Capstone Copper Smashes Q2 Records, Clears Path for Mantoverde Expansion

Record Production and Financial Performance

Capstone Copper Corp. has reported a standout second quarter for 2025, setting new company records with consolidated copper production reaching 57,416 tonnes, a 40% increase over the same period last year. This surge was largely driven by the successful ramp-up of sulphide operations at the Mantoverde and Mantos Blancos mines. The company also posted an adjusted EBITDA of $215.6 million, nearly doubling the $123.1 million recorded in Q2 2024, reflecting improved operational efficiencies and higher output.

Despite a slight dip in net income attributable to shareholders to $24 million from $29.3 million in Q2 2024, adjusted net income rose to $27.5 million, underscoring the underlying strength of the business. Operating cash flow before working capital changes more than doubled to $212.4 million, supporting Capstone's robust financial position.

Operational Highlights and Cost Improvements

The company achieved a consolidated C1 cash cost of $2.45 per pound of copper produced, a 12% reduction year-on-year. This improvement was driven by lower unit costs at Mantoverde sulphides ($1.51/lb) and Mantos Blancos sulphides ($1.87/lb), benefiting from higher throughput and grades. However, Pinto Valley faced operational challenges including drought-related water constraints and mechanical issues, resulting in a 37% production decline and increased cash costs to $3.89/lb.

Mantos Blancos and Cozamin mines trended positively, with Mantos Blancos reducing combined cash costs by 35% and Cozamin improving production by 6% while lowering costs by 13%. The cathode business experienced a slight production decrease and higher costs due to acid price inflation, but remains a focus for optimization.

Strategic Growth and Permitting Milestones

A major milestone was achieved with the receipt of the environmental permit for the Mantoverde Optimized (MV-O) project, removing throughput constraints and enabling imminent project commencement. This brownfield expansion aims to increase sulphide concentrator throughput from 32,000 to 45,000 tonnes per day, extending mine life from 19 to 25 years. Capstone approved approximately $20 million in long lead items for MV-O during Q2 and plans further updates following formal sanctioning in Q3.

Beyond MV-O, Capstone is advancing several growth projects including Mantoverde Phase II, which contemplates a second processing line, and the Santo Domingo copper-iron-gold project, with an updated feasibility study highlighting robust economics and a targeted partner announcement expected in Q3. Exploration efforts remain active across the portfolio, with drilling programs progressing at Mantoverde, Mantos Blancos, Sierra Norte, and Cozamin to expand resources and support future development.

Financial Strength and Outlook

Capstone completed a significant refinancing in Q2, repaying $477 million on the Mantoverde project finance facility and securing a new term loan for Mitsubishi Materials Corp.'s share, featuring a two-year grace period. Net debt decreased to $691.9 million, and total liquidity stands at $1.1 billion, providing ample capacity to fund ongoing operations and growth initiatives.

The company reaffirmed its 2025 guidance of 220,000 to 255,000 tonnes of copper production at C1 cash costs between $2.20 and $2.50 per pound. Higher production is expected in the second half of the year, driven by improved mine sequencing and the transition out of lower-grade ores at Mantoverde. Capital expenditure guidance remains at $315 million for sustaining and expansionary projects, with additional allocations for capitalized stripping and exploration.