1
Pinto Valley MineBMO Investor Tour – February 2015
22
This presentation, and the documents incorporated by reference herein, may contain “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking
statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). These forward-looking statements are made as of
the date of this document and Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities
legislation.
Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events and include, but are not limited to,
statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of
production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain
cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “outlook”, “guidance”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”,
“might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. In this document, certain forward-looking statements are identified by words
including “may”, “future”, “expected”, “intends” and “estimates”. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-
looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices
of resources; possible variations in ore reserves, grade or recovery rates; accidents, dependence on key personnel, labour pool constraints, labour disputes; availability of infrastructure required
for the development of mining projects; delays or inability to obtain governmental and regulatory approvals for mining operations or financing or in the completion of development or
construction activities; compliance with debt covenants, and other risks of the mining industry as well as those factors detailed from time to time in the Company’s interim and annual financial
statements and management’s discussion and analysis of those statements, all of which are filed and available for review under the Company’s profile on SEDAR at www.sedar.com.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there
may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company provides no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking
statements.
Alternative Performance Measures“C1 Cash Cost”, “Cash Cost” and “Adjusted Net Earnings” are Alternative Performance Measures. Alternative performance measures are furnished to provide additional information. These
performance measures are used by management to monitor performance, to plan and to assess the overall effectiveness and efficiency of mining operations. These performance measures may
not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance included
in the Company’s unaudited condensed interim consolidated financial statements prepared in accordance with IFRS.
CurrencyAll amounts are in US$ unless otherwise specified.
Cautionary Note Forward Looking Information
33
Located ~10 km west of the town of Miami in Gila, County, Arizona
129 km from Phoenix to Pinto Valley via US Highway 60
Close proximity to other copper mining operations
Fully permitted with established infrastructure and skilled workforce
Location: Historical Mining District
The Globe-Miami historical mining district is one of the world’s most favorable jurisdictions for tax, regulation and labour
4
Close Proximity to Other Mining Sites
Source: Google maps.
City of Miami
Pinto Valley
FreeportMiami
KGHMCarlota
BHPB Copper Cities
BHPB Miami
Potential for future strategic relationships
55
History of Pinto Valley Mine
Pinto Valley Historical Production / Copper Prices
Source: BHP Copper
66
Collective Bargaining Agreement
Collective Bargaining Agreement at Pinto Valley
Contract expired on June 30, 2014
Capstone currently in negotiation process
Hourly employees represented by a joint union comprised of six constituent unions:
The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Services Workers International Union, AFL-CIO-CLC
International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, Local No. 104
International Union of Operating Engineers, Local No. 428, AFL-CIO
International Brotherhood of Electrical Workers, Local No. 518, AFL-CIO
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local No. 627, AFL-CIO
United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local No. 469, AFL-CIO
77
Geology
88
Regional Geology
Basement rocks: Proterozoic units
Pinal schist (~1,700 Ma)
Ruin granite (1,420 Ma)
Apache Group sediments
Apache diabase sills (~1,150 Ma)
Overlain by Paleozoic marine sediments
Subduction of Farallon Plate initiated arc magmatism (80-50 Ma)
Schultze granite intruded (~65-59 Ma) and brought source fluids responsible for the deposits in the district s
Pinto Valley
Modified from Creasey (1980)
Late porphyry phase magmatism mineralized Pinto Valley ~60-59 Ma
99
Regional Geology
Extensional faulting facilitated exposure of Cu deposits
Tertiary basin and range extension and faulting (35-15 Ma) facilitated dismemberment and exposure of deposits
Preservation through deposition of Whitetail conglomerate (Oligocene) and Apache Leap tuff (Miocene)
Further extension and faulting deposited the Gila conglomerate (Pliocene) into basins
Modified from Creasey (1980)
1010
Local Geology
Schultze granite represented at PV by granodiorite and granite porphyry intrusions along South Hill fault
Ruin granite and Apache diabase host mineralization (chalcopyrite, pyrite, magnetite, molybdenite)
Development of oxide cap and supergene blanket, since mined out; sulphide ore mineralogy remain
Approximate PV pit outline
Modified from Peterson (1962)
Long lived fault systems provided structural conduits for mineralizing fluids
1111
Operations
1212
2012 BHPB Restart Capital Cost ($US M)1
Mine Fleet $63.8 (33%)
Processing $43.7 (22%)
Owner Cost $27.1 (14%)
Infrastructure $21.2 (11%)
EPCM $14.2 (7%)
SMARRCO $11.4 (6%)
Contractors' Indirect (2)
$8.9 (5%)
Mine$3.9 (2%)
1.Source BHP Copper. 2. The cost of employing contractors during project execution.
