Cozamin Key to Intermediate Copper Producer AmbitionsMon, 10/21/2013 - 16:17
At a time when exploration investment is slowing down and grassroots projects pose ever more risk, there are certain mining companies that are cushioned by the fact of having larger properties with as yet unexplored areas that hold great potential. “Exploration on our Cozamin property has been successful, and the area promises to provide some very important discoveries in the coming year. We have so far only focused on 30% of our property, and that tells you that we still have a lot of potential in the other areas,” says Manuel Estrada, General Manager of Capstone Mining’s Cozamin mine in Zacatecas. The Cozamin mine is located 3.8 km northnorthwest of Zacatecas and is a copper-silver-zinc-lead underground mine with a surface milling facility. “Cozamin is forecasted to produce 44 million pounds of copper at a cash cost of US$1.00-1.10 per pound in 2013. Expansion of the mine, which has an expected life of nine years, is a key focus for Capstone. Having access to those reserves is what we will be investing in: optimizing our resources,” says Estrada.
Cozamin is one of two producing properties in Capstone Mining’s portfolio, the other being the Minto mine in Yukon, Canada, and the company’s sole property in Mexico. The company is in the process of adding the Pinto Valley mine in Arizona, US to its portfolio, which will increase its annual copper production by 130-150 million pounds. This acquisition in combination with exploration projects in Chile, Canada, Australia and Mexico provide the foundation for the company’s ambition to become a leading intermediate copper producer. Despite being a Canadian company, the company has focused on keeping the Mexican property as Mexican as possible. “We run the Cozamin mine with no expats at all – it is managed completely by Mexican nationals,” says Cindy Burnett, the company’s Vice President of Investor Relations & Communication. “Manuel recruited through partnerships with the Autonomous University of Zacatecas, which has a long history of mining, so there are very well trained people in the Zacatecas region.”
Capstone considers its people to be one of its biggest assets, and Burnett attributes the company’s success to them. In building successful projects that establish good relationships with local communities, the company’s people operate according to four key values. “The first of those is always being accountable; we take ownership of ourselves and our work, and we do the right thing for our business and our stakeholders. The second is executing with excellence; we measure our performance and we strive to excel at every level. The third is delivering results; we are responsible for our outcomes, but we also work in a very decentralized way. Our mine management teams know the country, the mine and the culture, and are responsible for their operation and their outcomes, and they make their own decisions. The fourth is working responsibly; safety is non-negotiable, and the wellbeing of our people is our business. As a management team you cannot tolerate any unsafe behavior, and that applies across the board,” explains Burnett.
The company’s operations in Mexico have been logistically very straightforward, compared for example to the company’s Minto mine in Yukon, Canada, which is remotely located beyond the Yukon river. The site must be accessed by barge in summer, and by ice bridge in winter. “This makes it a higher cost operation than Cozamin, which is located right next to the city of Zacatecas, a world-class mining center with excellent infrastructure,” says Burnett.
According to Estrada, Zacatecas’ ‘world-class’ status is in part a result of the productive role that the Ministry of Economic Development has played in making the area an attractive location for mining projects. Capstone Mining has benefitted from being based in Zacatecas, but the company is also giving back and working to leave a positive legacy in the local industry. The company has made agreements with a number of different local and national universities, such as Autonomous University of Zacatecas and the Autonomous University of Guanajuato, and between January and August 2013 alone the company had 30 students join the company on work placements. Capstone’s investment in the area is also evident in the role it played in the creation of the Zacatecas mining cluster. “We were one of the founding members of the Zacatecas mining cluster. We have been actively participating in the different initiatives it has been taking forward, and we have been able to attract some really important companies to come and establish themselves in Zacatecas,” says Estrada.