Capstone sinks on lacklustre production outlook

Capstone Copper (TSX: CS; ASX: CSC) shares dropped after the company disclosed weaker-than-expected 2026 output targets due to lower grades at the Mantos Blancos operation and the lingering effects of a strike at Chile’s Mantoverde mine.

Consolidated copper production will range between 200,000 and 230,000 tonnes this year, Capstone said late Tuesday. That’s below the 244,000-tonne average forecast of financial analysts who track the company.

“Guidance missed our estimates (and consensus) and the inflection point for production and costs driven by Mantoverde now appear to be deferred to 2027,” Desjardins Capital Markets mining analyst Bryce Adams said Wednesday in a note. He cut its rating on the stock to “hold” from “buy,” citing the disappointing production targets.

Vancouver-based Capstone, one of the largest foreign copper miners in Chile, ranks ahead of other Canadian producers operating in the South American country. It remains a mid-tier producer when compared with Chile’s largest copper miners. 

Capstone shares fell 8.6% to C$13.63 Wednesday morning in Toronto, cutting the company’s market value to about C$10.4 billion ($7.6 billion). Earlier they touched C$12.94, their lowest level since December. The stock has traded between C$4.98 and C$18.04 in the past year.

Higher costs

Production costs should range between $2.45 and $2.75 per payable lb. of copper, Capstone also said, higher than the $2.33 forecast by analysts. The increased operating costs reflect inflation, rising sulphuric acid costs and the impact of mining lower-grade zones at both Mantos Blancos, in northern Chile, and Arizona’s Pinto Valley mine.

Operations at Mantoverde, Capstone’s top producing mine, were disrupted for about one month earlier this year when workers went on strike, cutting output to about 55% of normal production. Workers in the operation’s biggest union ratified a new three-year contract in early February.

Mantoverde delivered 95,000 tonnes of copper in 2025 and accounted for 44% of the company’s production, company documents show.

Capstone is pushing ahead with a debottlenecking plan that’s intended to lift Mantoverde’s daily mill capacity to 45,000 tonnes. The company estimates the cost at $176 million and says it could add about 20,000 tonnes a year of additional copper output. Capstone owns 70% of Mantoverde, compared with 30% for Japan’s Mitsubishi Materials.

Mantoverde is expected to produce between 89,000 and 102,000 tonnes of copper – including sulphides and cathodes – this year, Capstone said. Pinto Valley will produce between 42,000 and 48,000 tonnes of sulphides, compared with 38,000-44,000 tonnes for Mantos Blancos and 21,000-24,000 for Cozamin in Mexico.