Capstone Copper Delivers Strong Third Quarter, But Revises Guidance Due to Acceleration Delays

Capstone Copper Delivers Strong Third Quarter, But Revises Guidance Due to Acceleration Delays

Capstone Copper (ASX:CSC, TSX:CS) reported a productive third quarter for 2024. For the period ending September 30, Capstone achieved consolidated copper production of 47,460 tonnes, marking an 18% increase over the third quarter of the previous year. This increase was primarily attributed to the Mantoverde Development Project (MVDP) in Chile, which reached commercial production status. The company noted that ramping up MVDP production continues, with the project budget in line with estimates of $870 million.

CEO John MacKenzie expressed confidence in the company’s growth trajectory, saying, “The third quarter marked an important step in the transformation of our business, with tangible results in our leading growth.” It added that the fourth quarter is expected to be the strongest quarter, with further production increases and cost reductions expected.

Financially, Capstone reported net income attributable to shareholders of $12.5 million, a significant improvement over the loss of $32.9 million in the same quarter last year. Adjusted EBITDA nearly doubled to $120.8 million, supported by higher copper production and a favorable copper price, which averaged $4.24 per pound. Operating cash flow before changes in working capital reached $116.9 million, up from $59.2 million in the third quarter of 2023.

Despite the positive results, Capstone’s production forecast for 2024 has been revised, with the company expecting copper production to end at the lower end of the original range of 190,000 to 220,000 tonnes. This adjustment reflects delays in ramping up both Mantoverde and Mantos Blancos, which also impacted C1 cash costs, revised from $2.60 to $2.80 per pound.

Beyond operational results, Capstone’s strategic initiatives are progressing. The recently announced Mantoverde Optimized Expansion Project aims to increase copper production capacity at a low capital cost, with construction expected to begin following environmental approvals in 2025. Additionally, the Santo Domingo Project Feasibility Study projects an after-tax NPV of $1.72 billion, promising to generate long-term value with significant copper and iron production capacity.

Shares are trading 3.56% lower at $10.58.

Leave a Reply

Your email address will not be published. Required fields are marked *