Capstone Copper Corp (ASX: CSC) shares drifted slightly higher on record earnings results for the first quarter, but the company warned that diesel price increases going forward could be costly.
Image source: Getty Images
A string of good results
The Canada-based mining company said in a statement to the ASX on Thursday that it had recorded its sixth consecutive quarter of record EBITDA generation, "driven by solid operations and all-time high copper prices''.
The company's total consolidated copper production came in at 47,690 tonnes, at a cost of US$2.66 per pound, compared with 53,796 tonnes at a cost of US$2.59 per pound in the first quarter last year.
The period this year included a 35-day strike at the company's Mantoverde mine.
Net income for the quarter came in at US$102.5 million compared with a net loss of US$6.8 million for the same period last year.
Adjusted EBITDA was a record US$329.1 million, up from US$179.9 million.
Capstone also reiterated its 2026 production guidance of 200,000 to 230,000 tonnes of copper at a cost of US$2.45 to US$2.75 per pound.
The company noted that the war in the Middle East could present cost issues.
As they said:
We continue to monitor and manage the impacts stemming from the conflict in the Middle East. To date we have not experienced any inventory or operational impacts, however cost pressures, notably from higher diesel and sulphuric acid prices, represent a headwind.
Capstone said average copper prices were 16% higher in the first quarter, despite the issues in the Middle East.
But in the company's 2026 outlook, they explained the exact impact of higher diesel prices.
We expect to consume approximately 134 million litres of diesel over the remainder of 2026 (75% in Chile, 24% in the USA, and 1% in Mexico) and our guidance assumed US$60/bbl oil. From April, every 10% change in oil prices (including refining margins) is estimated to impact direct costs by approximately US$13 million, split between US$9 million (or $0.02 per payable pound) impact to our consolidated C1 cash costs and US$4 million impact to capitalised stripping.
The company said 55% of its sulphuric acid costs were locked in for the remainder of the year, while 45% were variable.
The company said:
From April, every 10% change in sulphuric acid prices is estimated to impact consolidated C1 cash costs by approximately $5 million (or $0.01 per payable pound).
Shares looking cheap
Morgans recently issued a research note on Capstone Copper, with a price target of $15.40, up 0.7% on Thursday from the current price of $11.51.