Lessons learned from previous restart incorporated in $194 million restart capital
Acquired new mining fleet
Upgraded electrical and controls
Significantly improved plant conditions to HSEC standards
In-sourced mining
Pinto Valley operations have been elevated to world-class standards
1313
Restart Investment
Restart capital focused on enhancing the stability of operations
Infrastructure Installed new IM network Repaired water system
Tailings Thickeners Replaced piping
Flotation Replaced regrind lube
system Upgraded instrumentation
Primary Crusher Refurbished crusher Replaced belt Installed new feeder drive Upgraded instrumentation
Fine Crushing Plant Improved feed chutes Installed new tertiary feeder
drives Installed bin spiling Upgraded instrumentation
Grinding Replaced 1 bull gear &
1 discharge trunion Replaced clutches Replaced lube systems Installed new electrical
switchgear Upgraded Instrumentation
1414
Mining Fleet Original PV2 Additional
15 haul trucks, 3 loaders, 2 track dozers, 2 wheel dozers, 2 water trucks, 2 graders, 2 rotary blast hole drills, 1 air track drill
4 haul trucks, 2 hydraulic shovels, 1 rotary blast hole drill, 1 grader, 2 track dozers, 1 wheel dozer, 1 water truck, 1 fuel truck, 1 townhaul
ConcentratorProduction Facilities
Concentrate production facilities include: primary crusher, secondary & tertiary crushers, 6 ball mills, copper concentrate & molybdenum flotation circuits
SX/EW Production Facilities
SX/EW production facilities includes:
Low grade dump leach field, PLS pumping, solvent extraction, electrowinning & raffinate distribution system
Tailings Storage
Tailings storage capacity in place through Phase 2 production
Studies required for future expansions
Pinto Valley Operations
1515
Processing
1616
Pinto Valley Mine: Process Flow Sheet
1717
SX/EW Production Facilities – Sulphide Dump Leach
Electrowinning
Copper is plated onto starter sheets (Cu2+→Cu0) Starter sheets are plated on stainless steel blanks Water dissociates to oxygen gas and acid at anode
(hydrolysis – H2O→2H++½O2) Anodes are lead alloy Production currently averages 9-10 tonnes per day 5N copper LME grade Tank house capacity maximum 27M lbs/year Current density 120A/m2
Solvent Extraction
Pregnant leach solution (PLS) is mixed with organic Copper is selectively extracted into organic Transfer of copper is driven by pH (exchange
of 2H+ for Cu2+) PV PLS is extremely clean Copper is stripped from organic into a low pH electrolyte Solution flow rate capacity 7,000 gpm
Run of mine material above 0.10% and below 0.18% copper grade
1818
By-Products
Molybdenum and silver by-products lower cash cost
MoS2 concentrate is produced –Molybdenum (Mo) is the payable metal
600 tonnes of contained Mo annually LOM
2014 recovery at 20% in start-up, PV2 PFS LOM 47%
Silver is recovered from copper concentrate
235,000 ounces of contained silver annually
1919
Marketable Products
Copper concentrate grade 29% – majority sold in the international market
MoS2 concentrate grade 85% - sold domestically
6.3 million pounds of copper cathode produced annually – sold domestically
Pinto Valley produces clean and high grade concentrate
Truck
Pinto Valley Operations
San Manuel, Arizona
Hayden, Arizona
Guaymas, Mexico
International Markets
SMARRCO Third-Party Rail Shipping
2020
Marketing Strategy
US
Trader
Korea Japan
China
Direct Smelter
Trader
Diversification of customer base and geographies
Maintain flexibility
Mitigate counterparty risk
Develop strategic relationships
Freight savings on US shipments (20% of 2015 pdn)
Spot sales provide market information
Korean sales supports KORES’ objectives
Logistics (per wmt of concentrate)
Includes truck transport, SMARRCO transloading, rail, port costs, ocean transport, supervision, sampling and assaying
