
9
Ramp-up to 50 ktpd Stabilize at 50 ktpd
2012-2013 Restart 2014 Stabilize
Increase throughput to 52 ktpd
2016+ Optimize
Pinto Valley Improvement Strategy Underway
Upcoming Catalysts
Focus on improving reliability and costs
Scoping study for PV3 underway
Extended mine life
Expanded production
Engage and empower workforce to improve site performance
Leverage existing organizational structure to facilitate continuous improvement
Town of Miami
Pinto Valley
Freeport Miami
KGHM Carlota
BHP Copper Cities
BHP Miami
Source: Google maps.
10 10
Cozamin Mine
Underground Mine in Zacatecas State, Mexico
Mine life remaining (years) 6.5
Production – 2014 guidance (k tonnes Cu ±5%) 20.0
Production – Nine Months 2014 YTD (k tonnes) 15.2
C1 cash cost1 – Six Months 2014 YTD ($/payable lb Cu) $1.23
C1 cash cost1 – 2014 guidance ($/payable lb Cu) $1.30 - $1.40
By-products Zn, Pb, Ag
1. C1 Cash Cost is an Alternative Performance Measure, which is net of by-product credits as well as treatment and selling costs. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
Ongoing exploration program
2014 2015
Silver stream sale expires April 2017 to significantly
improve economics (currently ~1.5M oz/year)
2017+
11 11 1. C1 Cash Cost is an Alternative Performance Measure, which is net of by-product credits as well as treatment and selling costs. 2. Mineral Reserves and Resources take into account mining activities until December 31, 2013, and are reported above a 0.5% Cu COG (Underground Mineral Reserves reported above a $64.40 NSR COG). See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
Mine life remaining (years) 7
Production - 2014 guidance (k tonnes Cu ±5%) 18.5
Production – Nine Months 2014 YTD (k tonnes) 15.1
C1 cash cost1 – Six Months 2014 YTD ($/payable lb Cu) $2.20
C1 cash cost1 –2014 guidance ($/payable lb Cu) $2.45 - $2.55
Life of mine projected C1 cash cost1 $1.92
By-products Au, Ag
Mineral Reserves 9,509mt@1.65%2
Mineral Resources 49,259mt@1.10%2
Open Pit & Underground Mine in Yukon, Canada
Minto Mine
Higher grade ore feeding mill through Q3. Permit application
filed for all remaining Mineral Reserves.
Minto North high-grade ore to feed mill in 2015.
2014 2015
Significant production from high-grade Minto North pit.
2016
12 12
Santo Domingo Project
Copper-Iron Development Project in Region III, Chile
Diego de Almagro
Project Area
Superior infrastructure
7 kms from town, power lines & sub-station
110 kms from port
Low elevation (~1,000 masl)
Paved road access
Low environmental risk
13 13
Santo Domingo – July 2014 Feasibility Study
Unlevered Internal Rate of Return of 17.9% (27.3% assuming $1B project debt or 60% leverage)
$797 million after-tax NPV, discounted at 8%
18-year mine life, 128M lbs Cu, 4.2 Mt Fe, 16 k oz Au annually
Off-take agreements committed for 50% of Cu and Fe LOM
LOM by-product C1 cash costs1 negative $0.06/lb payable Cu
LOM co-product C1 cash costs1 $1.50/lb payable Cu
Attractive opportunity in a community that demonstrates strong support for the project
Confirms the value as a robust, low cost copper project
A long-life, low cost copper project
1. C1 Cash Cost is an Alternative Performance Measure. C1 Cash Cost on a by-product basis includes gold and iron credits. See Forward-Looking Statements and
Cautionary Note for NI 43-101 information.
14 14
Santo Domingo FS – CAPEX & Funding
CAPEX1,2
Initial cost $1.7B
Sustaining Capital: $368M
Mine $157M
Process Plant
$380M
Pipelines $172M
Plant / Mine Infrastructure
$163M
Port $180M
Contingency$242M
EPCM $115
Indirect Costs $290
1. Source: Santo Domingo Project; Region III, Chile; NI 43-101 Technical Report on Feasibility Study dated July 8, 2014, 100% basis. 2. Accuracy range of -10% to +15% for capital costs and operating costs. 3. Illustration based on feasibility study capital of $1.7B and assumed project debt of 65%.
