Capstone Copper Posts Record Q2 EBITDA and Advances Key Growth Projects

Financial Milestones Amid Rising Copper Prices

Capstone Copper Corp (ASX:CSC, TSX: CS) smashed its own records in Q2 2026, posting an adjusted EBITDA of $354 million; a 64% leap from the previous year and marking the seventh straight quarter of record earnings. This surge was fuelled by a robust copper price averaging $6.22 per pound, up sharply from $4.39 in Q2 2025, alongside strong operational performances, particularly at the Mantoverde mine.

Revenue soared 36% year-over-year to $739.7 million, while net income attributable to shareholders climbed to $74.3 million, or 10 cents per share. Adjusted net income, which excludes union bonuses and other nonrecurring items, reached $97.6 million, quadrupling the prior year’s figure. Operating cash flow before working capital changes rose to $259.7 million, underpinning a significant reduction in net debt to $674.9 million from $780.1 million at the end of 2025.

Operational Strength Driven by Mantoverde Sulphides

Consolidated copper production slipped 10% to 51,759 tonnes, weighed down by lower output at Mantos Blancos and reduced cathode volumes at Mantoverde. However, Mantoverde’s sulphide business delivered a standout performance, setting a record with 18,190 tonnes of copper produced; a 13% increase in mill throughput above design capacity and recoveries improving to 90.2%. This was despite a dip in sulphide grades due to pit water levels limiting ore access.

The company’s focus on sulphide production at Mantoverde, which benefits from lower costs and stronger by-product credits, helped reduce combined C1 cash costs there to a record $1.97 per pound, down 16% from a year earlier. This contrasted with rising cash costs at other sites, notably Mantos Blancos where costs nearly doubled to $3.93/lb due to lower grades, increased maintenance, and higher diesel and acid prices.

Growth Pipeline and Project Advances

Capstone reaffirmed its 2026 production guidance of 200,000 to 230,000 tonnes of copper and C1 cash costs between $2.45 and $2.75 per pound, expecting stronger second-half throughput at Mantoverde following completion of the MV Optimized brownfield expansion. This $176 million project, sanctioned last year, aims to lift sulphide concentrator capacity from 32,000 to 45,000 tonnes per day, adding about 20,000 tonnes of copper annually.

July saw board approval of the $45 million Mantoverde Pyrite Augmentation project, designed to cut sulphuric acid consumption by 20% and boost cathode copper output by 3,500 tonnes annually. With an after-tax net present value estimated at $350 million at current spot prices, the project also lays groundwork for future cobalt by-product recovery, a potential new revenue stream currently in feasibility.

Meanwhile, Capstone advanced its transformative Santo Domingo project, with detailed engineering nearing 60% completion and a final investment decision expected in Q4 2026. Exploration drilling there is halfway through a 54,700-metre program targeting oxide mineralization and sulphide extensions, supported by a strategic joint venture with Orion Resource Partners that provides up to $360 million in staged funding.

Labour Stability and Cost Management Amid Input Pressures

Operational stability was bolstered by new three-year labour agreements at Mantos Blancos and Mantoverde, resolving prior disruptions and underpinning steady production. Capstone also implemented hedging strategies to mitigate diesel and sulphuric acid price volatility, locking in 42% of diesel consumption for H2 2026 and securing fixed-price contracts covering 80% of acid needs.

Despite these measures, consolidated C1 cash costs rose 15% to $2.82/lb, pressured by lower production volumes and higher input costs, notably diesel and acid. The company’s cash flow optimisation strategy at Mantoverde, including reduced heap leaching of high-calcium carbonate ore, helped limit acid consumption and spot price exposure.

Exploration and Future Growth Opportunities

Exploration remains a priority, with nearly 60,000 metres drilled at Mantoverde as part of a $25 million program focused on resource expansion and district-scale targets. At the adjacent Sierra Norte deposit, a 19,200-metre drill campaign is slated to commence, aiming to delineate cobalt-bearing resources and support future processing plans.

Capstone is also progressing pre-feasibility studies for expansions at Mantos Blancos and the Pinto Valley district, with potential to increase concentrator throughput and cathode production. These initiatives, alongside Mantoverde Phase II evaluations and district consolidation efforts, underscore a capital-efficient growth strategy leveraging existing infrastructure and mineral resources.