TORONTO (miningweekly.com) – Canadian base-metals miner Capstone Mining on Wednesday reported first-quarter earnings were negatively impacted by lower copper prices in the period.
Net earnings for the period ended March 31 declined by 56% to $6.9-million or $0.02 a share, compared with net earnings of $15.7-million or $0.04 a share in the same period of 2012. Adjusted net earnings, which removed once-off items, were down 73% to $6.1-million, compared with the $22.3-million recorded a year earlier. Analysts had, on average, expected adjusted net earnings of $0.04 a share on revenue of C$83.66-million.
Revenue declined by 18% to $57.7-million, compared with the $70.4-million the company earned in the first quarter of 2012, as copper sales sagged 7% to 15.1-million pounds.
The company’s cash costs per payable pound of copper increased by 19% to $1.72/lb, while copper production was flat at 18.6-million pounds.
"Net earnings and cash flow were impacted by lower copper prices this quarter. However, we are very pleased with the status of our operating mines, both of which have reached a level of operating maturity that permits considerable flexibility in their operations, allowing them to respond quickly as mining conditions dictate,” CEO Darren Pylot said in a statement.
He added the most significant news occurred subsequent to end of the quarter, when the company announced it would buy mining giant BHP Billiton’s Pinto Valley copper and molybdenum operations, in the US, and its associated San Manuel Arizona Railroad Company in a deal worth $650-million.
Capstone said it expected to produce 85-million pounds of copper contained in concentrates this year at a cash cost of $1.65/lb to $1.75/lb of payable copper, net of by-product credits and selling costs.
The company’s TSX-listed stock on Wednesday closed 2.74% higher at C$2.25 apiece.