• $77 domestic, $133 international
• $125 combined rate per wmt of concentrate
2121
2014 Improvement Initiative:Standing on Stable Ground
22
Ramp-up to 50 ktpd Stabilizing at 50 - 52 ktpd
2013 Ramp-up 2014/15 Stabilize
Steady at 52 ktpd
2016+ Optimize
Pinto Valley 2014 Improvement Strategy
Engaged and empowered workforce to improve site performance
Leveraged existing organizational structure to facilitate continuous improvement
30-week project scope:
Communication, Alignment & Training
Production Planning
Mine Operations
Mobile Maintenance
Plant Maintenance
Concentrator Production
Supply
23
Supply: Sourcing Prioritization Matrix
Easy
Difficult
HighLowCost Savings Opportunity Potential
Ease
of
Imp
lem
en
tati
on
= Implemented
General Contractor
Services
Wave 4 & 5 Categories(TBD)
Pumps & Pump Parts
Fuel
Earth Moving Tires
Supplemental Manpower
Sulfuric Acid for SXEW
= Not Active / Planned
FreightConcentrate/
Acid
Overhead Crane
ServiceLiners (Primary / Secondary Crushers
Grinding Media($ 12.5 M)
qualification phase
Explosives
Empire Parts & W/H
Strategy
LinersBall Mill
Bearings / Belts / Power
Transmission
Wear Metal Parts(TBD)
Chemicals & Reagents
(TBD)
Envir.Sampling
Safety Supplies
High Priority (Wave 1)Medium Priority (Wave 2 & 3)
Lower Priority (Wave 4, etc.)
Lubes
Electrical Supplies
Lime
Drill Fleet Service
Empire MobileEquip. Servic3
= Active
2424
Supply Savings Summary
Category (or Project) Savings (percentage)
Sulfuric Acid (for SXEW Plant) 9.7%
Lubricants 15.3%
Warehouse Delivery Process (in-sourcing) N/A (53.0% net cost reduction)
Lime 13.9%
H/D Mechanics (Mill 12.1% (from 2014 budget)
Goodyear Tire 25% Overall Savings, Haul Truck/Support Eq. Tires
Purcell Tire 15% Overall Price Reduction on Remaining 2014/2015 Contracted Tires
Pump Parts (Warman) 32% Savings based on historical spend
Tire Life Tire Compound 20% Savings based on historical spend, price has one year lock
Nordback Backing Compound 13.5% Savings based on historical spend, price has one year lock
Fuel – Red Dyed #2 Continue to generate weekly savings
Sulfuric Acid 18.3% Savings that will be realized in 2015
Janitorial Services 15.35% Savings under historical spend
Security Services 9.92% Savings
Crane Inspections/Repair 7.2%
5.3% in supply savings totaling $6.6M to date
2525
Asset Reliability Improvement Project
Implement a sound and effective Asset Management Program
Reduce production variance caused by unplanned downtime and poor reliability of equipment
Partner with a Subject Matter Expert (Consultant) with the required skills and expertise to:
Assess existing Maintenance Process (organization, practices, ERP, metrics, etc.)
Propose Maintenance Structure and Maintenance Methodology
Introduce Best Practices (reliability, condition monitoring, KPI’s, parts support, etc.)
2626
Infrastructure
2727
Overview of Water Requirements of Pinto Valley
The Pinto Valley operation requires ~4,200 to 5,000 gallons per minute (gpm) of water
Source: PVM Hydrologist.
Ore
(Moisture)
Fresh
Water
370gpm
Mill
800gpm
Tailings
18,000gpm
22,000gpm
Mo Plant/
Filter PlantCopper Con.
#4 Tailings
Pond
Evaporation
Mill
Tanks
Evaporation
250gpmOpen Pit
Reclaim
370gpm
4,200-5,000gpm
Mill
800gpm
80gpm
Cu+Mo
Thickeners
11,000gpm
18,000gpm
22,000gpm
9gpm
Mill
Tanks
Cottonwood
Reservoir
250gpm
5,000gpm
11,000gpm
720gpm
Tailings
Thickeners
2828
Overview of Water Systems
Burch Pump Station
Burch Booster Pump Station
New water is currently supplied by the water from both the West Water System (Pinto Valley) and the
East Water System (owned by BHPB) which contain a large number of groundwater wells that provide a
high level of confidence in continuous water supply.