Partnership & Funding Structure3
Owned 70% Capstone and 30% Korea Resources Corporation (KORES)
KORES largest Capstone shareholder (11%)
LOM off-take agreement for 50% of Cu & Fe magnetite concentrate on then prevailing market terms
KORES to participate in arranging debt financing
65% Project Debt
$1,105M
CS Equity $416M
KORES Equity $179M
15
Santo Domingo Project – Development Plan
Decision on if, how, and when to proceed will depend on many factors
Power and infrastructure
Attractive economics
Financing plan and risk mitigation
Strong social license & regulatory support
Other attractive production opportunities
1. Subject to the commercial and regulatory environment in Chile and not within Capstone’s control. Various decisions are dependent on the availability of low cost power as well as regulatory approval, and clear demonstration of an economically viable project with appropriate financing in place and a supportive environment for development.
Power purchase agreement
Finalize maritime concession for port
Stage-gate 1 - EIA approval (Q1)
Stage-gate 2 – Engineering 60-65% complete (Q3)
2014 2015
Stage-gate 3 - Engineering effectively complete (Q1)
Production estimated +2 years from construction decision
2016+
Next Steps1
Proceeding in a disciplined manner with a stage-gate process for decision making
16 16 1. Assumes a positive construction decision on Santo Domingo with commissioning in 2017 (Capstone 70% ownership – based on FS dated July 8, 2014); does not include by-product metal production at any mine or project. 2. C1 cash costs for 2015 and beyond do not factor in deferred stripping and movements in ore stockpile for Minto. 3. C1 Cash Cost is an Alternative Performance Measure. See Forward-Looking Statements and Cautionary Note for NI 43-101 information
Cu P
roducti
on (
k t
onnes)
C1
Cas
h C
ost
/lb
3 o
f Pa
yab
le C
u P
rod
uce
d
2,3,4
Strong Projected Organic Growth Profile(1)
Potential for significant cash flow generation
3
$0.00
$0.50
$1.00
$1.50
$2.00
0
50
100
150
200
2012 2013 2014 2015 2016 2017 2018
Cozamin Minto Pinto Valley Santo Domingo 70% C1 Cash Costs3 2
17 17
Financial Position
At June 30, 2014 ($M)
Cash $128.5
Undrawn Credit Facilities $ 67.2
Total Liquidity $195.7
Op Cash Flow Before Changes in Working Capital (1H 2014)
$104.7
Conservative and flexible financial position
1. Represents pre-stripping of Minto North; set to begin on August 15, 2014, contingent upon receipt of the necessary permits and licenses.
2014E Capex ($M)
Pinto Valley Cozamin Minto Santo Domingo Kutcho
Sustaining Development Total
$22.0
$18.0
$17.4
$24.8
$3.0
$16.1(1)
$20.9
$0.9
$123.1
18 18
Sho
rt t
erm
Pinto Valley Focus on cost efficiencies and potential mine life extension
Cozamin Reliable production with ongoing exploration
Minto Mine plan to optimize production and minimize cost
Santo Domingo Advance engineering and secure power; next stage-gate decision point in Q1 2015
Exploration Focus on 350,000 hectare property in Chile
Acquisition Criteria Copper, in production, in the Americas
2014 and beyond
Capstone Is Well-Positioned For Profitable Growth
A leading intermediate copper producer
19 19
Appendix
1. Board of Directors
2. Senior Management Team
3. Financial & Operating Results
4. Revolving Credit Facilities
5. C1 Cash Costs
6. Mine Cost Breakdown
7. 2014 Operating Guidance
8. 2014 Capital Expenditure Guidance
9. Historical Financial Performance
10. Historical Operating Performance
11. Record of Growth in Mineral Resource Base
12. History of Pinto Valley Mine
13. Minto Mineral Reserve and Mineral Resource Areas
14. Minto Mineral Resources and Underground Development
15. Santo Domingo July 2014 Feasibility Study Summary
16. Proposed Power Expansions in Regions of Santo Domingo
17. Project Providencia - Key Deposits in Analogous Metallogenic Settings
18. NI 43-101 Information
20 20
Board of Directors
Name Experience
Lawrence Bell Former Chairman & CEO of BC Hydro, Director of Silver Wheaton
George Brack - Non-Executive Chairman Mining & investment banking, former industry head of Scotia Capital
Chantal Gosselin Former VP & Portfolio Manager of Goodman Investment Counsel. Previously with Sun Valley Gold LLP, Blackhawk Mining & Pan American Silver
GookHo Lee Executive Advisor for KORES. Formerly with LS-Nikko Copper Inc., LG-Nikko Copper Inc. & LG Metal Co. Ltd.
