Corporate Presentation April 2019
Cautionary Notes Cautionary Note on Forward Looking Information Compliance with NI 43-101 This presentation, and the documents incorporated by reference herein, may contain “forward-looking information” Unless otherwise indicated, Capstone has prepared the technical information in this presentation (“Technical within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the Information”) based on information contained in the technical reports and news releases (collectively the “Disclosure United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). These Documents”) available under Capstone Mining Corp.’s company profile on SEDAR at www.sedar.com. Each Disclosure forward-looking statements are made as of the date of this document and Capstone Mining Corp. (“Capstone” or the Document was prepared by or under the supervision of a qualified person (a “Qualified Person” or “QP”) as defined in “Company”) does not intend, and does not assume any obligation, to update these forward-looking statements, National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators except as required under applicable securities legislation. Forward-looking statements relate to future events or (“NI 43-101”). For readers to fully understand the information in this presentation, they should read the Technical future performance and reflect our expectations or beliefs regarding future events. Forward-looking statements Reports (available on www.sedar.com) in their entirety, including all qualifications, assumptions and exclusions that include, but are not limited to, statements with respect to the estimation of mineral resources and mineral reserves, relate to the information set out in this presentation which qualifies the Technical Information. Readers are advised the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of that mineral resources that are not mineral reserves do not have demonstrated economic viability. The Disclosure production and capital expenditures, the success of our mining operations, environmental risks, unanticipated Documents are each intended to be read as a whole, and sections should not be read or relied upon out of reclamation expenses and title disputes. In certain cases, forward-looking statements can be identified by the use of context. The Technical Information is subject to the assumptions and qualifications contained in the Disclosure words such as “plans”, “expects”, “guidance”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, Documents. “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 Alternative Performance Measures terminology. In this document certain forward-looking statements are identified by words such as “targeting”, “C1 cash cost”, “cash cost”, “adjusted EBITDA”, “operating cash flow before changes in working capital” and “net “guidance”, “potential”, “extended”, “convert”, “will”, “plan” and “expected”. By their very nature, forward-looking debt” are Alternative Performance Measures. Alternative performance measures are furnished to provide additional statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, information. These non-GAAP performance measures are included in this presentation because these statistics are performance or achievements to be materially different from any future results, performance or achievements key performance measures that management uses to monitor performance, to assess how the Company is expressed or implied by the forward-looking statements. Such factors include, amongst others, risks related to performing, to plan and to assess the overall effectiveness and efficiency of mining operations. These performance inherent hazards associated with mining operations and closure of mining projects, future prices of copper and other measures do not have a standard meaning within IFRS and, therefore, amounts presented may not be comparable to metals, compliance with financial covenants, surety bonding, our ability to raise capital, Capstone’s ability to acquire similar data presented by other mining companies. These performance measures should not be considered in properties for growth, counterparty risks associated with sales of our metals, foreign currency exchange rate isolation as a substitute for measures of performance in accordance with IFRS. For full information, please refer to the fluctuations, changes in general economic conditions, accuracy of mineral resource and mineral reserve estimates, Company’s latest Management Discussion and Analysis published on its Financial Reporting webpage or on SEDAR. operating in foreign jurisdictions with risk of changes to governmental regulation, compliance with governmental regulations, compliance with environmental laws and regulations, reliance on approvals, licences and permits from governmental authorities, impact of climatic conditions on our operations, aboriginal title claims and rights to Currency consultation and accommodation, land reclamation and mine closure obligations, uncertainties and risks related to All amounts are in US$ unless otherwise specified. the potential development of the Santo Domingo Project, increased operating and capital costs, challenges to title to our mineral properties, maintaining ongoing social license to operate, dependence on key management personnel, potential conflicts of interest involving our directors and officers, corruption and bribery, limitations inherent in our Footnotes insurance coverage, labour relations, increasing energy prices, competition in the mining industry, risks associated See Slide Notes for all footnotes throughout the presentation with joint venture partners, our ability to integrate new acquisitions into our operations, cybersecurity threats, legal proceedings, 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 MD&A 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 our actual results, performance or achievements to differ materially from those described in our forward-looking statements, there may be other factors that cause our results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that our forward-looking statements will prove to be accurate, as our actual results, performance or achievements could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on our forward-looking statements. CAPSTONE MINING (TSX:CS) • 2
Capstone Mining Low Risk Copper Producer • Focused on Execution • Delivering Value Pinto Valley Cozamin Santo Domingo Flagship mine in Arizona, USA Recession-proof mine in Mexico Path forward in Chile Continuous optimization; focused Low cost mine Strong economics 3 (after-tax): • • • on lowering costs NPV $1.0 billion, IRR 22%, Mine life extended to 2024, with • payback 2.8 years Long Reserve life 1 significant Resources to convert 2 • Launched strategic process to Potential upside of untapped Targeting 30% increase in • • • optimize ownership structure to Resources 1 production by end of 2020 2 align with financing capabilities CAPSTONE MINING (TSX:CS) • 3
Q1 2019 Results* Continuing to demonstrate quarter-on-quarter performance improvement 32.7 Mlbs $1.79 $108.9 M Pinto Valley Cu production Pinto Valley C1 cash cost 1 Revenue from per pound payable produced continuing operations 2 8.7 Mlbs $0.70 $41.8 M Cozamin Cu production Cozamin C1 cash cost 1 Adjusted EBITDA 1 per pound payable produced from continuing operations 41.4 Mlbs $1.56 $30.7 M Total copper production Consolidated C1 cash cost 1 Operating cash flow from continuing operations per pound payable produced before changes in working capital 1,2 *Refer to the Company’s Financial Statements and Management’s Discussion and Analysis for the three months ended March 31, 2019 for full details. CAPSTONE MINING (TSX:CS) • 4
Delivering Production Results Continuing to drive costs lower after achieving operational stability Capstone Mining 2018-2019 Quarterly Production and C1 Cash Cost 1 $1.95 $2.00 $1.85 $1.84 50 $1.70 $1.80 $1.56 $1.60 40 Cu Production (million pounds) 42.3 41.4 $1.40 41.0 C1 Cash Cost 1 ($US) 37.4 $1.20 34.6 30 $1.00 $0.80 20 $0.60 $0.40 10 $0.20 0 $0.00 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Pinto Valley Cozamin Total Consolidated Production C1 Cash Cost 1 CAPSTONE MINING (TSX:CS) • 5
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