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Capstone Mining's Q4: Great Quarter To Be Followed By An Even Better One

Mar. 02, 2021 2:59 PM ETCapstone Copper Corp. (CSCCF), CS:CAWPM, WPM:CA38 Comments


  • Capstone Mining produced 44.4 million lb copper at a C1 cash cost of $1.68/lb in Q4.
  • The copper production, revenues, operating cash flow, and net income reached new record highs.
  • After the recently completed silver stream sale, Capstone's net debt declined to negative values.
  • In 2021, Capstone should produce 175-190 million lb copper, at a C1 cash cost of $1.75-1.9/lb.

Capstone Mining's (CSFFF) Q4 2020 was very good. The company set new record highs in revenues, operating cash flow, earnings, and also in the volume of copper production. The net debt declined and Capstone is progressing with the Santo Domingo development plans.

Capstone produced 44.4 million lb copper in Q4. At the Pinto Valley mine, 34.1 million lb were produced, and at the Cozamin mine, 10.3 million lb were produced. Compared to Q3, Capstone's copper production increased by 15%. The growth is attributable especially to Pinto Valley, where production increased from 27.9 million lb to 34.1 million lb copper. The production growth is the result of a successful implementation of the optimization plan. The second phase of the optimization plan should be completed by the end of this year. The C1 cash cost declined to $1.68/lb, which is 7.7% lower than in Q3 and 14.7% lower than in Q4 2019. Capstone's overall 2020 copper production amounted to 156.9 million lb, at a C1 cash cost of $1.84/lb. It means that Capstone was able to beat the 2020 guidance of 140-155 million lb copper at a C1 cash cost of $1.85-2.0/lb.

Source: Own processing, using data of Capstone Mining

Capstone's copper sales equaled 39.3 million lb. It is slightly less than 39.8 million lb sold in Q3. However, the average realized copper price improved from $3.13/lb to $3.64/lb. Therefore, the revenues grew by 13.5%, to $148.1 million. Also, the operating cash flow increased rapidly, from $27.7 million in Q3 to $67.4 million in Q4. The net income increased from $2.4 million in Q3 to $27.6 million in Q4. Revenues, operating cash flow, and also net earnings reached new record highs. The Q4 EPS equaled $0.07.

Source: Own processing, using data of Seeking Alpha and Capstone Mining

Capstone's cash position improved slightly, from $56.9

This article was written by

Peter Arendas profile picture
An in-depth analysis of the royalty and streaming industry

I am an associate professor at the University of Economics in Bratislava, Department of Banking and International Finance. My dissertation was focused on commodity markets and my habilitation was focused on the calendar anomalies. I have more than 15 years of investing experience. My investments mostly focus on small- and mid-cap companies in the resource sector. Since May 2019, I have been preparing regular monthly reports focused on the precious metals royalty & streaming industry. Based on positive feedbacks and numerous inquiries, I decided to launch a Marketplace Service named "Royalty & Streaming Corner", which provides an in-depth analysis of this exciting market segment, as well as investment ideas from the mining industry.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in CSFFF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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