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Capstone Copper (TSX: CS) (ASX: CSC) announced on Tuesday that the Mantoverde development project (MVDP) in Atacama, Chile, has now reached commercial production, with the mill currently operating at roughly 75% of nameplate throughput.
Mantoverde is 70% owned by Capstone, with Japan’s Mitsubishi Materials owning the other 30%. The mine consists of four open pits situated along the Mantoverde fault, each of which contains both sulphide and oxide ores. Since 1990 and up until this year, only the oxides have been mined at Mantoverde.
The MVDP is designed to increase annual copper cathode production at the Mantoverde mine operation from around 35,000-40,000 tonnes to 120,000 tonnes. The project involves processing sulphide ores on top of oxides in a new 32,000-tonne-a-day concentrator, plus a tailings factily and an expanded desalination plant.
Construction of MVDP, which is estimated to cost $870 million, was completed in late 2023. Upon completion, about 75% of Mantoverde’s production will come from low-cost sulphide ores.
With MVDP achieving commercial production and ramping up, alongside the ramp-up performance at the Mantos Blancos mine in Antofagasta, Capstone expects the fourth quarter to be the strongest quarter of the year across the portfolio.
However, the company also noted that the ramp-ups are occurring later than expected, which it said will result in this year’s consolidated copper production trending to the lower end of its guidance range of 90,000-220,000 tonnes of copper, while cash costs will trend in the higher end of guidance.
After MVDP, Capstone is eyeing a further expansion at Mantoverde, also known as the optimized Mantoverde development project, that involves expanding the sulphide concentrator to increase the annual throughput to 45,000 tonnes per day. This is expected to bring on an additional 20,000 tonnes per annum of copper for approximately $146 million of capital.
For the optimized project, Capstone released on Tuesday a feasibility study that supported an extended 25-year mine life with total incremental production of 368,000 tonnes of copper and 215,000 ounces of gold.
The production was supported by on a higher sulphide mineral reserve estimate of 398 million tonnes at a copper grade of 0.49% and a gold grade of 0.10 g/t, and also a higher oxide reserve estimate of 236 million tonnes at a soluble copper grade of 0.21%.
The FS outlined an after-tax net present value at an 8% discount rate of $2.9 billion for the Mantoverde operation on a 100%-basis, based on a $4.10/lb long-term copper price assumption.
John MacKenzie, Capstone’s CEO, said the feasibility study, when combined with the recently released Santo Domingo FS, defines the “next phase of transformational growth” for the company.
“MV Optimized is a capital-efficient, high-return and low-risk expansion project that is expected to bring on an additional 20,000 tonnes per annum of copper for approximately $146 million of capital. We see the MV-SD district producing approximately 250,000 tonnes of copper per annum, placing it amongst the largest producing copper districts in the world,” he added.
Capstone now plans to begin construction of the MV Optimized project following acceptance of its environmental permit application and board approvals. The permit application was submitted earlier this year, and approval is expected in the first half of 2025.
Capstone Copper’s shares closed Tuesday’s session 1.7% higher at C$10.75 apiece, for a market capitalization of C$8.2 billion.
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