Capstone Copper Corp ((TSE:CS)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call by Capstone Copper Corp presented a generally positive outlook for the company, highlighted by record copper production and successful operational ramp-ups at its key sites, Mantoverde and Mantos Blancos. Financial performance was notably strong, marked by significant deleveraging and improved cash costs, although the company faced some operational challenges at Pinto Valley and delays in copper sales which slightly dampened the overall sentiment.
Record Copper Production
Capstone Copper Corp achieved a new milestone with record consolidated copper production of 53,900 tonnes in the fourth quarter of 2024, culminating in a full-year production of 184,500 tonnes. This marks a substantial 12% increase compared to the previous year, 2023, demonstrating the company’s enhanced operational capabilities and strategic focus on production efficiency.
Successful Ramp-Up at Mantoverde and Mantos Blancos
The company reported successful ramp-ups at Mantoverde and Mantos Blancos. Mantoverde exceeded commercial production levels and surpassed its nameplate throughput capacity, while Mantos Blancos unlocked its design mill capacity, maintaining throughput levels above target. These achievements underscore Capstone’s operational prowess and effective project execution.
Financial Strength and Deleveraging
Capstone Copper has showcased its financial strength by reducing net debt by $185 million compared to 2023. The company’s net debt-to-EBITDA ratio significantly improved from 3.6x to 1.5x by the end of 2024. This deleveraging reflects Capstone’s commitment to strengthening its financial position and enhancing shareholder value.
Improved Cash Costs
The company reported a decrease in consolidated C1 cash costs to $2.56 per pound in the fourth quarter, with notable reductions at Mantoverde and Mantos Blancos. This improvement in cash costs is a testament to Capstone’s focus on cost efficiency and operational excellence.
Operational Challenges at Pinto Valley
Despite the positive results, Capstone faced operational setbacks at Pinto Valley due to electrical and mechanical issues. These challenges led to lower production rates and increased costs, highlighting areas for potential improvement in operational resilience.
Delayed Copper Sales
Seasonal swells at load ports in Chile resulted in copper sales falling below production levels, impacting EBITDA by approximately $11 million in the fourth quarter. This issue underlines the logistical challenges the company must navigate to align sales with production effectively.
Forward-Looking Guidance
Looking ahead, Capstone Copper provided guidance for 2025, targeting copper production between 220,000 to 255,000 tonnes and cash costs ranging from $2.20 to $2.50 per pound. The company plans to focus on operational execution, advancing the Mantoverde Optimized project, and further deleveraging its balance sheet as part of its strategic priorities for the upcoming year.
In summary, Capstone Copper Corp’s earnings call painted a largely positive picture with record production, successful project ramp-ups, and strengthened financial metrics. While operational challenges and sales delays posed some hurdles, the company’s forward-looking guidance reflects a continued commitment to growth and efficiency, promising a potentially robust performance in the coming year.
