TORONTO (miningweekly.com) – Toronto-listed Capstone Mining has reported soaring headline earnings on higher-than-expected production and below-guidance costs.

Adjusted net earnings, after removing certain noncash and nonrecurring items for the quarter ended December 31, were $19.3-million or 5c a share, beating analyst expectations of 2c a share. Adjusted earnings were almost four-and-a-half times that of the same quarter in 2011, when the company recorded $4.2-million or 1c a share.

Capstone recorded net earnings of $18.5-million or 5c a share for the quarter, up 277% when compared with $4.9-million or 1c a share in the prior year.

Earnings from mining operations were driven by revenue of $72.5-million, which was 18% higher year-on-year, on the sale of 19.4-million pounds of copper, 3.9-million pounds of zinc, 400 000 lb of lead, 5 700 oz of gold and 452 000 oz of silver.

For the quarter, the company produced a total of 18.8-million pounds of payable copper at an estimated total cash cost of $1.70/lb of copper.

Capstone recorded net earnings of $59.6-million or 16c a share for the full-year 2012, 1% lower than the $60.4-million or 20c a share booked at the end of 2011.

Adjusted full-year earnings, which excluded a $5.5-million noncash charge related to the write-down of the ore stockpile inventory at the Minto mine, in Canada’s Yukon Territory, were $77.9-million or 20c a share, just under 50% more than the $52.2-million booked in the previous year.

Full-year revenue totalled $305.5-million, 6.8% lower than the $327.8-million booked in 2011. Revenue was derived from the sale of 79-million pounds of copper, 13.2-million pounds of zinc, 2.6-million pounds of lead, 18 562 oz of gold and 1.62-million ounces of silver.

Cozamin project is a polymetallic (copper, silver, lead, zinc) mine located 3.8 km north-northwest of Zacatecas City in the mineral-rich state of Zacatecas, Mexico

"We are looking ahead to the growth of the company and in 2013 are reinvesting in our mines and development projects. With about ten-year mine lives at our operating mines and additional exploration upside, Capstone is poised to deliver strong results well into the future,” CEO Darren Pylot said.

He added that the company planned to advance its development projects this year by formally entering the permitting process at Kutcho, in British Columbia, and completing key milestones at Santo Domingo, in Chile, which would include submitting the environmental-impact study and completing the feasibility study.

"With our strong balance sheet we have the financial resources in place to execute on our strategy. In addition, the ability to deploy our balance sheet on opportunistic acquisitions provides Capstone with the flexibility to grow our short-term production profile and advance the company to the next level,” Pylot said.

Capstone said it expected to produce about 85-million pounds of copper contained 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.

The company’s TSX-listed stock traded at C$2.37 apiece on Thursday.