Capstone Copper TSE: CS reported first-quarter 2026 results highlighted by steady production across its portfolio, record profitability amid higher copper prices, and continued progress on growth projects in Chile, management said on an earnings call recorded April 29.
President and CEO Cashel Meagher said the company entered 2026 positioned for “operational stability and cash generation,” adding that it has not seen operational impacts from the conflict in the Middle East due to its operating locations and supply chain. Meagher also pointed to ongoing cost pressure from diesel and sulfuric acid, emphasizing continued focus on cost discipline and maintaining a strong financial position.
Quarterly production, costs, and unchanged 2026 guidance
Meagher said consolidated copper production in Q1 totaled 48,000 tonnes at a consolidated C1 cash cost of $2.66 per pound. The company reiterated full-year 2026 guidance of 200,000 to 230,000 tonnes of copper at C1 cash costs of $2.45 to $2.75 per pound.
Meagher said a strike at Mantoverde in January reduced quarterly output by roughly 5,000 tonnes of copper, an impact already included in annual guidance. He added Mantoverde returned to design throughput rates after the strike and delivered record recoveries at its sulfide plant in the quarter.
Record EBITDA and balance sheet de-leveraging
Senior Vice President and CFO Raman Randhawa said LME copper prices averaged $5.83 per pound in Q1, up from $5.03 per pound in Q4, while Capstone realized $5.92 per pound. Randhawa said the company generated gross margins of $3.26 per pound, or 55%, and delivered record adjusted EBITDA of $329 million, up 83% year-over-year.
Randhawa also reported adjusted net income attributable to shareholders of $95 million, or $0.12 per share. He said net debt ended the quarter at $738 million, down $43 million from the prior quarter, driven primarily by strong operating cash flow supported by high commodity prices.
He noted operating cash flow included a $30 million repayment on an early deposit under the company’s gold stream with Wheaton Precious Metals, which eliminated associated delay payments and removed a $22 million liability. Randhawa said $290 million remains available under the arrangement to fund construction of Santo Domingo.
Net leverage fell to a net debt-to-EBITDA ratio of 0.7x, and Randhawa said the company had surpassed its stated goal of being below 1x ahead of a Santo Domingo final investment decision. He said available liquidity exceeded $1 billion as of March 31, including $394 million in cash and $652 million undrawn on the corporate revolving credit facility.
Operations update: Mantoverde, Mantos Blancos, Pinto Valley, Cozamin
SVP and COO Jim Whittaker provided site-level performance details:
- Mantoverde: Produced 19,018 tons of copper at a combined C1 cash cost of $2.59 per payable pound. Throughput averaged 27.7 thousand tons per day, exceeding design capacity in February and March. Grades averaged 0.61% as lower-grade stockpiles were processed, while recoveries reached a record 90.3%.
- Mantos Blancos: Total sulfide and cathode production of 12,301 tons at a C1 cash cost of $3.02 per payable ton. Throughput averaged 19.7 thousand tons per day with four days of planned maintenance. Grades of 0.73% were in line with mine sequence expectations, and the company continues to expect higher grades in 2027.
- Pinto Valley: Produced 10,711 tons at a C1 cash cost of $3.46 per payable pound. Whittaker said unplanned maintenance affected the quarter at the filter plant and concentrate storage facility. Management described ongoing improvements to maintenance processes, hiring of key site roles, and a planned Q3 shutdown of roughly 10 days to rebuild the primary crusher mainframe and enhance the filter plant and concentrate storage areas.
- Cozamin: Produced 5,930 tons at a record low C1 cash cost of $0.71 per payable pound, benefiting from higher silver by-product credits. Whittaker said the site posted record quarterly EBITDA of $65 million.
On Q&A, Meagher said April performance was “tracking… quite well,” citing steady Cozamin operations, good throughputs at Mantos Blancos, and strong Mantoverde throughput despite a scheduled April shutdown. He also said Pinto Valley was doing “a little better” than in Q1, approaching about 44,000 tons a day in April.