Kalidas Madhavpeddi President of Azteca Consulting LLC & CEO of Forex Investment Group. Former Sr. VP Business Development of Phelps Dodge
Dale Peniuk - Audit Committee Chairman Financial & board expertise, former Partner with KPMG
Darren Pylot - President, CEO & Director Founder of Capstone Mining Corp.
Richard Zimmer Former President & CEO of Far West Mining. Previously with Teck & Bow Valley Industries
21 21
Senior Management Team
Name Experience Years
Experience Years Mining Experience
Darren Pylot, President, CEO & Director Founder of Capstone Mining Corp. 20 20
Jim Slattery, Sr VP & CFO Former CFO of Imnet Mining, Wescast Industries & Canadian General Tower 33 9
Gregg Bush, Sr VP & COO Former COO of Minefinders, Mine GM & Operations of Barrick/Placer Dome, 12 years in Chile
30 30
Brad Mercer, Sr VP Exploration Formerly with Sherwood Copper Corp., Miramar Mining & Royal Oak 30 30
Robert Blusson, VP Finance Formerly with Lundin Mining & EuroZinc 12 8
Cindy Burnett, VP IR Formerly with Western Lithium, Skye Resources, Ivanhoe Energy & Nova Chemicals 35 6
Peter Hemstead, VP Mktg. & Treasurer Formerly with Sherwood Copper Corp. & PricewaterhouseCoopers LLP 18 8
Jason Howe, VP Business Development Co-founder & former CFO of Silverstone Resources Corp. Formerly with PricewaterhouseCoopers LLP
20 10
Wendy King, VP Legal, Risk & Governance
Former Sr. VP General Counsel, Government Relations, Chief Compliance Officer and Corporate Secretary with Central 1 Credit Union & Weyerhaeuser Company
18 1
Guy Le Bel, VP Evaluations Formerly with Quadra Mining, BHP Billiton Base Metals, Rio Algom & Cambior Inc. 30 30
Gillian McCombie, VP HR Formerly with Placer Dome, Hunter-Dickinson & TELUS 18 14
David Sinitsin, VP Technical Services Formerly with Canaco Resources, Silver Standard Resources & Freeport-McMoRan 30 30
Brad Skeeles, VP North American Operations
Formerly with Newmont Mining, INCO & BHP Billiton 26 26
22 22
Financial & Operating Results
1. These are Alternative Performance Measures. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
Q2 2014 Q2 2013
Revenue ($M) $171.7 $58.3
Copper in concentrates produced (tonnes) 27,212 8,765
Copper cathode produced (tonnes) 526 -
Payable copper produced (tonnes) 26,785 8,419
C1 cash cost1 ($ per payable lb of Cu produced) $2.03 $1.70
Copper sold (tonnes) 24,563 7,783
Realized copper price ($ per lb sold) $3.36 $3.16
Net earnings ($M)
Per common share: $16.6 $0.04
$9.2 $0.02
Adjusted EBITDA1 ($M)
Per common share: $64.8 $0.17
$28.8 $0.08
Operating cash flow before changes in working capital1 ($M)
Per common share: $56.5 $0.15
$28.6 $0.08
Net debt (cash)1 ($M) $181.0 ($456.3)
23
Senior Secured Senior Secured Reducing
Amount $200 million $200 million
Term 4 years from October 2013 2.5 year from October 2013
Interest Rate US Libor + 2.5%
Standby Fee 0.56%
Payment Schedule
Interest only 8 equal quarterly payments starting April 4, 2014
Covenants
EBITDA/Interest Expense ≥ 3.00:1:00 Senior Secured Debt/EBITDA not more than 3:00:1:00
Total Debt/EBITDA not more than 4:00:1:00
Initial Use
$87.2 million supporting letters of credit for PV reclamation, remainder fully drawn for Pinto Valley purchase and working capital purposes
Fully drawn for Pinto Valley purchase
Balance as at June 30, 2014
$133 million $178 million
Revolving Credit Facilities
At June 30, 2014
24 24
C1 Cash Cost(1) Q2 2014
Pinto Valley Minto Pinto Valley + Cozamin + Minto
$1.24
$0.33 ($0.34)
$1.23
$2.35
$2.46
$1.76
$2.03
Tota
l C
onsolid
ate
d C
1 C
ash C
ost1
($ p
er
paya
ble
lb o
f C
u p
roduced)
Operating costs + By-product credits = Treatment & selling costs - C1 Cash Cost/lb1
$0.27
$0.39 ($0.12)
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
Cozamin
$1.74
$0.44 $2.13
$(0.05)
$(0.16)
1. C1 Cash Cost is an Alternative Performance Measure, which is net of by-product credits as well as treatment and selling costs.
