Capstone rises on Cozamin exploration success

Base metals miner Capstone Mining Corp has added or converted 115,000 tonnes of copper into the compliant indicated mineral resource category in the Mala Noche Footwall Zone (MNFWZ) of the Cozamin mine, in Zacatecas, Mexico.

Henry Lazenby in Vancouver
Capstone rises on Cozamin exploration success

As a result, the Vancouver-headquartered miner doubled Cozamin's total measured and indicated resources to 217,000t of red metal, compared with the previous resource announced at the end of December.

The resource update stokes optimism that the increasing copper resource could support a mine expansion, according to company president and CEO Darren Pylot.

The news sent Capstone's TSX-quoted equity (CS) up nearly 14% to an intra-day high of C$1.24 a share.

"We remain optimistic about the extension of operations at Cozamin well into the future. The increasing copper resource creates the potential for a mine expansion and utilisation of surplus mill capacity that is currently being partially filled using ore from the San Rafael zinc zone," Pylot said.

Capstone said the latest resource update incorporated all drilling results up to March 19. The company used a $43 net smelter return cut-off formula to calculate the new measured and indicated resources for Cozamin, including adjustments for mining depletion to March 31.

The current mineral reserves at the MNFWZ are mainly located in two sub-domains called Vein 10 and Vein 20 that are actively being mined. These two veins, of the five MNFWZ veins, are best suited to the current mining method and are the target of the upcoming reserve evaluation. Capstone will evaluate the potential of the remaining three veins in the future by looking at possible changes in the mining method and the possibility of introducing ore sorting technology underground.

Resource drilling on the MNFWZ is ongoing and is split between infill drilling from underground and from surface using three rigs, and step‐out drilling from surface to extend the resource along strike to the southeast using two rigs. Subsequent to the resource cut-off rate, Capstone has completed drilling a further 31 holes in the MNFWZ, which remains open up-dip and to the south-east, where the company is continuing 40,000m of step-out and infill drilling this year on the inferred resource, as part of its $7 million 2018 exploration programme. Further drilling is planned for 2019.

Cozamin accounted for 29.2% of Capstone's first-quarter revenue, with Arizona-based Pinto Valley making up the balance. Cozamin is forecast to produce 15,000t of copper in 2018.


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