Asked about longer-term Pinto Valley throughput, Meagher said the plant’s instantaneous capacity is about 62,000 tons per day but suggested that sustained performance at the end of 2026 could be around 52,000 to 53,000 tons per day as a “strong achievement,” with a longer-term focus near 55,000 tons a day.
Growth pipeline: MV-O execution, Mantos Blancos Phase II, and Santo Domingo workstreams
At Mantoverde, Whittaker said the Mantoverde Optimized (MV-O) project remained on schedule and budget. He said key equipment deliveries began in Q1 and continued construction will focus on the concentrator plant, tailings storage facility, and desalination plant. Most project tie-ins are scheduled during an extended 15-day maintenance period in Q3, followed by ramp-up in Q4 2026. Whittaker said expanded sulfide throughput capacity of about 45,000 ore tons per day is expected to be sustained starting in early 2027, adding about 20,000 tons per year of copper at a capital intensity of approximately $9,000 per ton.
On Mantos Blancos, Whittaker said the company plans to submit an EIA permit application in Q2 for the Phase II brownfield expansion, followed by a pre-feasibility study in Q3.
Meagher said Capstone expects a Q4 sanctioning decision at Santo Domingo and continues to advance engineering, financing strategy with its joint venture partner, and potential infrastructure alternatives. He said detailed engineering is progressing toward approximately 60% completion (targeted for September) and that offsite infrastructure—particularly port strategy—remains a major swing factor for capital requirements.
Discussing CapEx escalation, Meagher said the company’s previously published estimate of $2.3 billion was in 2023 U.S. dollars and that compounded escalation since then could be “somewhere between 10%–15%” on that original scope, while stressing it was premature to provide an updated overall CapEx figure given ongoing negotiations and alternatives for port and other infrastructure.
Meagher also said the company expects to provide an update on port partnership discussions “in the next couple of months,” describing multiple negotiations, including potential use of existing regional port capacity or a build-own-operate-transfer structure, alongside a self-perform base case.
Input cost sensitivities: diesel and sulfuric acid; cathode flexibility
Randhawa outlined sensitivities tied to higher diesel and sulfuric acid prices. He said Capstone expects to consume about 134 million liters of diesel for the remainder of 2026 and estimated each 10% move in diesel prices would impact direct costs by about $13 million from April onward, including $9 million (about $0.02 per pound) on consolidated cash costs and $4 million related to capital stripping. The company used $60 per barrel as a guidance proxy, he said.
For sulfuric acid, Randhawa said Capstone expects to consume roughly 590,000 tons for the remainder of 2026, with 55% fixed at about $185 per ton and 45% exposed to spot pricing, weighted to the second half. He estimated each 10% move in sulfuric acid prices would affect direct costs by about $5 million, or $0.01 per pound, from April onward. He added the company had confidence in supply for 2026, with about 70% contracted from Chile, Peru, and Asia excluding China.
On the cathode business and high acid costs, Meagher said the company was focused more on cost exposure than supply availability, and Randhawa said management evaluates cathode operations on an incremental basis. Randhawa added that when considering whether to process oxide material into leach versus moving it to waste, removing allocated mining costs can change the economics, noting it could reduce reported cathode costs by roughly $0.60–$0.70 per pound versus figures that use a full-costing method.
Randhawa said the company is “fully exposed” to market acid pricing beginning in 2027. Asked about current spot acid prices in Chile, Randhawa said prices had moved from about $400 to around $420–$430 per ton “as of today.”
Meagher also described potential longer-term levers to reduce acid dependence, including a BIOX leaching component associated with MV-O and a future pyrite agglomeration approach that could reduce sulfuric acid requirements for leaching by about 30%, alongside potential cobalt-related ambitions he referenced at Mantoverde and Santo Domingo.
Capstone said it expects to report second-quarter results in July.
About Capstone Copper TSE: CS
Capstone Copper Corp is a company that mines, explores, and develops mineral properties in the Americas. Specifically, the group has operating mines in the US, Mexico, and Canada, and development projects in Chile and Canada. Capstone's main focus is copper, but the company also produces zinc, lead, molybdenum, silver, and gold.
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