Capstone Copper's Q2 2024 Financial and Operational Highlights
CSC (CSC) Share Update August 2024 Thursday 1st
Capstone Copper Reports Strong Q2 2024 Results and Updates on Key Projects
Capstone Copper Corp. (TSX: CS) has announced its financial and operational results for the second quarter of 2024, showcasing a strong performance and significant progress in key projects.
Instant Summary:
- Q2 2024 copper production of 40,937 tonnes at C1 cash costs of $2.84/lb.
- Net income attributable to shareholders of $29.3 million, or $0.04 per share.
- Adjusted EBITDA of $123.1 million, up from $43.4 million in Q2 2023.
- First saleable copper concentrate produced at Mantoverde Development Project.
- Updated feasibility study for Santo Domingo project with an after-tax NPV of $1.7 billion.
Operational and Financial Performance
Capstone Copper reported consolidated copper production of 40,937 tonnes for Q2 2024, achieving C1 cash costs of $2.84 per pound. This marks a 4% increase in production compared to Q2 2023, primarily driven by higher production at the Pinto Valley mine.
The company reported a net income attributable to shareholders of $29.3 million, or $0.04 per share, a significant improvement from the net loss of $36.5 million in Q2 2023. This turnaround is attributed to higher realized copper prices and the absence of a $53.9 million provision related to the Minto obligation recorded in Q2 2023.
Project Updates
Capstone's Mantoverde Development Project (MVDP) achieved a major milestone by producing its first saleable copper concentrate in June 2024. The project is on track to reach nameplate production levels by Q3 2024, with total capital expenditures remaining at $870 million.
The company also released an updated feasibility study for its Santo Domingo project in Chile, outlining a $2.3 billion initial capital project with an after-tax NPV of $1.7 billion. This project is expected to significantly contribute to Capstone's growth strategy in the Atacama region.
Financial Highlights
Capstone reported adjusted EBITDA of $123.1 million for Q2 2024, a substantial increase from $43.4 million in Q2 2023. Operating cash flow before changes in working capital was $102.9 million, compared to $22.0 million in the same period last year.
As of June 30, 2024, Capstone's net debt stood at $741.3 million, with total available liquidity of $538.7 million, comprising $138.7 million in cash and short-term investments, and $400.0 million in undrawn amounts on the corporate revolving credit facility.
The robust financial performance and significant project milestones are likely to positively impact Capstone Copper's stock price. The successful production of saleable copper concentrate at Mantoverde and the promising feasibility study for Santo Domingo are key growth drivers. However, investors should be mindful of the company's net debt and the potential impact of fluctuating copper prices on future earnings.
Investor Reaction:
Analysts are likely to react positively to Capstone's strong Q2 results and the progress in its key projects. The higher realized copper prices and improved operational efficiency are expected to boost investor confidence. However, some caution may remain due to the company's net debt levels and the broader market conditions.
Conclusion:
Investors should closely monitor Capstone Copper's progress in achieving nameplate production at Mantoverde and the development of the Santo Domingo project. The company's strategic initiatives and financial performance indicate a promising outlook, making it a stock to watch in the copper mining sector.