Capstone Copper clears Mantoverde hurdle as EBITDA hits another record

Record earnings meet weaker production outlook

Capstone Copper Corp. (ASX:CSC) set another earnings record in the third quarter, but the operating picture was less tidy. Adjusted EBITDA reached US$358.3 million, up from US$249.2 million a year earlier and marking the eighth straight quarterly record, while revenue rose 19% to US$712.0 million on a realised copper price of US$6.61 per pound.

That price strength did much of the heavy lifting. Copper production fell 18% year-on-year to 45,218 tonnes, while consolidated C1 cash costs rose 22% to US$2.95 per pound. Capstone now expects full-year production of 200,000 to 230,000 tonnes to finish at the low end of that range, with costs of US$2.45 to US$2.75 per payable pound landing at the high end.

The underlying earnings comparison was stronger than statutory net income suggests. Net income attributable to shareholders fell to US$98.5 million from US$248.1 million, but last year’s result included a US$209.5 million non-cash impairment reversal. Adjusted net income instead rose to US$93.8 million from US$49.4 million.

Debt falls as cash generation accelerates

Capstone generated US$329.1 million in operating cash flow before working-capital movements and US$63.7 million in free cash flow from operations during the quarter. Year-to-date free cash flow from operations reached US$279.1 million, helping cut net debt to US$564.0 million at September 30 from US$780.1 million at the end of 2025.

The balance-sheet improvement gives the company more room to pursue its growth agenda, although it is arriving alongside heavier investment. Total 2026 capital expenditure guidance has increased by US$40 million to US$830 million, largely because of higher capitalised stripping at Mantoverde and elevated diesel prices. Total available liquidity stood at US$1.09 billion, including US$263.4 million of cash and US$826.0 million undrawn on its revolving facility.

Mantoverde tie-in clears the next operational hurdle

The critical sulphide concentrator tie-in for Mantoverde Optimized was completed during a planned September shutdown. The project is designed to lift concentrator throughput from 32,000 to 45,000 ore tonnes per day, adding approximately 20,000 tonnes of annual copper production and extending the mine life from 19 to 25 years. Capstone said individual daily throughput reached a record 53,412 tonnes in October, with sustained 45,000-tonne-per-day rates expected from early 2027.

That milestone follows the company’s earlier push to expand the Mantoverde district, including the San Pietro acquisition, which added 16,000 hectares of underexplored ground for US$25 million in Capstone shares. The near-term test is whether the concentrator can convert peak throughput into consistent production without recreating the disruption seen during the tie-in period.

Pinto Valley disruption weighs on the quarter

Pinto Valley was the clearest drag on the operating result. Production fell 36% to 6,358 tonnes after 45 days of planned and unplanned downtime, including concentrator reliability problems and a major shutdown for filter plant upgrades and a primary crusher rebuild. C1 cash costs rose 68% to US$6.11 per pound.

The plant restarted with mobile crushers on October 1 at roughly one-third availability, but further repairs were identified during primary crusher commissioning. Capstone expects those repairs to finish by November 2, after which operations are expected to restart. Weather in Arizona also affected the timing of the maintenance work, adding another variable to the fourth-quarter recovery.

Portfolio reshaping continues ahead of 2027 decisions

Capstone is also preparing to exit Cozamin in Mexico through a proposed sale to Luca Mining for up to US$385 million, including US$275 million in cash at closing, US$15 million in Luca shares, US$35 million of deferred consideration and up to US$60 million linked to future copper prices. The transaction is expected to close in the fourth quarter, subject to customary conditions and regulatory approvals, after the Cozamin sale agreement was announced earlier in the quarter.

The proceeds are intended to strengthen financial flexibility while Capstone advances the Mantoverde Pyrite Augmentation project and works towards a final investment decision on Santo Domingo, expected in the first quarter of 2027. Pyrite Augmentation is expected to cost about US$45 million, reduce Mantoverde’s sulphuric acid requirements by roughly 20% and add around 3,500 tonnes of annual cathode copper, based on the company’s current assumptions.

For now, the investment case is pulling in two directions: copper prices and debt reduction are improving the financial engine, while lower production, higher costs and the Pinto Valley restart expose the operational risk. The next quarter should show whether Mantoverde’s new capacity can begin to outweigh those pressures.