Capstone's Mantoverde Reaches Commercial Production, Expansion Feasibility Study Released

Americas-focused miner Capstone Copper (TSX:CS,ASX:CSC,OTC Pink:CSCCF) announced two pieces of news from its Mantoverde development project in Chile on Tuesday (October 1).

The company reported that it has achieved commercial production at the site, and followed up with the release of a feasibility study for its Mantoverde optimized brownfield expansion project.

Mantoverde reached commercial production on September 21 after its mill operated for 30 consecutive days at an average of 75 percent of its nameplate throughput, which stands at 32,000 metric tons (MT) of ore per day.

Despite the achievement, Capstone said its consolidated copper production for 2024 is expected to come in at the lower end of the projected range, between 190,000 and 220,000 MT. The company's C1 cash costs are likely to trend slightly above guidance, which is set between US$2.30 and US$2.50 per payable pound.

This is largely due to the timing of ramp ups at both the Mantoverde and Mantos Blancos operations, which occurred later in the year than anticipated. However, the company expects Q4 to be its strongest quarter across its portfolio.

In terms of the feasibility study for the Mantoverde optimized project, Capstone said it focuses on a capital-efficient expansion of the sulfide concentrator. The work is expected to increase the plant's throughput capacity from 32,000 MT of ore per day to 45,000 MT per day, adding an additional 20,000 MT per year of copper production.

Capital of about US$146 million is estimated, and will extend the mine’s life to 25 years. The study projects an after-tax net present value of US$2.9 billion at an 8 percent discount and a long-term copper price of US$4.10 per pound.

Capstone also reported an increase to sulfide mineral reserves, saying they have risen by 68 percent to 398 million MT grading 0.49 percent copper and 0.1 grams per MT gold. Contained copper has increased by 40 percent.

Meanwhile, oxide mineral reserves have seen an 18 percent increase in tonnage to 236 million MT at a soluble copper grade of 0.21 percent. Contained copper has increased by 11 percent.

Over the next five years, Mantoverde is expected to produce an average of 135,000 MT of copper and 37,000 ounces of gold annually at a cash cost of US$1.81 per payable pound of copper.

Capstone aims to start construction of the Mantoverde optimized project after the approval of its environmental permit application, which was submitted in H1. The company anticipates approval in the first half of 2025.

The firm is also currently looking into a number of value-enhancement opportunities within the Mantoverde-Santo Domingo district. These include processing oxide material from Capstone's neighboring Santo Domingo and Sierra Norte projects, and the recovery of cobalt and additional copper from pyrite concentrate.

Capstone is scheduled to release its third quarter financial results on October 31.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.