TORONTO (miningweekly.com) – Canadian miner Capstone Mining has reported a 92% slide in second-quarter earnings, as lower sales, lower realised prices and increased costs impacted the company’s quarterly performance.
Vancouver-based Capstone, which had operations in the US, Mexico, Canada, Chile and Australia, reported net income and adjusted net income of $1.3-million, or nil a share.
Revenue declined 34.5% to $112.5-million, impacted by a 16.7% decrease in copper sold at 20 473 t. The average realised price for copper fell 20.5% to $2.67/lb in the period, while C1 cash cost a payable pound produced rose more than 8% to $2.22/lb.
"In the second quarter of 2015, we continued our focus on flexibility and execution. We maintained our financial flexibility by entering into zero-cost collars for 36 000 t of copper production at a minimum price of $2.60/lb to the end of [the third quarter] to ensure we could execute our 2015 capital programme in this difficult copper price environment,” president and CEO Darren Pylot explained on Tuesday.
Capstone expected to produce about 90 000 t of copper this year at a C1 cash cost of $2/lb to $2.10/lb of payable copper produced, net of by-product credits and selling costs. However, the company pointed out that this year's output distribution by mine was expected to be different than originally expected, with outperformance at Minto, in Canada, expected to make up for most of the anticipated shortfall at Cozamin, in Mexico.
Capstone’s TSX-listed stock on Wednesday closed up 5.56% at C$0.95 apiece. Copper prices had fallen to near six-year lows, wiping nearly 58% off the stock’s value since the start of the year.