(All amounts in US$ unless otherwise specified)

VANCOUVER, British Columbia–(BUSINESS WIRE)–$CS #CS–Capstone Mining Corp. (“Capstone” or the “Company”) (TSX:CS) today announced production and financial results for the three (“Q2 2021”) and six months ended June 30, 2021 (“2021 YTD”). Copper production totaled 43.3 million pounds at consolidated C1 cash costs1 of $1.91 per payable pound of copper produced. Link HERE for Capstone’s Q2 2021 management’s discussion and analysis (“MD&A”) and financial statements and HERE for the webcast presentation.

Darren Pylot, President and CEO of Capstone commented, “This was a strong quarter with record copper production at Cozamin and completion of the majority of phase 2 PV3 Optimization work at Pinto Valley”. Mr. Pylot added, “We also published our 2020 Sustainability Report, which details our ESG-related programs and reaffirms our long-standing commitment to responsible mining practices.”

Raman Randhawa, SVP & CFO added, “Capstone has generated $205 million of operating cash flow2, so far in 2021 and with that, our net cash balance has increased to $172 million, plus we have an undrawn corporate revolver of $225 million. Cashing up at the forefront of our transformational growth phase will allow Capstone to execute on Santo Domingo and many other robust, high-impact projects”.


Net income of $49.4 million, or $0.12 per share and second quarter 2021. Adjusted net income1 of $68.7 million or $0.17 per share.

  • Record operating cash flow before changes in working capital1 of $140.4 million. Q2 2021 Operating cash flow before changes in working capital1 includes $30 million received from Wheaton Precious Metals Corp. (“Wheaton”) as part of the Santo Domingo precious metals purchase agreement (“Gold Stream Agreement”). Operating cash flow before changes in working capital1, excluding the $30 million payment from Wheaton, of $110.4 million was the highest in Capstone’s history, driven by production growth and record high copper prices.
  • Net cash1 grew by $126.7 million to $171.5 million during Q2 2021, inclusive of $30 million in proceeds from the Gold Stream Agreement. The balance sheet was significantly enhanced by solid operating performance and cash flow during Q2 2021.
  • Record adjusted EBITDA1 for Q2 2021 of $128.0 million. Q2 2021 adjusted EBITDA1 is reflective of Capstone’s strong operational performance and financial leverage of the Company’s EBITDA1 in a robust copper price environment.
  • Cozamin Mine underground expansion completed with record quarterly copper production of 13.8 million pounds and attained targeted new run rate of 3,780 tonnes per day (“tpd”).
  • Consolidated copper production of 43.3 million pounds at C1 cash costs1 of $1.91 per payable pound of copper produced. Consolidated copper production for the first half of 2021 (“H1 2021”) of 91.1 million pounds at C1 cash costs of $1.80 per payable pound of copper produced was at the mid-range of 2021 guidance.
  • Partnership discussions at Santo Domingo are advancing well and expected timeline for announcement is now in Q3 2021. Santo Domingo remains an attractive project as it retains a Decree Law 600 (“DL 600”) tax invariability agreement which is expected to protect the project from any potential mining royalty tax changes for the majority of the current Mineral Reserve life.
  • Commenced a brownfield exploration drilling program at Santo Domingo project to potentially expand the copper/iron ore mineralization resource and for geometallurgical samples for cobalt feasibility work.
  • Issued a Sustainability Report. Published the 2020 Sustainability Report, prepared in accordance with the Global Reporting Initiative Standards, Core option. This is Capstone’s fifth sustainability report and highlights our commitment to excellence in ESG practices by providing details relating to our programs and performance on topics material to our operations and projects.

1 This is an alternative performance measure; please see “Alternative Performance Measures” at the end of this release.

2 Operating cash flow before changes in working capital for the six months ended June 30, 2021 of $385 million, excluding upfront payments of $180 million from silver and gold streams is $205 million. Operating cash flow before changes in working capital is a non-gaap measure.

