Copper production in Q3 totaled 40.3 thousand tonnes at C1 cash costs1 of
Q3 2023 OPERATIONAL AND FINANCIAL HIGHLIGHTS
Net loss of
Adjusted net loss attributable to shareholders1 of
Adjusted EBITDA1 of
Operating cash flow before changes in working capital of
Consolidated copper production for Q3 2023 of 40.3 thousand tonnes at C1 cash costs1 of
The Company reaffirms its H2 copper production guidance of 83kt to 93kt. C1 cash costs1 are trending towards the upper end of the H2 guidance range of
Total available liquidity1 of
Consolidated Production
Q3 2023 copper production of 40.3 thousand tonnes was 12% lower than Q3 2022 primarily as a result of expected lower oxide production at Mantoverde on lower ore grade related to the mining sequence as we are transitioning to sulphide ore for MVDP. Moreover,
Q3 2023 C1 cash costs1 of
2023 YTD copper production of 120.3 thousand tonnes of copper is higher than the 113.3 thousand tonnes in 2022 YTD, primarily as a result of full quarter of production in Q1 2023 versus nine day production in Q1 2022 at Mantos Blancos and Mantoverde.
2023 YTD C1 cash costs1 of
Cathode production is from copper oxide ore that requires sulphuric acid leaching, solvent extraction and electrowinning (SX-EW) to produce copper cathodes which are a finished copper product for the market. Sulphide production requires a mill that utilizes a grinding and flotation process to recover sulphide minerals in a copper concentrate saleable as an intermediate product to smelters and refiners.
Copper production of 13.6 thousand tonnes in Q3 2023 was 3% lower than in Q3 2022 mainly on lower mill throughput during the quarter (Q3 2023 - 47,426 tonnes per day ('tpd') versus Q3 2022 - 48,143 tpd), resulting from unplanned eight-day downtime related to the secondary crusher jack shaft replacement and counter shaft repairs. Grade was consistent quarter over quarter (Q3 2023 - 0.34% versus Q3 2022 - 0.34%). Recoveries were lower compared to the same period last year (Q3 2023 - 87.4% versus Q3 2022 - 89.1%).
2023 YTD production was 6% lower than 2022 YTD mainly due to lower mill throughput (47,972 tpd in 2023 YTD versus 51,088 tpd in 2022 YTD) driven by heavy rainfall, including flooding, which resulted in plugged chutes and screens in Q1, conveyor belt replacement/structural support rebuild, and unplanned maintenance on the secondary crusher and associated conveyors which caused the equivalent of twenty days of downtime during Q2 and Q3. Recoveries were higher than 2022 YTD (87.4% 2023 YTD versus 86.3% 2022 YTD). The mill feed grade was consistent with the same period last year (0.32% in 2023 YTD versus 0.33% in 2022 YTD).
Q3 2023 C1 cash costs1 of
2023 YTD C1 cash costs1 of
Q3 2023 production was 12.2 thousand tonnes, comprised of 9.1 thousand tonnes from sulphide operations and 3.0 thousand tonnes of cathode from oxide operations, 11% lower than the 13.6 thousand tonnes produced in Q3 2022. The lower production was driven primarily by lower dump throughput, grade and recoveries impacting cathode production. The mill throughput of 14,176 tpd in Q3 2023 was impacted by mill downtime caused by planned repair and maintenance of the concentrator plant that lasted six days (liners and major components change). Recoveries were lower in Q3 2023 compared to the same period last year (76.3% in Q3 2023 versus 79.3% in Q3 2022), mainly driven by ore characteristics in the upper areas of the mine. A plan to address the plant stability during the second half of 2023 is underway that includes improved maintenance and optimization of the concentrator and the tailings system.
2023 YTD production of 37.9 thousand tonnes, composed of 28.3 thousand tonnes from sulphide operations and 9.6 thousand tonnes of cathode from oxide operations, was higher than the same period last year due to full operational Q1 2023 compared to a nine-day stub period in Q1 2022.
