VANCOUVER, January 16, 2012 /PRNewswire/ --
Capstone Mining Corp.'s (TSX: CS) ("Capstone") 70% owned Chilean operating subsidiary has awarded the contract for the preparation of a Feasibility Study ("FS") for its Santo Domingo Iron Oxide-Copper-Gold project in Chile to AMEC, with the mining package awarded to NCL Ingeniería y Construcción Ltd. ("NCL"). The project is owned 70% by Capstone and 30% by Korea Resources Corporation ("KORES").
AMEC is an international engineering and project management services company in the natural resources, nuclear, clean energy, water and environmental sectors, employing 27,000 people in 40 countries. AMEC's global Mining & Metals business has developed some of the most challenging projects in the world and is recognised for its mining and process technical expertise. The FS will be overseen by AMEC's Santiago office, one of the largest project delivery firms in Chile with over 1,000 employees. AMEC has been established in Chile since 1999.
NCL is a Chilean mining engineering firm, employing 70 people, which has completed projects in over 25 countries on five continents, specializing in mine design and mine planning. NCL has been operating in Chile since 1985 and in Brazil since 2001.
The firms were selected based on their technical expertise and additionally both firms were able to offer proven teams of people to meet Capstone's timeline.
Work will start immediately on the FS with completion currently scheduled for early 2013. In addition, the AMEC scope of work includes the basic engineering package to be completed in parallel with the FS, which will provide specifications and bid documents for all major and long lead time equipment items prior to the end of 2012. Production from Santo Domingo is expected to start in late 2015.
The Santo Domingo project is owned 70% by Capstone and 30% by KORES. Upon completion of the Feasibility Study and board approval, KORES has three months to arrange a debt financing package for 65% of the project capital cost as estimated in the FS. The remainder of the capital cost will be in the form of equity, split 70% Capstone and 30% KORES.
In addition to the FS, the 2012 work plan at Santo Domingo also includes preparation of an Environmental Impact Study, filing of the permit application and completion of in-fill and geotechnical drilling programs that are currently underway. The bidding process for the power contract is also scheduled for 2012, with the contract expected to be awarded early in 2013.
About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian mining company with two producing copper mines, the Cozamin copper-silver-zinc-lead mine located in Zacatecas State, Mexico and the Minto copper-gold-silver mine in Yukon, Canada. In addition, Capstone has two development projects, the large scale 70% owned Santo Domingo copper-iron-gold project in Chile in partnership with Korea Resources Corporation and the 100% owned Kutcho copper-zinc-gold-silver project in British Columbia, as well as exploration at properties in Chile, British Columbia and Australia. Using its cash flow and strong balance sheet as a springboard, Capstone aims to grow organically through continued mineral resource and reserve expansions and through acquisitions in politically stable, mining-friendly regions. Capstone is included in the S&P/TSX Composite Index and S&P/TSX Global Mining Index. Additional information is available at http://www.capstonemining.com.
Cautionary Note Regarding Forward-Looking Information
This document may contain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this document and Capstone Mining Corp. (the "Company") does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation.
Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, dependence on key personnel, labour pool constraints, labour disputes; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; and other risks of the mining industry as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at http://www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.
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SOURCE Capstone Mining Corp.