Operational Overview

Refer to Capstone’s Q2 2021 MD&A and Financial Statements for detailed operating results.


Q2 2021

Q2 2020

2021 YTD

2020 YTD

Copper production (million pounds)





Pinto Valley















Copper sales





Copper sold (million pounds)





Realized copper price ($/lb.)





C1 cash costs1 ($/lb.) produced





Pinto Valley
















Q2 2020 production was impacted by restrictions due to the COVID-19 government mandated decree


2021 YTD consolidated production of 91.1 million pounds of copper is at the mid-point of annual guidance of 175 to 190 million pounds of copper. The results are 22% higher than prior year, with Q2 2021 benefiting from Cozamin achieving the new higher run rates (3,780 tpd) and benefits of PV3 Optimization Phase 1 projects at Pinto Valley. The increase in production was the main driver for the $0.16 per payable pound decrease in C1 cash costs1 in 2021 YTD compared to 2020 YTD.

Pinto Valley Mine

Q2 2021 production was in line with the same period last year. Higher recoveries for Q2 2021 (88.6% versus 85.0% in Q2 2020) were a result of improvements in the flotation circuit and lower mill throughput (49,170 tpd in Q2 2021 versus 53,864 tpd in Q2 2020). Lower mill throughput in Q2 2021 compared to Q1 2020 was attributed to planned maintenance downtime in the plant and the impacts of regional wildfires which restricted many employees access to the mine due to area road closures.

2021 YTD production increased by 16% compared to the same period last year due to higher planned head grades for 2021 YTD (0.34% versus 0.30% in 2020 YTD) and improved flotation plant recovery performance.

C1 cash cost1 of $2.33 per payable pound in Q2 2021 were higher than Q2 2020 mainly due to slightly lower production and higher costs, which were impacted by planned mill maintenance work, and lower than expected gold and molybdenum by-product credits.

A decrease in 2021 YTD C1 cash cost1 by $0.13 per payable pound was primarily attributed to higher production compared to the same period last year.

Cozamin Mine

Production in Q2 2021 was 66% higher than the same period last year. This was primarily due to the successful utilization of the Calicanto one-way ramp which increased mill rates from 2,583 tpd in Q2 2020 to 3,828 tpd in Q2 2021. Moreover, Q2 2020 operations were impacted by restrictions due to the COVID-19 government mandated decree. In addition, with the optimized technical report, the mine plan is delivering significantly higher mine grades (1.86% in Q2 2021 versus 1.68% in Q2 2020) from the copper rich San Jose and Calicanto zones.

2021 YTD production increased by 48% compared to the same period last year mainly due to mine and mill expansion (3,588 tpd versus 2,808 tpd in 2020 YTD) and higher head grades (1.83% versus 1.59% in 2020 YTD).

C1 cash costs1 in Q2 2021 and 2021 YTD were in line with same periods last year, respectively, despite the impact of the Cozamin Silver Stream with Wheaton for 50% of the silver, that closed in Q1 2021, which impacted costs by $0.30 per payable pound in Q2 2021 and by $0.32 per payable pound in 2021 YTD. The cost per payable pound impact of the Cozamin Silver Stream was offset by higher production.

Financial Overview

Refer to Capstone’s Q2 2021 MD&A and Financial Statements for detailed financial results.


Q2 2021

Q2 2020

2021 YTD

2020 YTD

Revenue($ millions)










Net income (loss) ($ millions)










Net income (loss) attributable to shareholders ($ millions)





Net income (loss) attributable to shareholders per common share – basic ($)





Net income (loss) attributable to shareholders per common share – diluted ($)










Adjusted net income (loss)1($ millions)





Adjusted net income (loss) attributable to shareholders1($ millions)





Adjusted net income (loss) attributable to shareholders per common share – basic1($)





Adjusted net income (loss) attributable to shareholders per common share – diluted1($)










Adjusted EBITDA1($ millions)










Cash flow from operating activities2 ($ millions)





Cash flow from operating activities per common share1 – basic ($)





Operating cash flow before changes in working capital1,2 ($ millions)





Operating cash flow before changes in working capital per common share1 – basic ($)






Q2 2021 includes $30.0 million gold stream proceeds and 2021 YTD includes $180.0 million silver and gold stream proceeds.