Combined Q3 2023 C1 cash costs1 were
Combined 2023 YTD C1 cash costs1 of
Q3 2023 copper production of 8.6 thousand tonnes was 26% lower compared to 11.6 thousand tonnes in Q3 2022. Heap operations grade was lower as a result of mine sequence (0.32% in Q3 2023 versus 0.45% in Q3 2022), and recoveries were lower (66.5% in Q3 2023 versus 86.7% in Q3 2022) due to lower solubility ratio of the processed mineral and lower grades, all of which was partially offset by higher heap throughput (2.7 million tonnes in Q3 2023 versus 2.5 million tonnes in Q3 2022). Throughput from dump operations was lower compared with the same period last year due to a temporary sulphuric acid supply shortfall in September, and grades were consistent with the same period last year.
2023 YTD production of 25.4 thousand tonnes was lower than the same period last year, despite of full operational Q1 2023 compared to nine-day stub period in Q1 2022 due to lower heap grades as a result of mine sequence (0.31% YTD 2023 versus 0.48% YTD 2022) and lower recoveries due to lower solubility ratio of the processed mineral and lower grades. Production for the remainder of the year should be positively impacted by higher expected grades.
Q3 2023 C1 cash costs1 were
2023 YTD C1 cash costs1 were
Q3 2023 copper production of 5.9 thousand tonnes was lower than the same period prior year mainly on lower mill throughput (3,567 tpd in Q3 2023 versus 3,829 tpd in Q3 2022). Recoveries and grades were consistent quarter over quarter.
2023 YTD production was 5% lower than 2022 YTD due to lower throughput as a result of change in mining method (cut-and-fill) (3,590 tpd in 2023 YTD versus 3,803 tpd in 2022 YTD). Recoveries and grades were consistent with the same period last year.
Q3 2023 C1 cash costs1 were 54% higher than the same period last year mainly due to inflationary price increases on the main consumables, unfavourable foreign exchange rate, start of paste plant operations, which resulted in an increase in labour, contractor and cement costs, changes in mining method and additional bolting requirements as part of strengthening ground support (
2023 YTD C1 cash costs1 were 45% higher than the same period last year primarily due to the change in mining method which resulted in an increase in contractor utilization and higher spend on bolting, and unfavourable foreign exchange rate (
Construction of the MVDP located at the existing Mantoverde (oxide) operation continues to progress well. The MVDP is expected to enable the mine to process 231 million tonnes of copper sulphide reserves over a 20-year expected mine life, in addition to existing oxide reserves. The MVDP involves the addition of a sulphide concentrator (32,000 tonnes per day) and tailings storage facility, and the expansion of the existing desalination plant.
The MVDP is progressing under a lump-sum turn-key engineering, procurement, and construction (EPC) contract with
The MVDP is progressing well at approximately 93% complete as at
Key areas of work completed during Q3 2023 were: Stockpiled approximately 5.0 million tonnes of sulphide ore
Commenced commissioning of the primary crusher
Grinding area: lubrication and cooling system installed. Laying completion of medium-voltage conductors to the Ball/SAG mill. Rotation of SAG/
Flotation area: All cells installed and water test started
Filtering area: Filter installed, air blower and tank mounted
Tailings Thickener: Rake glide test done, underflow control valves and metallurgical sampler assembly completed
Sand Plant: Thickener rake assembly in progress
Tailings Storage Facilities: Mass excavation completed; Starting Wall and Cut-off Trench nearing completion
As of
A virtual tour of the project can be viewed at https://vrify.com/decks/12698-mantoverde-development-project
Mantos Blancos
Mantos Blancos is currently focused on reliably achieving the installed capacity of 20,000 tonnes per day. We are executing on a plan to address plant stability that includes improved maintenance and optimization of the concentrator and tailings system. During the third quarter we addressed several bottlenecks in the crushing and grinding area of the operation. Moving forward, certain components in the tailings dewatering area, such as new handling and pumping infrastructure, are expected to be delivered and installed in early 2024, after which we expect Mantos Blancos to consistently deliver nameplate throughput rates.
The capital enhancements will enable future expansion opportunities as there will be installed capacity in certain parts of the process in excess of 20,000 tonnes per day. Once nameplate capacity is reached, we will recommence evaluating the potential to increase throughput of the Mantos Blancos sulphide concentrator plant to at least 27,000 tonnes per day using existing process infrastructure and new technologies, while also evaluating options to extend the life of copper cathode production.
