VANCOUVER, British Columbia, September 22, 2014 /PRNewswire/ --
Capstone Mining Corp. ("Capstone") (TSX: CS) today announced that it has received an amended Quartz Mining License for the Minto North Deposit as outlined in the Phase V/VI Pre-Feasibility Study. It has not, however, received its Water Use License ("WUL") amendment, which the Yukon Water Board believes is required in order to commence pre-stripping of Capstone's Minto North pit.
Underground mining and milling operations are not affected and production guidance at Minto for 2014 is unchanged. The mill will process underground ore and stockpile for the remainder of the year as planned. The 2014 mine plan submitted in the license applications did however call for pre-stripping of the Minto North open pit, starting in September 2014. The delay in starting the pre-stripping of Minto North has resulted in a revised mine plan which will bring forward fully permitted underground ore from Area 118, starting later this month, to maintain full mill production and partially offset the 2015 shortfall in ore from the Minto North open pit. Production in 2015 is not expected to be materially different than 2014, however the most significant production from Minto North will shift from 2015 to 2016.
As a result of the delay in pre-stripping, the surface mining contractor will be downsizing its crew at Minto, affecting approximately 50 people. This downsizing is in addition to the 44 jobs affected with the surface mining contractor in January 2014, when Minto slowed open pit mining to better align with the expected permitting timeline. Following the downsizing by the surface mining contractor, total direct and contract employment at Minto is approximately 250 people. Capstone's 171 employees and present underground mining contract employees are not affected. Support contractor positions will be evaluated based on the reduction of personnel for the mining contractor.
"We are pleased to have received our Quartz Mining License amendment, however we believe the most prudent course of action is to delay the Minto North pre-stripping until we receive our WUL," said Darren Pylot, Capstone's President and CEO. "There is no change to our copper production guidance at Minto for 2014 and no material difference expected in 2015."
"The most regrettable result is job losses at our surface mining contractor. We will continue to work closely with the Water Board staff in order to be in a position to recall our surface mining contractor as quickly as possible."
The Minto Mine commenced operations with a six year mine life in 2007 from the Main pit, the only known ore deposit at that time. Since then, successful exploration has extended the mine life an additional nine years to 2021, assuming permits are received. Under the regulatory process in Yukon, new permits are required each time additional reserves are brought into the mine plan. Capstone made application to the Yukon Environmental Socio-Economic Assessment Board ("YESAB") for all remaining identified copper reserves on the property in July 2013 and YESAB recommended in favour of the proposed continuation of operation of the Mine in April 2014. Application was made for the amended Quartz Mining and Water Use Licenses on July 2, 2014.
About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. We are committed to the responsible development of our assets and the environments in which we operate. Our three producing mines are the Pinto Valley copper mine located in Arizona, US, the Cozamin copper-silver mine in Zacatecas State, Mexico and the Minto copper mine in Yukon, Canada. In addition, Capstone has two copper development projects; the large scale 70% owned copper-iron Santo Domingo project in Region III, Chile, in partnership with Korea Resources Corporation, and the 100% owned copper-zinc Kutcho project in British Columbia, Canada, as well as exploration properties in Chile. Using our cash flow and strong balance sheet as a platform, Capstone's strategy is to continue to grow with mineral resource and reserve expansions and exploration, and through acquisitions in politically stable, mining-friendly regions. We will pace our growth with our financial capacity, ensuring we retain, as a priority, sufficient financial flexibility to meet the requirements of our existing operations and our committed development projects, while maintaining an adequate cushion to deal with market volatility and operating risks inherent in the mining industry. Our headquarters are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX). Further 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 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 timely receipt of licenses, the mine plan and sequence at Minto, the continued operation of the Minto Mine, 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", "outlook", "guidance", "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. In this document, certain forward-looking statements are identified by words including "may", "future", "expected", "intends" and "estimates". 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 resources; possible variations in ore reserves, grade or recovery rates; accidents, dependence on key personnel, labour pool constraints, labour disputes; availability of infrastructure required for the development of mining projects; 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 under the Company's profile 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. The Company provides 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.
For further information:
Cindy Burnett, VP, Investor Relations and Communications
SOURCE Capstone Mining Corp.