Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 18 Jul, 25 | CS | Speculative Buy | CAD 7.79 | CAD 8.22 | CAD 8.41 | 5 days | Closed |
9.37%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Capstone Copper Corp., a copper mining company, mines, explores for, and develops mineral properties in the United States, Chile, and Mexico. The company explores for copper, silver, gold, molybdenum, zinc, iron, cobalt, and other base metals. Capstone Copper Corp. is headquartered in Vancouver, Canada.
Significant Increase in Copper Production: Consolidated copper production rose 28% year-over-year, reaching 53,796 tonnes in Q1 2025, up from 42,121 tonnes in Q1 2024
Record EBITDA Growth: Adjusted EBITDA more than doubled to $179.9 million in Q1 2025 from $80.1 million in Q1 2024, driven by higher sulphide production and favorable copper pricing
Sharp Decline in Cathode Production and Rising Costs: Cathode output dropped 30% to 7,846 tonnes, with C1 cash costs increasing from $3.76/lb to $4.64/lb, primarily due to lower oxide grades and elevated acid prices
Continued Net Loss Despite Operational Gains: Net loss attributable to shareholders widened to $6.8 million in Q1 2025, compared to $4.8 million in the prior year quarter
Capstone’s investment outlook is vulnerable to operational disruptions, fluctuating input costs, and commodity price volatility, particularly in the high-cost cathode segment and asset-specific underperformance such as seen at Pinto Valley
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 7.79 | 7.2 | 8.22 | 8.41 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Strong Operational Start to 2025 with Record Sulphide Production: Capstone Copper commenced 2025 on a strong note, achieving record sulphide copper production from both the Mantoverde and Mantos Blancos operations. The consolidated sulphide output for Q1 2025 reached 45,950 tonnes, marking a 49% increase year-over-year, largely driven by the ramp-up of Mantoverde’s new concentrator. Total consolidated copper production rose by 28% to 53,796 tonnes, supported by operational momentum across key assets.
Improved Profitability Metrics and Cash Flow Generation: Despite reporting a net loss attributable to shareholders of USD 6.8 million, the company posted an adjusted net income of USD 8.1 million, reversing a prior-year adjusted loss. Capstone more than doubled its adjusted EBITDA to a record USD 179.9 million in Q1 2025, up from USD 80.1 million in Q1 2024, reflecting both stronger copper prices (USD 4.36/lb vs USD 3.85/lb) and enhanced production volumes. Operating cash flow before working capital changes surged to USD 166.1 million, significantly higher than the USD 62.1 million recorded a year earlier.
Reduction in Cash Costs Across Sulphide Operations: Operational efficiency gains were evident in the reduced C1 cash costs across sulphide assets. Consolidated sulphide C1 cash costs declined 13% year-over-year to USD 2.23/lb. This improvement was primarily attributed to low-cost production from Mantoverde’s sulphides at USD 1.53/lb and cost reductions at Mantos Blancos and Cozamin. However, Pinto Valley saw elevated costs at USD 3.84/lb due to lower ore grades and recoveries.
Weakness in Cathode Segment and Ongoing Challenges: Contrasting the strong performance in sulphides, the cathode business underperformed. Cathode production dropped 30% year-over-year to 7,846 tonnes due to reduced output at Mantoverde amid lower oxide grades and a nationwide power outage. C1 cash costs in this segment rose sharply to USD 4.64/lb from USD 3.76/lb, driven by lower volumes and increased acid prices. The company noted it will continue to evaluate cathode operations to ensure marginal profitability under current market conditions.
Strategic Capital Management and Liquidity Position: Capstone completed an upsized USD 600 million senior unsecured notes offering, aiming to repay project-related debt and strengthen its financial structure. Net debt increased modestly to USD 788.1 million as of March 31, 2025, from USD 742.0 million at year-end, influenced by a working capital draw and specific non-recurring payments. The company's liquidity remains robust at USD 1,044.5 million, comprising USD 344.5 million in cash and short-term investments and USD 700 million in undrawn credit.
Asset-Specific Operational Highlights: The Mantoverde mine delivered strong performance, producing 22,540 tonnes of copper (including 16,268 tonnes of sulphides), marking a 138% year-over-year increase. Meanwhile, Mantos Blancos posted a 26% production increase, with sustained high mill throughput. Cozamin delivered a 9% production increase with a 34% reduction in C1 cash costs. In contrast, Pinto Valley saw a 31% production decline due to lower grades and recoveries, leading to a significant cost increase.
Maintaining 2025 Guidance and Market Recognition: Capstone reaffirmed its 2025 production guidance of 220,000–255,000 tonnes of copper at C1 cash costs of USD 2.20–USD 2.50/lb. The company also maintained its capital expenditure guidance, including USD 315 million for sustaining and expansionary activities, USD 210 million for capitalized stripping, and USD 25 million for exploration. In a nod to its market standing, Capstone's CDI was added to the S&P/ASX 200 Index effective March 24, 2025.
Technical Commentary:
CS's stock price is presently trading near important support levels and could see an upward movement in the short term. The 14-period RSI is approaching its midpoint and shows signs of moving higher. Overall, these technical indicators suggest that the stock has the potential for additional gains, provided it sustains support above these key zones.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Speculative Buy’ recommendation has been given on Capstone Copper Corp (TSX: CS) at the closing market price of USD 7.79, as on July 17, 2025
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Copper
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| CS Capstone Mining Corp |
-0.065 0.83% | 7.75 | 52.47 | 27.03 | 3.35 | 1.41 | 3.02 | 9.41 |
| FM First Quantum Minerals Ltd |
-0.07 0.30% | 23.39 | 90.20 | 109.89 | 3.80 | 1.21 | 3.93 | 10.93 |
| LUN Lundin Mining Corporation |
- -% | 13.90 | 86.56 | 21.10 | 3.32 | 1.63 | 2.91 | 8.62 |
| HBM HudBay Minerals Inc |
-0.295 2.17% | 13.29 | 24.80 | 14.41 | 2.53 | 1.44 | 2.12 | 5.04 |
| ERO Ero Copper Corp |
-0.3 1.59% | 18.58 | 87.68 | 7.17 | 4.64 | 2.29 | 4.54 | 19.60 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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