Capstone OKs $176M Chile copper spend despite cost rise

[Redator]

Capstone Copper (TSX: CS) (ASX: CSC) said it’s going ahead with the costlier-than-expected expansion of a sulphide concentrator at its Mantoverde property in Chile in a move that will add six years to the mine’s life. The stock rose.

Increasing the concentrator’s daily processing capacity from 32,000 to 45,000 ore tonnes will allow the facility to produce 20,000 extra tonnes of copper and 6,000 more ounces of gold a year, Capstone said Friday. it will also extend the mine life to 25 from 19 years.

Dubbed Mantoverde Optimized, the project is now expected to cost $176 million (C$241 million), about 20% more than a previous estimate. Capstone blamed the increase on scope changes and general inflation.

Vancouver-based Capstone is counting on an expanded Mantoverde to help it more than double annual copper output to about 400,000 tonnes in a few years from 2024’s 180,000 tonnes. The Chilean facility is on pace to produce between 97,000 and 112,000 tonnes of the red metal this year. In comparison, Canada’s largest copper producer, First Quantum Minerals (TSX: FM) delivered 431,000 tonnes last year with its primary mine, Cobre Panama, closed by authorities.

‘No-brainer’

While the revised construction budget is higher, “the updated figure is below our current estimate of $200 million,” Orest Wowkodaw, a mining at Scotia Capital in Toronto, said in a note Friday. Mantoverde Optimized “is a ‘no-brainer’ expansion given the very low capital intensity, short development timeline, low technical risk, and attractive returns.”

Capstone shares rose 4.4% to C$9.12 Friday morning in Toronto following the announcement. That gave the company a market capitalization of just under C$7 billion.

Capstone wins key permit for $150M Mantoverde expansion

Located in Chile’s Atacama region, Mantoverde is an open-pit copper-gold mine that has produced copper cathodes since the 1990s.

Construction work will require about year, followed by a ramp-up period in the fourth quarter of 2026, Capstone said. Mantoverde should hit the 45,000 tonne-per-day throughput level in early 2027, with higher cathode production beginning in the second quarter of that year, the company said.

Capex boost

Capstone now expects to spend $375 million globally on capital expenditures in 2025, the company said Friday. That’s up from a previous forecast of $315 million.

The $176 million figure for Mantoverde Optimized includes $43 million for the mine, $107 million for the concentrator processing plant, $19 million for oxide leach optimization and $7 million for a desalination plant.

Since the completion of a $870-million development project in 2023, Mantoverde has been able to process copper sulphide reserves in addition to existing oxide reserves. The project involved the addition of the sulphide concentrator and a tailings storage facility, as well as the expansion of the existing desalination plant.

Capstone owns 70% of Mantoverde, while Japan’s Mitsubishi Materials owns the remainder.