25 25
Mine Cost Breakdown(1)
1. Cost of production in US$ for the 8 months ended as of August 30, 2014. Excluding by-product credits and TCRCs
Pinto Valley
Cozamin Minto
Consolidated
26%
27% 15%
8%
8%
13%
3%
Salaries Contractors & Consultants Maintenance Diesel, Gas & Lubricants Power Consumables Other G&A
26%
20%
19%
8%
8%
16%
3%
31%
25% 15% 3%
10%
12%
5%
24%
45%
6%
11%
4% 6% 4%
26 26
2014 Operating Guidance
1. This is an alternative performance measure, please see “Alternative Performance Measure” definition at the beginning of this presentation.
Pinto Valley Cozamin Minto Total
Tonnes milled (M) 18.2 1.2 1.4 20.8
Copper grade (%) 0.39 1.85 1.49 0.55
Copper recovery (%) 88.5 93.4 92.4 89.0
Production (contained in concentrates)
Copper (tonnes) 63,500 20,000 18,500 102,000
Copper cathode (tonnes) 2,800 - - 2,800
Zinc (tonnes) - 9,000 - 9,000
MoS2 (000s lbs) 660 - - 660
Lead (tonnes) - 1,700 - 1,700
Silver (million ounces) 0.3 1.6 0.2 2.1
Gold (ounces) - - 17,670 17,670
C1 cash costs per pound of payable copper produced net of by-product credits and selling costs1
$1.90 - $2.00 $1.30 - $1.40 $2.45 - $2.55 $1.90 - $2.00
27 27
2014 Capital Expenditure Guidance
1. Pre-stripping of Minto North is set to begin on August 15, 2014, contingent upon receipt of the necessary permits and licenses. 2. Represents Capstone’s 70% share of capital expenditure.
Capital Expenditure Breakdown ($M) Pinto Valley Cozamin Minto
Santo Domingo2 Kutcho Total
Sustaining 22.0 18.0 17.4 - - 57.4
PV2 Capital 24.8 - - - - 24.8
Brownfield Exploration - 3.0 - - - 3.0
Deferred Stripping1 - - 16.1 - - 16.1
Development Projects - - - 20.9 0.9 21.8
Total 46.8 21.0 33.5 20.9 0.9 123.1
Pinto Valley $46.8
Cozamin $21.0
Minto $33.5
Santo Domingo
$20.9
Kutcho $0.9
2014 Capital Expenditure Guidance
$123.1M budgeted for capital expenditures in 2014
$26.5M spent six months 2014 YTD
An additional $10.1M budgeted for greenfield exploration in 2014
$3.5M spent six months 2014 YTD
28 28
Historical Financial Performance
$162
$250
$301
$353 $306
$332 $333
$0
$50
$100
$150
$200
$250
$300
$350
$400
2008 2009 2010 2011 2012 2013 Six Months2014 YTD
Revenue3 ($M)
$36
$117 $103
$146 $142
$106 $121
$0
$20
$40
$60
$80
$100
$120
$140
$160
2008 2009 2010 2011 2012 2013 Six Months2014 YTD
Adjusted EBITDA1,3 ($M)
$0
$20
$40
$60
$80
$100
$120
$140
2008 2009 2010 2011 2012 2013 Six Months2014 YTD
Capital Additions2,3($M)
1. This is an Alternative Performance Measure. 2. Includes deferred stripping at Minto. 2008 capex includes $13 million from old Capstone for 9 months in 2008. 3. The total 2008 information only includes results from the Cozamin Mine from November 24, 2008 to December 31, 2008. Year end 2010, 2011 and 2012 in accordance with IFRS. 2008 figures pro forma for combination with Sherwood Copper to include Cozamin and Minto for the full year.
