Capstone Could Go Underground At Minto

Capstone Mining’s (CS-T) latest prefeasibility study on the Minto copper-gold mine in the Yukon looks at increasing production to 4,100 tonnes per day from 3,200 tonnes per day.

Production at the high-grade open-pit mine will average 45 million lbs. of copper per year over an eight-year mine life, starting in January 2010.

The latest study goes beyond that, looking at two possible options to increase production or increase the mine life and mineral reserves.

To increase production, Capstone is considering increasing mill capacity to 7,500 tonnes per day and would focus on mining resources from outside the current proposed open pit limits.

The other option under consideration is developing a 1,000- 2,000 tonne-per-day under-g round mine to provide higher-grade feed relatively earlier in the mine life than an expanded open-pit operation.

So far, the underground option is proving more attractive from an investment perspective, the company says, and it plans to make that option a priority this year.

The new net present value of the project is estimated at $199 million before tax and $166 million aftertax, using a 7% discount rate and a copper price of US$2.25 per lb.

Reserves have been increased more than 30% to 10.9 million tonnes grading 1.64% copper, 0.64 gram gold per tonne and 5.9 grams silver, containing 395 million lbs. copper, 224,000 oz. gold and 2 million oz. silver.

The mine, located 240 km north of Whitehorse, was brought into production in 2007. The company has made five new high grade copper- gold discoveries on the property since it acquired it in 2005.

Over the last two years, the company has drilled 38,000 metres to incorporate its discovery into the reserves and resources.

Capstone also operates the Cozamin mine in Zacatecas, Mexico, and the advanced-stage copper- zinc-gold-silver Kutcho project, 330 km north of Smithers, B.C.

Capstone shares were trading at $3.05 apiece in Toronto in early January. The stock has a 52-week trading range between $1.03 and $3.30, and 196.5 million shares outstanding.