Darren Pylot
President and CEO
Capstone Mining
View from the Top

Coorporate Restructuring Boost Growing Copper Mine

Wed, 10/18/2017 - 14:15

Q: How did the company generate positive net earnings at its three mines?

A: In an agile response to the challenging copper price environment, Capstone took action to reduce costs, including reorganizations at our operations in 2015. In January 2016, we decreased corporate head office positions and recurring general and administrative expenses by 20 percent. We were successful in beating our budget for consolidated all-in cost per pound of payable copper for the year by US$0.07 at US$1.88, resulting from our site operating teams executing on key decisions to deliver more efficient operations.

Q: What strategies is the company incorporating to achieve its production guidance in 2017?

A: Our 2017 operating plan and five-year outlook takes a conservative stance on metal prices while focusing on ongoing cost-efficiencies at our existing operations. We are looking forward to advancing new opportunities this year, including building on the operating success at Pinto  Valley and looking at the potential to extend the mine life at Minto. At Cozamin, we are looking forward to add more zinc production as well as increasing zinc reserves during this period of higher zinc prices.

We expect to mill fewer tons in 2017 than in 2016 but with higher grade, with 80 percent of ore coming from the narrow vein Mala Noche Footwall Zone. All-in cost guidance of US$1.90-2.00 includes the development costs reflective of the move from the main zone to the footwall zone as well as evaluating the potential to bring the existing zinc resource into the mine plan. The 2017 exploration program at Cozamin includes over 30,000m of primarily underground infill drilling aimed at increasing reserves in the Mala Noche Footwall Zone and the San Rafael zinc zone.

Q: What has been the key to your success at Cozamin?

A: The Cozamin mine commissioned operations in 2006 with throughput of 1,000t/d and a three-year mine life. We were very successful in expanding the operation with the expansion of the initial Mala Noche zone and discovery of the Mala Noche footwall zone. At the end of 2016, following 10 years of mining, we are operating at 3,000t/d with another four years still ahead of us and further exploration targets.