Capstone Mining sees production up 200% over five years after Chile buy

TSX-listed Capstone Mining Corp. on Wednesday announced its financial results for the three months ended March 31, 2011. Net earnings for the quarter were $18.9m and cash flow from operating activities was $6.7m.

Capstone ended the quarter with cash on hand of $181.2m, after repaying C$17.4m of its long-term obligations in the first quarter. Copper production for the quarter at Capstone's two mines, Cozamin and Minto, totalled 16.1m of payable copper at an estimated total cash cost of $1.59 per payable pound.

Revenues and net earnings rose in the first quarter due to higher metal prices," said Darren Pylot, Capstone President and CEO. "The higher prices were partially offset by higher cost of sales and depletion and amortization on higher unit production costs and deferred stripping amortization. Production was lower than planned in the first quarter, however so far production in the second quarter is exceeding targets resulting in a considerable portion of the first quarter production shortfall being made up."

"The biggest highlight for Capstone to date in 2011 was our announced proposed acquisition of Far West Mining and our strategic partnership with Korea Resources Corporation. Far West's Santo Domingo Project in Chile is expected to give us 200% growth in anticipated copper production from 2011 to 2016," continued Mr. Pylot. "The transaction, if approved by Capstone and Far West shareholders, is expected to close in mid-June."

For the full press release of Capstone's first quarter 2011 results click here.

Image from the Cozamin copper, silver, lead and zinc mine in Mexico is supplied by the company. The mine produced 8.3m pounds of payable copper at a total cash cost of $1.57 per pound during the first quarter of the year.