TORONTO (miningweekly.com) – Toronto-listed Capstone Mining reported 2012 full-year production from its two operating mines was on the mark with combined production totalling 82.8-million pounds of copper in concentrate.

The company managed to marginally exceed its expected full-year production, buoyed by a strong performance from its Cozamin mine, in Mexico, which made up for lost production from the company’s Minto mine, in Canada.

"The flexibility of having two operating mines allowed Cozamin's strong performance to more than compensate for the shortfall experienced at Minto during 2012,” CEO Darren Pylot said on Thursday.

During the fourth quarter ended December 31, the company reported production of 19.7-million pounds of copper contained in concentrates.

During the year, Capstone produced 17.2-million pounds of zinc, 1.75-million ounces of silver and 2.9-million pounds of lead in concentrates. Final gold production results were not available owing to assaying being conducted off-site, but were estimated at 18 599 oz for the year.

Capstone said Cozamin remained a steady producer and over the past two years recoveries have consistently exceeded 92%, with throughput increasing from an average of 3 000 t/d in 2011 to 3 200 t/d in 2012.

Despite copper grades trending down towards the reserve grade over time, continued exploration success has brought high-grade ore from the Mala Noche Footwall zone into production and extended the current mine life, before inclusion of 2012 drilling, to nine years. Grades in the fourth quarter were above the guided 1.7% copper, driven by the ability to selectively mine high-grade blocks in the West zone.

At Minto, 2011 and 2012 were reported to be transitional years, as mining progressed into the Area 2 pit. Throughput has increased at the mill, with 2012 throughput of 1.34-million tons being up 7% from 2011.

In December, regulatory approval was received to provide the flexibility to further increase the milling rate to 1.5-million tons per year.

Grades in the fourth quarter were at the expected 1.4% copper, and owing to highwall instability, much more low-grade stockpile materials than long-term plans had expected were mined. The accelerated pushback that was necessary to improve the stability of the west pit highwall continued throughout the fourth quarter. Mining in the Area 2 pit resumed in late December.

Capstone expects to produce 85-million pounds of copper in concentrates at a total cash cost of $1.65/lb to $1.75/lb of payable copper, net of by-product credits and selling costs.

At Santo Domingo, in Chile, Capstone would aim to complete various trade-off studies and pursue a port agreement, both of which would feed into the bankable feasibility study. At the Kutcho project, in Canada’s British Columbia, the company would aim to file an environmental assessment that starts the formal permitting process.

The company expects to spend $64.7-million in capital expenditure during the year.

Early on Thursday afternoon Capstone’s TSX-listed stock was the most traded, at a volume of 6.27-million, rising 3.91% in value to C$2.66 a share.