$28
$94
$75
$120 $114
$86
$105
$0
$20
$40
$60
$80
$100
$120
$140
2008 2009 2010 2011 2012 2013 Six Months2014 YTD
Operating Cash Flow Before Changes in Working Capital3 ($M)
$33
$59 $56
$85
$121 $123
Deferred Stripping
Capital Additions
$27
29 29
Historical Operating Performance
29,892
38,691 33,022
35,879 35,834
45,405 51,164
0
10,000
20,000
30,000
40,000
50,000
60,000
2008 2009 2010 2011 2012 2013 Six Months2014 YTD
Copper Sold (tonnes)
$2.36 $2.31
$3.42 $3.90 $3.66
$3.30 $3.17
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
2008 2009 2010 2011 2012 2013 Six Months2014 YTD
Realized Price/lb of Copper Sold ($)
$1.25 $1.03
$1.40 $1.45 $1.50 $1.72
$1.96
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
2008 2009 2010 2011 2012 2013 Six Months2014 YTD
C1 Cash Cost1,2 ($ per payable lb of Cu produced)
$1.11 $1.28
$2.02
$2.45 $2.16
$1.58 $1.21
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2008 2009 2010 2011 2012 2013 Six Months2014 YTD
47% 55% 59% 59% 48% 63% 38%
Cash Margin/lb of Copper Sold ($)
1. This is an Alternative Performance Measure. * Commencing in 2011, financial results in accordance with IFRS. 2. The total 2008 information only includes results from the Cozamin Mine from November 24, 2008 to December 31, 2008, except for the C1 Cash Cost per pound of payable copper which are for the full year.
30 30
Proven Track Record of Growth in Mineral Resource Base
Minto
Cozamin
CS Total
* Includes Mineral Resources and Reserves as at January 1, 2014 . 70% share of Santo Domingo Mineral Resources as at August 31, 2012 and Mineral Reserves as at May 2, 2014. Kutcho as at Dec. 31, 2010. See Forward-Looking Statements and Cautionary Note for NI 43-101 information
Minto
Kutcho
Santo Domingo
Minto
Cozamin
CS Total
Kutcho
Minto
Cozamin
Santo Domingo
CS Total
CS Total
CS Total
CS Total
Santo Domingo Santo
Domingo
Cozamin Cozamin
Cu tonnes in Mineral Reserves* Per Share
Cu
to
nn
es/s
har
e (b
asic
)
Kutcho Kutcho
Santo Domingo
Kutcho
Minto
Cozamin
Pinto Valley
0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
0.016
0.018
0.02
2008 2009 2010 2011 2012 2013 YTD
Cu tonnes in M&I Mineral Resources* Per Share
Cu
to
nn
es/s
har
e (b
asic
) 383%
0
1000
2000
3000
4000
5000
6000
7000
8000
2008 2009 2010 2011 2012 2013 YTD
1084%
0
500
1000
1500
2000
2500
3000
2008 2009 2010 2011 2012 2013 YTD
1107%
Tho
usa
nd
s (t
on
nes
)
Cu tonnes in Mineral Reserves* Cu tonnes in M&I Mineral Resources*
Tho
usa
nd
s (t
on
nes
)
Minto Cozamin
Minto
Kutcho
Santo Domingo
Minto
Kutcho
Minto
Cozamin
Santo Domingo
Santo Domingo
Cozamin Cozamin
Kutcho Kutcho
Santo Domingo
Kutcho
Minto Cozamin
Pinto Valley
Minto
Cozamin
Kutcho
Santo Domingo
Pinto Valley
Santo Domingo
Kutcho
Minto Cozamin
Santo Domingo
Pinto Valley
Santo Domingo
Kutcho
Cozamin Minto Cozamin Cozamin Cozamin
Minto Minto
Kutcho
Minto
Cozamin
Kutcho Minto Minto
Cozamin Cozamin Minto Kutcho Kutcho
0
0.001
0.002
0.003
0.004
0.005
0.006
0.007
2008 2009 2010 2011 2012 2013 YTD
314%
31 31
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
0
25
50
75
100
125
150
175
200
225
250
19
75
19
76
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
Histo
rial Cu
Price (U
s$/lb
) H
isto
rial
Cu
Pro
du
ctio
n (
mlb
s)
PV Cu Production Average Cu Price
BHPB restarts
PV
Capstone acquires PV
History of Pinto Valley
PV acquired by Newmont subsidiary and placed PV on
care and maintenance
Source: BHP Copper. 1.Source: BHP Copper, in US$M. 2. The cost of employing contractors during project execution.
