Aug 6 2015
Capstone Mining Corp. ("Capstone") has received the new Water Use Licence ("WUL") for the Minto Mine. This WUL completes the final stage of permitting for all of the mineral reserves identified in the July 2012 Phase VI Pre-Feasibility Study. Most importantly, this licence is required in order to commence stripping of the high-grade, shallow Minto North deposit.
"We are very pleased to have received the long-anticipated WUL to support the production extension at Minto," said Darren Pylot, Capstone's President and CEO. "Access to the high-grade mineralization at Minto North will have a very positive impact on the continuation of jobs and economic benefit in Yukon. The mining of the Minto North deposit also makes a significant contribution to the economics of the mine and to Capstone's cash flow in 2016."
Ramp-up in preparation for pre-stripping the Minto North pit will commence immediately, with ore from Minto North starting to feed the mill in December 2015, followed by significant high-grade ore released in the second quarter of 2016. For the balance of 2015, the mill will continue to process underground and stockpiled ore. In 2016, the mill will process predominately ore from Minto North supplemented by underground and stockpiled ore.
Minto is expected to surpass its 2015 production guidance. Positive underground grade reconciliations and unplanned ore received primarily from the Area 2 switchback early in the year, are projected to more than offset the shortfall that resulted from the delay in receiving the WUL. In addition, the mine plan has been revised to mine Minto North in a staged approach to mitigate some of the delay. Production in 2016 is expected to be approximately 60 million pounds of copper. The majority of the 2015 capitalized stripping guidance of $23.6 million is still expected to be spent in 2015.
The Minto Mine commenced operations in 2007 with a six year mine life from the Main pit, the only known ore deposit at that time. Since then, successful exploration has extended the mine life to 2021. Under the regulatory process in Yukon, new permits are required each time additional reserves are brought into the mine plan. Capstone made an application to the Yukon Environmental Socio-Economic Assessment Board ("YESAB") for all copper reserves (exclusive of resources) identified on the property as at July 2013 and YESAB recommended in favour of the proposed continuation of operations at Minto in April 2014. Application for the amended Quartz Mining License ("QML") and WUL was made on July 2, 2014. Approval of the QML amendment for Minto North was received in September 2014 and approval for the full Phase V/VI QML amendment in December 2014.