East Water SystemWest Water System
SolitudeWells
Miami Garden Wells
Peak WellsSystem
1,800 gpm
Cottonwood Reservoir850 gpm
Diamond H Pit
Myberg Basin 600 gpm
Old Dominion Shaft
700 gpm
Source: PVM Hydrologist. (1) Not operated by BHP Copper
Kiser Basin Well Field1
600 gpm
Miller Well190 gpm
Hoopes Wells 160 gpm
Additional 500 gpm combined
2929
Overview of Electric Power
115 kV redundant power lines from SRP
Three 25 MW transformers in sub-station (current need is 42 MW at full production)
13.8 kV back bone throughout site
4,160 V transformers at various locations
480 V, 240 V and 120 V transformers as needed
Power cost $6.5 cents/kWh
Average monthly cost $1.7M
Electric power supplied by existing Salt River Project (SRP) utility grid.
3030
Tailings Management
/
3131
PV2 Implementation
3232
PV2 PFS March 20141 - Pushbacks
Original pushback (PV1)
PV2 pushback commencing in 2015
PV2 ore production constrained first by permitted capacity of the tailings dam and eventually by surface ownership
Significant amount of additional mineral resource that could be mined if constraints removed
PV2
PV1
PV2
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information. The mine design was completed using standard open pit assumptions and slope design angles as defined by Call & Nicholas, Inc., geotechnical consultants.
3333
Savings recognized in 2014 through competitive bidding
Tailings
New tailings line to Tailings Dam 4
Tailings Dam 4 booster station upgrades
Water
Refurbished peak wells
Water conservation initiatives underway
PV2 Implementation
Mine Equipment
First shovel in production October 2014
Second shovel, trucks, and auxiliary equipment in 2015/16
3434
PV2 PFS March 20141 – Summary
Mine Life (years) 12.3
Mineral Resources 1,[email protected]%
Mineral Reserves [email protected]%
Planned Throughput (ktpd) 50 - 52
Avg. Annual Production – Contained in Concentrate (M lbs)
119.5
Avg. Annual Production – Cathode (M lbs)
6.3
Est. LOM Avg. C1 Cash Costs $2.00
LOM Sustaining Capital ($ millions) $187.9
After-tax NPV, 8% ($M) $738
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. Mineral Reserves and Resources take into account mining activities until January 1, 2014, and are reported above 0.18% Cu Cut-off Grade. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
3535
PV2 PFS March 20141 - Mine Plan
PV2 extended production to 2026
Mining rate increases from 22.5 M tonnes in 2014 to 42 M tonnes in 2016 and decreases from 2020 onwards
2 hydraulic shovels and 4 haul trucks added
LOM strip ratio is 0.65
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
0.40%
0
5
10
15
20
25
30
35
40
45
50
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Co
pp
er G
rad
e %
Mat
eria
l Min
ed (
M t
/yea
r)
Total Material Moved
Capital Expenditure ($M) 47 62 12 12 9 11 14 6 5 5 3 2 0
Payable Copper (k tonnes) 64.1 54.8 65.1 55.8 56.2 54.1 57.0 56.1 54.7 52.3 59.7 41.0 12.0
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
3636
PV2 PFS March 20141 - Mine Plan
Concentrator operates until Q1 2026, SX/EW operates until 2030, with potential to continue operating longer
Payable copper production varies from 115-140 M lbs/year, averaging 119.4 M lbs/year until processing of lower grade ore begins in 2025. SX/EW cathode copper production averages 6.3 M lbs/year
0
20
40
60
80
100
120
140
160
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Co
pp
er lb
s P
ayab
le (
M)
Copper Payable by Year
Concentrator SX-EW
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
3737
PV2 PFS March 20141 - Economic Assumptions
Key Assumptions
Cu Price - Average 2014-2022 $/lb 3.15
Cu Price - long term (2023+) $/lb 2.75
Mo Price $/lb 12.50
Ag Price $/oz 20.00
Copper concentrate grade - Cu % 27.5%
Copper payable % 96.5%
Copper treatment charge $/dmt 85.00
Copper refining charge $/lb Cu 0.085
Concentrate sold internationally % 90
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
38
Ore(M tonnes)
Copper (%)
Molybdenum (%)
Contained Copper (M lbs)
Contained Molybdenum
(M lbs)
Proven 218.97 0.33 0.008 1,593.1 38.6
Probable 13.25 0.33 0.008 96.4 2.3
Total Proven & Probable 232.22 0.33 0.008 1,689.5 41.0
Pinto Valley Mineral Reserves1 – March 2014
PV2 PFS brings reserves to 12.3 years, all within patented property boundaries
1. Mineral Reserve Estimate, January 1, 2014. Economic inputs to the block model were $2.75 per pound copper, mining $2.02 per tonne moved, mill $5.50 per tonne processed, G&A $1.65 per tonne processed and an average copper recovery of 88%. Cut-off Grade – 0.18% Cu 2014 – 2022, excess ore below 0.20% Cu was stockpiled for processing in 2025 -2026. An internal cut-off grade of 0.17% Cu was applied in 2023-2025. Qualified Person is John Marek, Independent Mining Consultants Inc.
