Vancouver — Rising copper, zinc and lead production 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 a net profit of $5.8 million (7 a share) for the period, after accounting for $2 million in unrealized foreign exchange losses. Those losses were related to deferred revenue from a recent US$44-million deal to sell silver production for the next 10 years 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 the previous quarter due to both increased mill throughput and grades.
The company saw average sale prices of US$3.62 per lb. for copper, US$1.70 per lb. for zinc and US94 per lb. for lead during the period. Cash copper production costs came in at US61 per lb. after byproduct credits, plus smelter, refining, transportation and site costs.
Under a recently signed deal that saw Capstone receive US$20 million in cash plus US$24 million in Silverstone shares and special warrants, Capstone has agreed to deliver 10 million oz. silver over 10 years from Cozamin to Silverstone. Silverstone will pay US$4 per oz. or the market price for silver, whichever is lower.
At May 31, Capstone’s holdings in Silverstone were reported to have a $65-million market value.
During its latest quarter, Capstone 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.
Be the first to comment on "Strong base metals buoy Capstone’s Q3"