Pinto Valley Historical Production/Copper Prices
PV production commenced by owner Cities Service (formerly
Tennessee Corporation)
Newmont announced plans to restart PV
BHP Copper acquired PV
BHP placed PV on care and maintenance due to
temporarily low copper prices
PV operations restarted
BHPB placed PV on care and maintenance
due to temporarily low copper prices
Mine Fleet $63.8 (33%)
Processing $43.7 (22%)
Owner Cost $27.1 (14%)
Infrastructure $21.2 (11%)
EPCM $14.2 (7%)
SMARRCO $11.4 (6%)
Contractors' Indirect (2) $8.9 (5%)
Mine $3.9 (2%)
2012 Re-start Capital Cost
BHP Billiton $194mm(1) re-start capital incorporated lessons learned from previous re-start
Acquired new mining fleet
Upgraded electrical and controls
Significantly improved plant conditions to HSEC standards
In-sourced mining
32 32
>3% Cu over ≥5m
>2% Cu over ≥5m
>1% Cu over ≥5m
>0.5% Cu over ≥5m
All other drill holes >50
Deposit Area
Exploration Corridor
Fault
All Weather Gravel Road
Creeks and Streams
Mineral Reserves & Resources
Other Deposits
Mining Complete
LEGEND
Mill Camp
N
500
meters
Inferno North (extension of Minto North)
Minto North
Inferno
Fireweed (extension of Minto East)
Minto South
Minto Main
Area 2/118
Copper Keel
A’
A
Wildfire/ Copper Keel NE
Minto East Key Points Current Mineral Resource/Reserve
has a 3.5 km strike length
Other underground geophysical and geological targets exist
Minto Mineral Reserve & Mineral Resource Areas
Ridgetop
33 33
Mineral Reserves and Resources
Minto Main
Area 2/118
Copper Keel
Minto East
Wildfire N S
Fireweed
Mining Complete
Inferno North
700masl
500masl
900masl
Ridgetop Minto North
Minto Mineral Resources & Underground Development
Minto Permitting and Mining Phases
I – III: Minto Main pit mining completed Q2 2011, stockpiles processed until Q2 2012
IV: Current Mining - Area 2/118 mined by open pit and underground
V: Minto North to be mined by open pit; Minto East by underground
VI: PFS Q3 2012 added Copper Keel and Wildfire underground Mineral Reserves
Other Deposits
34 34
Santo Domingo – July 2014 Feasibility Study Summary
Summary of July 2014 FS1,2
Mine life (years) 18
Average annual production
LOM Avg: 128M lbs Cu, 4.2 Mt Fe, 16 koz Au First 5 years: 248M lbs Cu, 3.3 Mt Fe, 35 koz Au
Planned throughput (tpd)
LOM Avg: 60,500 First 5 Years: 65,000
Development capital
$1.7B
Investment return (after tax)
IRR: 17.9% NPV @ 8% discount rate: $797M
Payback: 4.2 years
By-products Fe, Au
Metal price assumptions
Cu: $2.85/lb Fe: $1.31/dmtu ($85/t conc. @ 65% Fe)
Au: $1,275/oz
1. Source: Santo Domingo Project; Region III, Chile; NI 43-101 Technical Report on Feasibility Study dated July 8, 2014, 100% basis. 2. The report was compiled by AMEC’s Santiago office with an accuracy range of -10% to +15% for capital and operating costs. The estimates presented in the FS are current as of October 2013. 3. C1 Cash Cost is an Alternative Performance Measure. C1 Cash Cost on a by-product basis includes gold and iron credits. See Forward-Looking Statements and Cautionary Note for NI 43-101 information
Estimated C1 cash cost3
LOM Avg: $ per payable lb of Cu produced
negative$0.06
First 5 years: $ per payable lb of Cu produced
$0.49
Low-risk and relatively low-cost approach to increase value and maintain optionality
35 35
Proposed Power Expansions in Region of Santo Domingo
Connecting to Australis Power led Octopus Project at Penco (700 MW) and Alto Maipo hydro project (531 MW, SIC, US$700M)
Codelco (760 MW, US$758M) and BHP (517 MW, US$600M, planned for 2016) natural gas-fired combined cycle plants; GDF Suez (750 MW) coal plants and 500 kW line
Endesa Punta Alcalde coal-fired plant approved Jan 17, 2014 (740MW, SIC, US$1.4B)
