The new reserve is 14.1 million tonnes grading 1.77% copper and 44.4 grams per tonne silver. The indicated and inferred resources increased 10% to 29.7mt grading 1.52% copper and 44g/t silver.
The new reserve mine plan is projected to produce 512 million pounds of copper and 16.0 million ounces of silver over the next 10 years.
The updated life of mine plan features average annual copper production of 51.2 million pounds of copper and 1.6 million ounces of silver over 10 years at average C1 costs of US$1.02 per pound. From 2021 to 2027, average annual production is 58.8Mlb of copper and 1.7Moz of silver at an average C1 cost of 96c/lb. The plan maximises extraction of the orebody's high grade core by deferring stoping in this area until the paste backfill plant is in operation in 2023.
Capstone aims to ramp-up production to 3,780 tonnes per day by the end of the first quarter. Tailings management transformation activities are progressing on schedule, including feasibility level design and studies in support of permitting a filtered dry stack tailings storage facility.
A pre-feasibility study for an underground paste backfill system was completed in December 2020, which indicated a paste backfill system will allow ore extraction containing over 100Mlb of copper and 3.1Moz of silver between 2023 and 2031, which would have otherwise been left as unmined pillars. The PFS design has a capital cost estimate ranging from $41 million to $45 million. Capstone management has approved the paste backfill project and work has commenced on procurement of long lead items.
"After 14 years in operation, the best years of Cozamin are ahead," said Capstone Mining president and CEO Darren Pylot.
"The mine is world-class with sustainable low costs and leading safety and environmental performance entrenched throughout the organization. The growth initiatives are supported by an entrepreneurial fabric at Capstone, as we embrace innovation and technology to create high impact value for our shareholders."
Cozamin has a 2021 exploration budget of $5 million for 40,000m of surface drilling primarily targeting expansion drilling in the newly recognised West target area. Additional infill drilling to upgrade resources in the down-dip southeast area of Vein 20, and initial testing of new brownfield targets on adjacent vein systems will also be completed.
Capstone also plans to launch a study this year to assess alternative mining techniques with the objective of lowering costs and dilution to convert indicated resources to reserves. The current mining methods are longitudinal longhole open stoping and AVOCA. Alternatives that will be studied include cut-and-fill, drift-and-fill and longhole open stoping with ore sorting technology.
Shares in Capstone Mining are trading at C$2.55, valuing the company at $1 billion.
