Capstone Mining (CS.TO) has released its production numbers for 2013, wherein it produced 113.8 million pounds of copper. Not surprisingly, the fourth quarter accounted for almost half of the output for the entire year, as the copper production from the newly acquired Pinto Valley project was added to the production numbers.
The production numbers at Pinto Valley are extremely encouraging, as the company exceeded its official guidance by producing 31 million pounds of copper. The Pinto Valley mill is currently operating very close to its designed throughput of 50,000 tonnes per day, and it looks like Capstone will be on track to produce in excess of 210 million pounds of copper this year at an average C1 cash cost of approximately $1.75/lbs which would result in a gross operating cash flow of $300M and a net cash inflow of $150M at the current copper price (as its capital expenditures at Cozamin and Minto will drop substantially this year). Together with Nevada Copper (NCU.TO), Capstone Mining is one of our favorite copper plays for 2014.
Disclosure: The author holds a long position in Capstone Mining. Please see our disclaimer for current positions.