3939
Sustaining Capital Costs Estimate ($US M) 2014 PV2 LOM
Mine Equipment $21.1 $47.6
Mine Infrastructure and Mine Maintenance 5.4 13.0
Concentrator and SX/EW 8.5 23.5
Tailings and Water 2.7 41.3
Other Infrastructure 1.5 51.2
G&A and Engineering Studies 7.6 11.3
Subtotal $46.8 $187.9
PV2 PFS March 20141 - Summary of Capital Costs
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
US$
Mill
ion
s
Sustaining Capital Requirements G&A and Engineering Studies
Other Infrastructure
Tailings and Water
Concentrator and SX/EW
Mine Infrastructure and Mine Maintenance
Mine Equipment
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
4040
PV2 PFS March 20141 - Financial Analysis
Financial Analysis $M
Copper Revenue 4,656
Moly Revenue 210
Silver Revenue 52
Total Revenue 4,918
Site Costs -2,600
Conc. Transport, TC/RCs -716
Operating Cash Flow 1,602
Sustaining Capital Costs -188
Closure Costs -129
Net Cash Flow, Pre-Tax, Undiscounted 1,285
NPV (8%) Pre-Tax 931
Taxes Payable -274
Net Cash Flow, Post-Tax, Undiscounted 1,011
NPV (8%) Post-Tax 738
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
4141
PV2 PFS March 20141 - Financial Analysis
-300
-100
100
300
500
700
900
1,100
1,300
-40
-20
0
20
40
60
80
100
120
140
160
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26 C
um
ula
tive
Cas
h F
low
, US$
Mill
ion
s
Year
ly C
ash
Flo
w, U
S$ M
illio
ns
Post-Tax Cash-Flow
Post-Tax Cash Flow Cumulative Cash Flow
2015 has high capital expenditures (related to the pushback) and lower copper production (lower head grades)
Closure costs begin in 2026 and are projected until 2055
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
4242
PV2 PFS March 20141 - LOM Operating Cost Breakdown
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information. 2. Per tonne mine costs based on mined tonnage. 3. Per tonne mill and other costs based on milled tonnage. 4. SX/EW cost is $1.80/Cu cathode. Costs are calculated separately outside of the $/tonne milled. 5. Includes payable copper concentrate and copper cathode.
PV2 LOM$/tonne milled
PV2 LOM$/lb5
Mine2 3.48 0.53
Mill3 5.35 0.81
G&A 1.53 0.24
Total Site Costs 10.36 1.58
SX/EW 0.83 0.124
TC/RCs 1.52 0.23
Freight 1.56 0.24
By product credits (1.13) (0.17)
Total C1 Cash Costs 13.14 2.00
4343
PV2 PFS March 20141 - Sensitivities
VARIATIONAFTER TAX NPV AFTER TAX NPV
@ 0%($M)
@ 8.0%($M)
Copper Price
-20% 306 254
-10% 682 512
Base Case 1,011 738
10% 1,324 952
20% 1,620 1,155
Total Operating Costs
-20% 1,415 1,011
-10% 1,221 880
Base Case 1,011 738
10% 785 585
20% 537 418
1. Pinto Valley Mine 2014 Pre-Feasibility Study, April 2014. See Forward-Looking Statements and Cautionary Note for NI 43-101 information.
