Capstone stock takes a dive, 2015 expected to set tone for 2016
TORONTO (miningweekly.com) – The TSX-listed stock of Canadian base metals producer Capstone Mining on Tuesday lost nearly 19% in value after the company reported that 2014 output came in below target.
For the full year, Capstone produced 103 300 t of copper from its three operating mines Pinto Valley, Cozamin and Minto, just short of its guidance of 104 800 t.
Grades were lower at Cozamin, owing to ongoing ground-support remediation activities delaying access to some of the higher-grade areas of the mine.
Mining from ore stockpiles at Minto had also contributed to the lower-than-expected total output volumes. Capstone said the mill would continue to process underground and stockpiled ore, with surface mining on hold until receiving the required permits, expected in March.
Financial services firm Desjardins Capital Markets on Tuesday noted that it expected Capstone to next week announce that it would produce fewer tonnes of copper this year.
“We expect the production volumes will be lower year-over-year at Pinto Valley as grades are planned to be lower at Cozamin, as the mine matures, and at Minto, as Capstone continues to process low-grade stockpiled ore for much of the year.
“We view 2015 as a year of investment, including shovels and trucks at Pinto and preparation of Minto North, to set up for an improved 2016,” analyst Jackie Przybylowski said in a note to clients.
Investor sentiment had also turned negative toward the red metal, prompting it to fall below $6 000/t in recent days, beyond five-year lows.
In the afternoon session, Capstone’s TSX-listed stock was down C$0.31 at C$1.61 apiece.
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