Chilean Tax Reform
In
The Mining Royalty contains two components, an ad-valorem component and a mine operating margin component. The ad-valorem component is applicable to companies with annual sales of copper that are higher than the equivalent of 50,000 metric tonnes of fine copper ('MTFC'). If the company's 'Adjusted Mining Operational Taxable Income', or 'RIOMA' as it is referred to in
The mine operating margin ('MOM') component will vary depending on the sales volume of the company, along with whether more than 50% of its annual production is copper.
The MOM component will not be applicable in cases where the RIOMA is negative and is calculated based on total mine operating margin, which includes silver and gold by-products. The Mining Royalty allows depreciation as a fully deductible operational expense in the calculation of RIOMA, however, unlike the First Category deduction, it is on a non-accelerated basis.
The Mining Royalty includes a maximum limit to the total tax burden, consisting of (1) the corporate income tax paid in the respective year, (2) the Mining Royalty (both ad-valorem and MOM components) and (3) withholding taxes to which owners would be subject to upon distribution of dividends. The calculation of withholding taxes assumes a 100% distribution, and is calculated considering a tax burden of 35% of net taxable income, i.e. an additional 8% to the First Category rate of 27%. The Mining Royalty establishes that when the sum of three component exceeds 46.5% of RIOMA, then the Mining Royalty would be adjusted in such a way that it does not exceed the limit.
As a change in tax law is accounted for in the period of enactment, rather than from its effective date, the Company recorded a deferred income tax charge of
Mantoverde - Santo Domingo District Integration Plan
The Company is focused on creating a world-class mining district in the Atacama region of
Santo Domingo FS Update
MVDP Optimized FS and Phase II
The Company is currently analyzing the next expansion of the sulphide concentrator. Capstone has identified that the desalination plant capacity and major components of the comminution and flotation circuits of the MVDP are capable of sustaining average annual throughput of approximately 45,000 tonnes per day with no major capital equipment upgrades. Capstone continues to work with Ausenco's engineering team to develop the MVDP Optimized Feasibility Study, including evaluating the costs and timelines of debottlenecking the minor components of the plant to meet the potential increased throughput target. The feasibility study is expected in the first half of 2024.
Given the above, the Mantoverde Phase II opportunity will evaluate the addition of an entire second processing line, possibly a duplication of the first line, to process some of the additional 77% of resources not utilized by the MVDP Optimized.
Mantoverde - Santo Domingo Cobalt Study
A district cobalt plant for Mantoverde -
The cobalt recovery process consists of a concentration step, an oxidation step, and a cobalt recovery step. The concentration step considers a conventional froth flotation circuit treating copper flotation tails to produce a cobaltiferous pyrite concentrate which is expected to contain between 0.5% and 1.0% Co depending on the ore grade. The oxidation step entails adding the pyrite concentrate to the Mantoverde heap leach process, which will be converted to a bioleaching process to oxidize and break down the pyrite, thereby releasing the cobalt into solution. The cobalt is then recovered from the heap leach solutions via a continuous ion exchange process treating the SX raffinate. The approach has been successfully demonstrated at the bench scale and onsite piloting is expected to begin before the end of 2023. Pending successful piloting, engineering would commence for a small plant treating only Mantoverde pyrite concentrates to produce up to 1,500 tonnes per annum ('tpa') of contained cobalt. Timing of the studies will depend on the results of work.
At a combined MV-SD target of 4.5 to 6.0 thousand tonnes of cobalt production per year, this would be one of the largest and lowest cost cobalt producers in the world outside of
PV District Growth Study
The company continues to review and evaluate the consolidation potential of the
Management Additions
Effective
Effective
Surety Bond Utilization
In
In conjunction with Capstone's sale of the
While Capstone has not made any payments against the liability during the current quarter,
Corporate Exploration Update
Cozamin: Q3 2023 infill drilling at the Mala Noche Main Vein West Target was on hold while the development of the lower elevation mine cross-cut was completed. Infill drilling will recommence in early Q4 2023 to support an updated mineral resource estimate in 2024.
Copper Cities,
Contact:
Tel: 647-273-7351
Email: jannett@capstonecopper.com
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