A Leading Intermediate Copper Producer January 2018 1
Cautionary Note On Forward Looking Information 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. In this document certain forward-looking statements are identified by words including “anticipation”, “guidance”, “plan” and “expected”. 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, amongst others, risks related to inherent hazards associated with mining operations, future prices of copper and other metals, compliance with financial covenants, surety bonding, our ability to raise capital, Capstone’s ability to acquire properties for growth, counterparty risks associated with sales of our metals, use of financial derivative instruments and associated counterparty risks, foreign currency exchange rate fluctuations, changes in general economic conditions, accuracy of mineral resource and mineral reserve estimates, operating in foreign jurisdictions with risk of changes to governmental regulation, compliance with governmental regulations, compliance with environmental laws and regulations, reliance on approvals, licences and permits from governmental authorities, impact of climatic conditions on our Pinto Valley, Cozamin and Minto operations, aboriginal title claims and rights to consultation and accommodation, land reclamation and mine closure obligations, 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, maintaining ongoing social license to operate, dependence on key management personnel, potential conflicts of interest involving our directors and officers, corruption and bribery, limitations inherent in our insurance coverage, labour relations, increasing energy prices, competition in the mining industry, risks associated with joint venture partners, our ability to integrate new acquisitions into our operations, cybersecurity threats, legal proceedings and other risks of the mining industry as well as those factors detailed from time to time in the Company’s interim and annual financial statements and management’s discussion and analysis of those statements, all of which are filed and available for review under the Company’s profile on SEDAR at www.sedar.com Although the Company has 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”, “all-in cost”, “fully-loaded all-in cost”, “adjusted net income/loss”, “operating cash flow before changes in working capital” and “net debt” are Alternative Performance Measures. Alternative performance measures are furnished to provide additional information. These non-GAAP performance measures are included in this presentation because these statistics are key performance measures that management uses to monitor performance, to assess how the Company is performing, 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. 2
About Capstone Low-risk copper producer focused on the Americas Cash flow generation from a portfolio of three mines Financial flexibility Proven track record of sustainable growth A leading intermediate copper producer 3
Solid Base with Growth on the Horizon Operations in Stable Jurisdictions +85k tonnes of copper over next 5 years 3 Operations Leverage Returning and Strong Balance Sheet 100% Cu exposure returns January 2018 Unhedged 2018 Net Debt Q3 2017 $185m Net Debt / EBITDA 1.18x Balance Sheet Net debt target $100m Building a balance sheet to grow 4
Pinto Valley Mine Open Pit Mine in Arizona, US Mine life remaining (years) 22 Q3 YTD 2017 Production (k tonnes) 41.2 Q3 YTD 2017 C1 Cash Cost 1,2 ($/payable lb produced) $2.01 Q3 YTD 2017 All-In Cost 1,2 ($/payable lb produced) $2.40 Q4 2017 Production (k tonnes) 16.1 2017 Full Year Production (k tonnes) 57.3 2018 Production Guidance (k tonnes) 56.0 2018 C1 Cash Cost Guidance 1,2 ($/payable lb produced) $1.95 By-products Mo, Ag Key Points Q4 2017 production ahead of plan on higher grade and recoveries 2018 throughput targeted at, or above, PV3 pre-feasibility study with focus on overall plant optimization Optimizing operations 1. C1 Cash Cost and All-In Cost are Alternative Performance Measures. See Forward-Looking Statements and Cautionary Note for NI 43-101 information. 2. C1 cash cost per pound of payable copper produced is net of by-product credits and selling costs. All-In cost per pound of payable copper produced is C1 cash cost plus NSR and production royalties, non-cash 5 deferred revenue, all sustaining capital expenditures (including exploration and cash portion of production-phase capitalized stripping), accretion of reclamation obligations, amortization of reclamation assets and PV3 development.
Pinto Valley Mine Plan PV3 mine plan more than doubles mine life, increases throughput and lowers operating costs without significant capital investment No significant changes moving from PV2 to PV3 Planning further 10% throughput expansion 2020/2021 with timeline aligned to permitting 60 M 0.60% 50 M 0.50% 40 M 0.40% Cu Grade Million Tonnes 30 M 0.30% 20 M 0.20% 10 M 0.10% 0 M 0.00% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 PV2 Ore PV3 Ore PV2 Waste PV3 Waste Cu Grade - Pinto Valley Mine Plan 6
Pinto Valley: Infrastructure Advantage Pinto Valley Copper Cities (BHP) Old Dominion (BHP) Miami (BHP) Carlota (KGHM) Miami (FCX) Evaluating regional resource opportunities Source: Bing maps and boundaries are approximated 7
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