June 30, 2021

December 31, 2020

Total assets ($ millions)



Long term debt (excluding financing fees) ($ millions)


Total non-current financial liabilities ($ millions)



Total non-current liabilities ($ millions)



Cash and cash equivalents and short-term investments ($ millions)



Net cash/(debt)1 ($ millions)




PV3 Optimization Update

PV3 Optimization Phase 1 work was completed in 2020. Phase 1 work included improved blast fragmentation processes, installation of a new secondary crusher and screen decks as well as a new mill shell. As a result, Pinto Valley was able to reliably achieve throughput of 57k to 58k tpd for multiple quarters.

Phase 2 of the PV3 Optimization work continued during Q2 2021. Capital was invested into tailings management, pumping upgrades and installation of a new ball mill shell and is expected to be completed in the second half of 2021 (“H2 2021”) with majority of the work completed in July. Phase 2 optimization work further enables the reliability of higher throughput rates at Pinto Valley.

PV4 Study

Work continues on scenarios to take advantage of approximately one billion tonnes of Mineral Resource, not currently in the Mineral Reserve mine plan, which is at similar grade to the current Mineral Reserves at Pinto Valley. The PV4 pre-feasibility study is expected to be released in late 2022 and will contemplate utilizing existing mill infrastructure rather than building new to achieve higher mining and milling rates, higher cut-off grades to the mill and increased tonnage available for leaching. Extensive column leach test work in collaboration with Jetti Resources LLC (“Jetti”) has commenced and will continue through early 2022. Jetti’s novel patented catalytic technology allows for the efficient and effective heap and stockpile leach extraction of copper and has been a success at Pinto Valley’s leaching operation, where we expect to recover up to 350 million pounds of cathode copper over the next two decades from historic and new mineralized waste piles on the existing PV3 pit shell. Capstone is a pioneer in the application of this leach technology, and we intend to use it to enhance the economics of a future expansion at Pinto Valley.

Eriez HydroFloat

In December 2020, a pilot plant test demonstrated that a 6% to 8% increase in overall copper recovery is possible with the installation of this coarse particle flotation technology at Pinto Valley. Additional benefits include the potential to increase throughput by operating at a coarser grind size, potentially lowering power costs, and providing options to improve water consumption and tailings management benefits.

Work continued on an internal feasibility study for Eriez HydroFloat coarse particle flotation. It was determined that additional engineering is required to incorporate Eriez HydroFloat with the PV4 feasibility study allowing for improved capital integration through potential synergies with tailings management. Current capital estimate of approximately $90 million includes additional regrind milling capacity and this will be further refined as part of the PV4 study.

Pyrite Agglomeration

Pinto Valley is studying the potential to add a pyrite agglomeration circuit to the dump leach process. Currently, the copper concentrate cleaner circuit tailings contain ~0.2% Cu and significant pyrite mineral in a slurry containing up to ~3,000 tpd solids. This material can be introduced into heap leach operations to produce numerous benefits including the following:

  1. Leaching the copper contained in tailings for added copper recovery;

  2. Oxidation of the pyrite generates free acid and would offset the requirement to purchase sulfuric acid for leaching;

  3. Diverting this material from tailings disposition could enable higher milling rates coupled with ESG benefits from reduced water consumption and a significant reduction in acid generating minerals reporting to tailings.