4444
Arizona Benchmark Data
OperationConcentrator Throughput Owner
G&A CostUS$M/year
G&A Cost $/t ore
Mining CostUS$/t moved
Milling CostUS$/t ore
Morenci 50ktpd FCX $172.00 $4.00 $1.76 $6.53
Sierrita 100ktpd FCX $149.73 $3.64 $2.04 $6.24
Mission 60ktpd ASARCO $67.33 $3.09 $1.52 $5.29
Bagdad 75ktpd FCX $57.28 $1.43 $1.95 $3.25
Ray 46ktpd ASARCO $50.69 $0.62 $2.19 $5.81
PV2 LOM PFS 52ktpd Capstone $29.00 $1.53 $2.18 $5.35
Safford SX/EW FCX $26.40 $1.24 $1.31 SX/EW
Miami SX/EW FCX $13.40 $1.00 $1.94 SX/EW
Silver Bell SX/EW ASARCO $10.80 $0.60 $1.55 SX/EW
Morenci 50ktpd FCX $172.00 $4.00 $1.76 $6.53
2015 Wood Mackenzie Estimates
4545
2014 Operating Results & 2015 Guidance
4646
Year-End Results and 2015 Guidance
2014 Actual 2015 Guidance
Tonnes milled (millions) 17.2 19.0
Copper grade (%)1 0.41 0.35
Copper recovery (%)1 88.9 88.1
Production (contained in concentrates)
Copper (tonnes) 62,716 56,300
Copper cathode (tonnes) 2,413 2,700
Total Copper (tonnes) 65,129 59,000
Molybdenum (tonnes) 113 480
Silver (million ounces) 285,877 300,000
C1 cash costs/lb payable Cu net of by-product credits and selling costs2
$2.03 $2.00 - $2.10
1. Grade and recoveries were estimated based on concentrate production. 2. This is an alternative performance measure.
4747
2014 Operating Cost Breakdown
1. Per tonne mine costs based on mined tonnage. 2. Per tonne mill and other costs based on milled tonnage. 3. Includes cathode production costs.
2014 Actual $/lb
Mine1 0.43
Mill2 0.86
G&A 0.34
Total Site Costs 1.633
TC/RCs and Freight 0.46
By product credits (0.06)
Total C1 Cash Costs 2.03
Primary focus remains on plant reliability and ongoing cost reduction activities.
4848
Future Potential
Future potential based on Mineral Resource ~1.6 billion tonnes averaging 0.30% Cu
Scoping studies completed in 2014
PV3 PFS now underway; two cases:
10-15% increase in throughput and possible mine life extension
Throughput to 90,000 tpdcombined with possible mine life extension
PV1
PV2
Future PotentialCurrent PV2 mine plan
represents only 16% of the total M&I Resource
4949
HSEC and Permitting
5050
Safety Program – Reportable Incidents
Pinto Valley Safety Performance - 2014
Safety is non-negotiable; it ensures the well-being of our people and our business.
27 Reportable Incidents in 2014
22 Restricted Duty & Medical Aid
5 Lost Time Injury
Total Reportable Incident Frequency Rate
PV 12-month rolling average is 3.74
Surface metal mining average is approximately 2.5
Objective to improve safety training, hazard identification and conduct quality incident investigations resulting in clear action items
Freq
uen
cy (
/20
0k
ho
urs
)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
5151
Environmental Program – Non-Reportable Incidents
2014 Environmental Targets
Provide environmental awareness training to all employees during Annual Refresher training
Increase the reporting for minor spills to create a non-reportable spill baseline
2014 Environmental Performance
38 Environmental Incidents
35 Non-Reportable
3 Reportable
Prior to Capstone ownership, Pinto Valley did not capture the number of minor or non-reportable spills. Using the data we collected in 2014 we are creating targets for the reduction of non-reportable spills in future years.
