Capstone Copper Corp (ASX: CSC) shares are having a poor session on Wednesday.
At the time of writing, the ASX 200 copper stock is down 19% to $12.72.
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Why is this ASX 200 copper stock crashing?
The heavy selling this morning follows the release of the copper miner's 2026 production and cost guidance, which appears to have disappointed investors.
Capstone Copper announced that it expects consolidated copper production of between 200,000 and 230,000 tonnes in 2026. While this is broadly in line with 2025 levels, it signals largely flat output rather than the stronger growth some investors may have been hoping for.
More concerning for the market is cost guidance. The ASX 200 copper stock expects consolidated C1 cash costs of US$2.45 to US$2.75 per payable pound of copper in 2026. Management said costs are expected to increase compared to 2025, primarily due to modest inflation and lower-grade ore at Mantos Blancos and Pinto Valley driven by mine sequencing.
Lower grades generally mean more material needs to be processed to produce the same amount of copper, which can weigh on margins.
Big capital spend
Another factor that may be unsettling investors is the scale of planned capital expenditure.
Capstone Copper is forecasting total capital expenditure of US$495 million in 2026. This includes US$270 million in sustaining capital and US$225 million in expansionary capital, largely related to the Mantoverde Optimized Project and the Santo Domingo Project.
On top of this, the company expects to spend a further US$225 million on capitalised stripping at its open-pit operations and US$70 million on exploration activities.
While these investments are aimed at driving future growth, they represent significant cash outflows in the near term.
Production outlook
At Mantoverde, production is expected to remain broadly stable in 2026, though throughput improvements are set to be offset by the impact of a January strike and planned maintenance. The ramp-up of the Mantoverde Optimized project is expected in the fourth quarter of 2026, with higher production levels targeted in 2027.
Over at Mantos Blancos, it is forecast to see lower production in 2026 due to a one-year period of lower copper grades, though grades are expected to recover in 2027.
Finally, Pinto Valley production is expected to increase slightly, but grades will be marginally lower. Cozamin is forecast to see slightly lower production due to lower grades and higher labour costs.
Commenting on the update, the ASX 200 copper stock's CEO, Cashel Meagher, said:
2025 was a remarkable year for Capstone, delivering record copper production up 22% year-over-year, while executing on several key catalysts. We will continue to build on this success in 2026, with a focus on delivering consistent and reliable outcomes, while we execute on MV-O which is expected to drive higher copper production levels in 2027. Meanwhile, we will progress the fully-permitted Santo Domingo Project towards a sanctioning decision, which is expected in the second half of 2026.
Building on the first phase of the exploration program commenced in late 2024, we will continue to advance our district growth strategy through targeted exploration focused on the Mantoverde-Santo Domingo district. In parallel, we will continue to capitalize on strong commodity prices by deleveraging through internally generated cash flows, ensuring we are well-positioned to advance our growth strategy.