Restart of Molybdenum Production at Pinto Valley

Due to favourable market conditions where year-to-date molybdenum prices have nearly doubled to over $18 per pound in July, Pinto Valley has commenced restart plans to ramp up production of molybdenum over H2 2021. New reagents will be tested with upgrades to pumping equipment to enhance recovery. Production guidance will be given following successful ramp-up over the next two quarters.

Santo Domingo Project

Following consolidation of Capstone’s 100% ownership of the Santo Domingo Project (“Santo Domingo” or “the Project”) in Region III, Chile during Q1 2021, the Company continued to advance the project on several fronts:

  • Negotiations for strategic partnerships and financing for Santo Domingo’s development are advancing well and are expected to be finalized in Q3 2021. Santo Domingo is currently the only fully permitted copper-iron project in Chile.
  • The Company and its partner, Puerto Ventanas, are working to finalize the port services agreement and evaluating opportunities to optimize the Santo Domingo project by replacing the iron pipeline with a rail option.
  • With respect to potential increases in the Chilean mining royalty tax, Santo Domingo is expected to be protected given the fact the Company retains a foreign investment contract with the state of Chile, which fell under the provisions of DL600. One of the benefits to the Company of this agreement is a tax invariability system for a period of 15 years post commercial production, 15 years represents the majority of the 18-year reserve mine life in the 2020 PEA. As described in the 2020 Technical Report, for the period covered by the tax invariability system, the Company expects that applicable taxes will include a category 1 income tax (27%) and the existing royalty, which is a sliding scale between 5-14%, depending on operating margins.
  • The cobalt feasibility study announced in Q1 2021 is progressing according to schedule. A geochemical model has been developed to quantify pyrite-cobalt distribution throughout the orebody, which guided the location of drillholes of the current drilling campaign from which more samples will be obtained for further plant optimization test work. The drilling campaign started in May 2021 with 8,500m of exploration drilling and continued into early July with 7,600m of geometallurgical drilling. The latter will deliver 6,000m of PQ-sized core samples to be used for the development of a 3D geometallurgical pyrite-cobalt flotation model and for confirmative testing with yearly composites according to mine plan. This will allow the Santo Domingo team to refine both the pyrite oxidation process and the downstream hydrometallurgical options to produce battery-grade cobalt sulphate. In parallel, engineering activities will continue to bring cobalt plant design from the current Preliminary Economic Assessment to Feasibility Study level during 2022 including several trade-off studies at process level pyrite oxidation and cobalt pregnant leaching solution purification. The Santo Domingo cobalt project is expected to result in one of the lowest cost cobalt producers outside of the Democratic Republic of Congo3. The feasibility study is scheduled for completion in late 2022. The production of battery-grade cobalt sulphate at Santo Domingo is expected to significantly add to the robust copper-iron-gold project and maximizes the recovery of future-facing metals from the rich resource. The work program will consist of two phases and several stage-gates. Following the Phase 1 work program, Capstone expects to provide an update to the market on metallurgy work, process flowsheet design and updated cobalt reserves and resources in Q1-2022. The feasibility report is expected by Q4 2022 with construction to start in 2023 or 2024 following permitting. The integration of the cobalt project with the copper-iron concentrator has been designed so that the cobalt plant can be built later than the copper concentrator.


Darton Commodities Limited (2020-2021 Cobalt Market Review)


Capstone will host a conference call and webcast on Wednesday, July 28, 2021 at 08:30 am PT / 11:30 am ET.

Link to the audio webcast: https://produceredition.webcasts.com/starthere.jsp?ei=1473032&tp_key=6c0969ad6e

Dial-in numbers for the audio-only portion of the conference call are below. Due to an increase in call volume, please dial-in at least five minutes prior to the call to ensure placement into the conference line on time.

Toronto: (+1) 416-764-8650

Vancouver: (+1) 778-383-7413

North America toll free: 888-664-6383

Confirmation #21773965

A replay of the conference call will be available until August 4, 2021. Dial-in numbers for Toronto: (+1) 416-764-8677 and North American toll free: 888-390-0541. The replay code is 773965#. Following the replay, an audio file will be available on Capstone’s website at: https://capstonemining.com/investors/events-and-presentations/default.aspx.

