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Capstone mulling potential buys

Keywords: Tags  Capstone Mining, Darren Pylot, copper, copper production, earnings results, Suzy Waite

NEW YORK — Capstone Mining Corp. is mulling potential acquisitions, president and chief executive officer Darren Pylot said as the copper producer’s earnings held mostly steady in 2012.

"The ability to deploy our balance sheet on opportunistic acquisitions provides Capstone with the flexibility to grow our short-term production profile and advance the company to the next level," he said in a statement.

The Vancouver, British Columbia-based company will consider companies with production of 50 million to 125 million pounds, with a cost ranging from $100 million to $600 million, Pylot told analysts during an earnings call.

With $500 million in cash plus a $200-million credit facility, Capstone could make an acquisition in this range without adding significant leverage, he added.

Capstone reported full-year 2012 net income of $59.6 million, down 1.4 percent from $60.4 million a year earlier, on revenue that fell 6.8 percent to $305.5 million from $327.8 million.

However, copper concentrate production rose to 82.8 million pounds for the year from 78.3 million pounds in 2011.

Meanwhile, fourth-quarter net income nearly quadrupled to $18.5 million from $4.9 million in the same three month span a year earlier on revenue that increased 17.9 percent to $72.5 million from $61.5 million.

Copper concentrate production dipped to 19.7 million pounds from 19.8 million pounds in the same comparison.

"We had another solid year in 2012," Pylot said in a statement. "Our revenue, earnings and cash flow remained strong, and we exceeded production and cost guidance for the year. Both operating mines are well-positioned to deliver on their targets in 2013."

In addition to pushing ahead with development projects in Kutcho, British Columbia, and Santa Domingo, Chile, the company has begun initial drilling campaigns at greenfield projects in Chile and Mexico.

"We plan to advance our development projects in 2013 by formally entering the permitting process at Kutcho and completing key milestones at Santo Domingo, including submitting the environmental impact study and completing the feasibility study," Pylot said. "We will also continue activities on our greenfield exploration portfolio, with initial drilling campaigns at projects in Chile and Mexico."

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