Capstone Mining (CS)

[RobbyGG]

Q3/14 Cash Costs In line; EPS Miss on Lower Realized Copper

Some recent news from analyst Daniel Earle:

Capstone reported Q3/14 financial results yesterday evening following the pre-release of production results on October 7

Daniel Earle estimated adjusted EPS of $0.03, below both TD at $0.05 and consensus of $0.06; the miss was due to a lower realized copper price and slightly higher treatment and selling costs versus Daniel Earle's estimates

CFPS of $0.15 was in line with both TD and consensus of $0.15
Copper production from the Cozamin, Pinto Valley and Minto mines totaled 26.2 kt at net cash costs of $1.84/lb in Q3/14; net cash costs were slightly lower than Daniel Earle's estimate of $1.89/lb due to lower unit costs at Minto

Guidance for 2014 remains unchanged at approximately 102 kt of copper at net cash costs of $1.90-$2.00/lb

The impact has been neutral.

Pinto Valley produced 15,819 tonnes of copper in concentrates and 650 tonnes of copper cathode at cash costs of $1.90/lb, in line with Daniel Earle's estimate of $1.89/lb.

As a reminder, on September 5 Capstone announced the launch of $300mm of Senior Notes maturing in 2022, to repay its two existing credit facilities, however due to weak general market conditions for debt financing, the company discontinued the effort.