This release is not suitable on a standalone basis for readers unfamiliar with Capstone and should be read in conjunction with the Company’s MD&A and Financial Statements for the three and six months ended June 30, 2021, which are available on Capstone’s website and on SEDAR, all of which have been reviewed and approved by Capstone’s Board of Directors.


Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. We are committed to the responsible development of our assets and the environments in which we operate. Our two producing mines are the Pinto Valley copper mine located in Arizona, US and the Cozamin copper-silver mine in Zacatecas State, Mexico. In addition, Capstone owns 100% of Santo Domingo, a large scale, fully permitted, copper-iron-gold project in Region III, Chile, as well as a portfolio of exploration properties. Capstone’s strategy is to focus on the optimization of operations and assets in politically stable, mining-friendly regions, centred in the Americas. Our headquarters are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX) under the symbol CS.

Further information is available at www.capstonemining.com.


This document 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 the Company 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 and the impacts of the ongoing and evolving COVID-19 pandemic. Forward-looking statements include, but are not limited to, statements with respect to the estimation of Mineral Resources and Mineral Reserves, the expected timing, operations and success of the underground paste backfill system study and tailings filtration project at Cozamin, the success of the Pinto Valley HydroFloat project, the outcome and timing of the PV4 study, the timing and success of our use of the Jetti Technology, the successful completion of a port agreement with Puerto Ventanas and/or rail agreement with Sigdo Kopper’s rail business, the success of our strategic process for the Santo Domingo project, the expected reduction in capital requirements for the Santo Domingo Project, the timing and success of the Cobalt Study for Santo Domingo, the timing and success of the PV3 Optimization project, the realization of Mineral Reserve estimates, the timing and amount of estimated future production, costs of production and capital expenditures and reclamation, the success of our mining operations, the success of mineral exploration, the estimations for potential quantities and grade of inferred resources and exploration targets, Capstone’s ability to fund future exploration activities, Capstone’s ability to finance the Santo Domingo project, environmental risks, unanticipated reclamation expenses and title disputes. The potential effects of the COVID-19 pandemic on our business and operations are unknown at this time, including Capstone’s ability to manage challenges and restrictions arising from COVID-19 in the communities in which Capstone operates and our ability to continue to safely operate and to safely return our business to normal operations. The impact of COVID-19 to Capstone is dependent on a number of factors outside of our control and knowledge, including the effectiveness of the measures taken by public health and governmental authorities to combat the spread of the disease, global economic uncertainties and outlook due to the disease, and the evolving restrictions relating to mining activities and to travel in certain jurisdictions in which we operate.

In certain cases, forward-looking statements can be identified by the use of words such as “anticipates”, “approximately”, “believes”, “budget”, “estimates”, expects”, “forecasts”, “guidance”, intends”, “plans”, “scheduled”, “target”, or variations of such words and phrases, or statements that certain actions, events or results “be achieved”, “could”, “may”, “might”, “occur”, “should”, “will be taken” or “would” or the negative of these terms or comparable terminology. In this document certain forward-looking statements are identified by words including “anticipated”, “expected”, “guidance” and “plan”. 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 and closure of mining projects, 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, market access restrictions or tariffs, changes in general economic conditions, availability of water, 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, licenses and permits from governmental authorities and potential legal challenges to permit applications, contractual risks including but not limited to, our ability to meet the completion test requirements under the Cozamin Silver Stream Agreement with Wheaton Precious Metals, our ability to meet certain closing conditions under the Santo Domingo Gold Stream Agreement with Wheaton Precious Metals, acting as Indemnitor for Minto Exploration Ltd.


For further information:
Jerrold Annett, SVP, Strategy and Capital Markets



Kettina Cordero, Director Investor Relations & Communications



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