Transelec substation upgrade
LINES - kV
Under construction
Proposed
110
66 or less
Node
TO SANTIAGO
HUASCO
COPIAPO
DIEGO DE ALMAGRO
CHAÑARAL
SANTO DOMINGO
MEJILLONES
Cardones
TALTAL
Senate approves SIC-Sing interconnection Jan. 9, 2014. Includes both operating and in-construction projects (1,500 MW, US$700M, 610 km)
36 36
Project Providencia – Region III Chile
2
Key Deposits in Analogous Metallogenic Settings 1 IOCG Deposits – (Jurassic Volcanic Arc)1,3 Mantoverde District Santo Domingo Julia Reventon
2 IOCG Deposits - (Cretaceous Volcanic Arc)1,3 Candelaria Mantos Blancos Casualidad Teresa De Colmo Franke Altamira
2 & 3 Porphyry Deposits – (Cretaceous Volcanic Arc)2,3 Spence Mine Virgo Sierra Overa
Younger Older
IOCG Casualidad
Porphyry Virgo S.O.
1. Chile’s IOCG deposits are related to early - mid Cretaceous magmatic activity but the host rocks may be older. 2. Late Cretaceous Age. 3. The blue, green and pink rocks in belts 1 & 2 are highly prospective for IOCG and for Cretaceous Age porphyry Cu deposits. These prospective rocks are inferred to continue under gravel cover (clear areas) and beneath Paleocene-Eocene volcanic rocks (dark greens on east side of map).
Option Boundary
Atacama Fault
IOCG? Franke Altamira
1
3 IOCG Julia Reventon
120 kms
14
5 km
s
Project Providencia lies ~80 kilometres north of Santo Domingo
(3,500 sqkm)
37 37
Unless otherwise indicated, Capstone has prepared the technical information in this presentation (“Technical Information”) based on information contained in the technical reports and news releases (collectively the “Disclosure Documents”) available under Capstone Mining 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” or “QP”) as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI 43-101”). For readers to fully understand the information in this presentation, they should read the Technical Reports (available on www.sedar.com) in their entirety, including all qualifications, assumptions and exclusions that relate to the information set out in this presentation 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 technical information in this presentation has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101") and reviewed by Brad Skeeles, P.Eng. VP of North American Operations (Technical Information related to mining and production) and Brad Mercer, P. Geol., Senior Vice President, Exploration (Technical Information related to mineral exploration activities), and reviewed and approved by Gregg Bush, Senior Vice President and Chief Operating Officer for Capstone Mining, all QP’s under NI 43-101. This presentation summarizes some of the information contained in the Pinto Valley Mine 2014 Pre-Feasibility Study, dated April 28, 2014 , that was directed by Capstone with contributions from Kirkham Geosystems Ltd. (geology, Resource estimation), Independent Mining Consultants Inc. (reserve, geotechnical, mine design and schedule, equipment selection), KWM Consulting Inc. (metallurgy, mill operation), AMEC Environment & Infrastructure Inc. (tailings), Stantec (Infrastructure and PFS report compilation), SRK (US), Inc. (environmental), and Adam M Consulting Inc. (financial modelling). Personnel from each of these companies will be signing off as a QP as defined in NI 43-101 for their specific responsibilities. The following QP’s will author the technical report: Mel Lawson, P.E. of Stantec, Garth Kirkham, P.Geo. of Kirkham Geosystems Ltd., John Marek P.E. of Independent Mining Consultants, Inc., Ken Majors P.Eng. of KWM Consulting Inc, Tony Freiman, P.E. of AMEC Inc., Adam Majorkiewicz, P.Eng of Adam M Consulting Inc. and Cori Hoag C.P.G. of SRK. The January 1, 2014 Mineral Resource