Vancouver – Rising copper, zinc and lead output from its Cozamin mine in Zacatecas, Mexico coupled with strong metals prices propelled Capstone Mining (CS-T, CSFFF-O) to a strong third quarter performance.
The base metal miner posted Q3-2007 net profits of $5.8 million (7 a share) after accounting for $2-million in unrealized foreign exchange losses related to deferred revenue from a recent US$44-million transaction where it sold the next 10 years of its silver output to Silverstone Resources (SST-V, SVRCF-O).
For its latest quarter ending May 31st Capstone produced 3.5 million lbs. copper, 1.6 million lbs. zinc, and 600,000 lbs. lead along with 174,000 oz. silver, up about 25% from its prior quarter due to both increased mill throughput and grades.
The company saw average sale prices of US$3.62 per lb. copper, US$1.70 per lb. zinc and US$0.94 per lb. lead in Q3 for its metal output while reporting cash copper production costs of US$0.61 per lb. after by-product credits plus smelter, refining, transportation and all site costs.
Capstones silver output from Cozamin is now committed to Silverstone, which will be able to buy the refined metal at US$4.00 per oz., under a recently signed deal where Capstone received US$20-million in cash plus US$24-million in Silverstone shares and special warrants.
Its holdings in Silverstone were reported to have a $65-million market value as of May 31st.
During its latest quarter Capstone also completed a major expansion of the milling capacity at Cozamin, more than doubling it to 750,000 tonnes per year. A US$15 million mine expansion program has been budgeted to feed the increased processing capacity.
Additionally, about US$6 million for surface exploration and underground infill drilling has been earmarked at Cozamin for 2007.
Shares of Capstone slipped 8 to $2.67 per share on its Q3 earnings announcement but remains near the upper end of its 52-week trading range of $1.35-$2.98.
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