Pinto Valley Environmental Performance - 2014
0
1
2
3
4
5
6
7
8
9
10
0
50
100
150
200
250
# o
f re
po
rtab
le e
ven
ts
# of n
on
-repo
rtable even
ts
5252
Permit Function Status Expiration
Aquifer Protection
Permit (APP)
Authorizes operation of facilities that discharge ground water
Most recent update approved October 2013
Valid for the life of the mine (including (closure & post-closure)
Mined Land Reclamation Plan (MLRP)
Approved plan to enable productive post-mining land use
Initial MLRP approved in June 1998; update completed October 2013
Life of mine
AZPDES Discharge
Permit
Allows discharge of mine process water, mine drainage and stormwater from certain point source outfalls to surface waters
Approved March 2019 renewable with timely application submission
Air PermitAuthorizes emission of regulated pollutants
Approved May 8, 2017 renewable with timely application submission
Pinto Valley Environmental Permits
Local regulatory and community support demonstrated during prior operationsand no public comments received on restart or transfer of permits to Capstone.
5353
Permitting – Next Steps
Existing
Capstone proponent on Plan of Operations submitted by BHPB in September 2009
PV2
Optimized operational plan will require permit amendments, initial approach to regulators received positively
PV3
Scoping studies completed and PV3 PFS now underway - EIS will be submitted accordingly
Capstone’s PV2 optimized mine plan contemplates some modifications.
5454
Unless otherwise indicated, Capstone has prepared the technical information in this presentation (“Technical Information”) based on information contained in the
technical reports and news releases (collectively the “Disclosure Documents”) available under Capstone Mining Corp.’s company profile on SEDAR at www.sedar.com. Each
Disclosure Document was prepared by or under the supervision of a qualified person (a “Qualified Person”) as defined in National Instrument 43-101 – Standards of
Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI 43-101”). For readers to fully understand the information in this presentation, they should
read the Technical Reports (available on www.sedar.com) in their entirety, including all qualifications, assumptions and exclusions that relate to the information set out in
this presentation which qualifies the Technical Information. Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic
viability. The Disclosure Documents are each intended to be read as a whole, and sections should not be read or relied upon out of context. The Technical Information is
subject to the assumptions and qualifications contained in the Disclosure Documents.
The technical information in this presentation has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 Standards of
Disclosure for Mineral Projects of the Canadian Securities Administrators ("NI 43-101") and reviewed by Brad Skeeles, P.Eng. VP of North American Operations (Technical
Information related to mining and production) and Brad Mercer, P. Geol., Senior Vice President, Exploration (Technical Information related to mineral exploration
activities), and reviewed and approved by Gregg Bush, P. Eng., Senior Vice President and Chief Operating Officer for Capstone Mining, all "Qualified Persons" under NI 43-
101.
The PV2 PFS project was directed by Capstone with contributions from Kirkham Geosystems Ltd. (geology, Resource estimation), Independent Mining Consultants Inc.
(reserve, geotechnical, mine design and schedule, equipment selection), KWM Consulting Inc. (metallurgy, mill operation), AMEC Environment & Infrastructure Inc.
(tailings), Stantec (Infrastructure and PFS report compilation), SRK (US), Inc. (environmental), and Adam M Consulting Inc. (financial modelling). Personnel from each of
these companies will be signing off as a QP as defined in NI 43-101 for their specific responsibilities. The following QP’s will author the technical report: Mel Lawson, P.E. of
Stantec, Garth Kirkham, P.Geo. of Kirkham Geosystems Ltd., John Marek P.E. of Independent Mining Consultants, Inc., Ken Majors P.Eng. of KWM Consulting Inc, Tony
Freiman, P.E. of AMEC Inc., Adam Majorkiewicz, P.Eng of Adam M Consulting Inc. and Cori Hoag C.P.G. of SRK.
The March 2014 Mineral Resource estimate reported herein for the Pinto Valley property was prepared by Garth Kirkham, P. Geo, Kirkham Geosystems Ltd., an
independent QP. Based on the Mineral Resource Estimate, a standard methodology for pit limit analysis, mining sequence, and cut-off grade optimization, including
application of mining dilution, process recovery, economic criteria and physical mine and plant operating constraints, has been followed to design the Pinto Valley pit and
determine the Mineral Reserve Estimate.
Compliance with NI 43-101
55
For additional information, please visit capstonemining.com or contact us at:
Phone: +1-604-684-8894
Toll Free: 1-866-684-8894
Email: [email protected]
Last updated February 24, 2015