estimate reported herein for the Pinto Valley property was prepared by Garth Kirkham, P. Geo, Kirkham Geosystems Ltd., an independent QP. Based on the Mineral Resource Estimate, a standard methodology for pit limit analysis, mining sequence, and cut-off grade optimization, including application of mining dilution, process recovery, economic criteria and physical mine and plant operating constraints, has been followed to design the Pinto Valley pit and determine the Mineral Reserve Estimate dated January 1, 2014. This presentation summarizes some of the information contained in the NI 43-101 Technical Report on the Cozamin Mine, Zacatecas, Mexico dated July 31 , 2014. The following QP’s were responsible for the preparation of their relevant portions of the Technical Report: Patrick Andrieux, PhD., P.Eng. (Itasca Consulting Group. Inc), Dave Hallman, PE (Tetra Tech, Inc), Jenna Hardy, P.Geo. (Nimbus Management Ltd.), Mel Lawson, SME-RM (Stantec Consulting International LLC), Ken Major, P.Eng. (KWM Consulting Inc.), Vivienne McLennan, P.Geo. (Capstone Mining Corp.), Allan Schappert, SME-RM (Stantec Consulting International LLC), Ali Shahkar, P.Eng. (Lions Gate Geological Consulting Inc.), Robert Sim, P.Geo. (Sim Geological Inc.), Brad Skeeles, P.Eng. (Capstone Mining Corp.), and Jeremy Vincent, P.Geo. (Capstone Mining Corp.). This presentation summarizes some of the information contained in the Minto Phase VI Preliminary Feasibility Study Technical Report dated January 2012. Qualified Persons under National Instrument 43-101 responsible for this report: John Sagman, BASc., P.Eng., PMP, Wayne Barnett, Pr.Sci.Nat., SRK Consulting (Canada), Inc., John Eggert, P.Eng, Eggert Engineering Ltd; Bruce Murphy, P.Eng., SRK Consulting (Canada), Inc.; Bill Hodgson, P.Eng., Genivar Inc.; Garth Kirkham, P. Geo, Kirkham Geosystems Ltd; Michael Levy, PE, SRK Consulting (Canada), Inc.; Brad Mercer, P.Geol. Capstone Mining Corp.; Pooya Mohseni, P.Eng. Minto Exploration; Marek Nowak, P.Eng., SRK Consulting (Canada) Inc.; and Colleen Roche, P.Eng. Capstone Mining Corp. who are responsible for certain sections of the PFS as detailed in the PFS. This presentation summarizes some of the information contained in the Santo Domingo Project; Region III, Chile; NI 43-101 Technical Report on Feasibility Study dated July 8, 2014, 100% basis. The following QP’s were responsible for the preparation of their relevant portions of the Technical Report based on the Feasibility Study: David Frost, F.AusIMM (AMEC Ingeniería y Construcción Ltda.), Hans Gopfert, P.Eng (AMEC Ingeniería y Construcción Ltda.), Joyce Maycock, P. Eng (AMEC Ingeniería y Construcción Ltda.), Vikram Khera, P. Eng (AMEC Ingeniería y Construcción Ltda.), Anna Klimek, P.Eng (AMEC Ingeniería y Construcción Ltda.), Roy Betinol, P.Eng. (BRASS Chile S.A.) -- Seawater and Magnetite Concentrate Pipeline System, Carlos Guzmán, F.AusIMM (NCL Ingeniería y Construcción Ltda.) -- Mineral Reserve Model, Mine Equipment and Mine Development , Tom Kerr, P.Eng. (Knight Piésold S. A.) - Tailings Storage Facility, David Rennie, P. Eng (Roscoe Postle Associates Inc.) -- Mineral Resource Model. The technical information in the July 8,2014 report was reviewed by Court Muggli, P.E., Project Director, Capstone Mining Corp., and Gregg Bush, P. Eng., Senior Vice President and Chief Operating Officer, Capstone Mining Corp., both QP’s under NI 43-101.
Compliance with NI 43-101
38
For additional information, please visit capstonemining.com or contact us at:
Phone: +1-604-684-8894
Toll Free: 1-866-684-8894
Email: info@capstonemining.com
Last updated October 09, 2014
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