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Capstone Mining Takes Action to Protect Covenant Compliance
Capstone Mining Takes Action to Protect Covenant Compliance Capstone Mining Takes ...
About this update from Capstone Copper Corp.
[{"type":"text","content":"\n\n\n\nCapstone Mining Takes Action to Protect Covenant Compliance\n\n/* Style Definitions */\nspan.prnews_span\n{\nfont-size:8pt;\nfont-family:\"Arial\";\ncolor:black;\n}\na.prnews_a\n{\ncolor:blue;\n}\nli.prnews_li\n{\nfont-size:8pt;\nfont-family:\"Arial\";\ncolor:black;\n}\np.prnews_p\n{\nfont-size:0.62em;\nfont-family:\"Arial\";\ncolor:black;\nmargin:0in;\n}\n\n\n\n\n\n\nCapstone Mining Takes Action to Protect Covenant Compliance\nCanada NewsWire\nVANCOUVER, March 9, 2016\n\n\n\nVANCOUVER, March 9, 2016 /CNW/ - Capstone Mining Corp. (\"Capstone\") (TSX: CS) today announced that it has taken steps to support covenant compliance on its Revolving Credit Facility (\"RCF\") throughout 2016 at copper prices as low as US$1.60 per pound in the first half of the year and US$1.70 per pound in the second half. \n\nActions taken include price fixing over 90% of the copper that had been sold in Q4 2015 with open copper pricing periods at December 31, 2015, at US$2.13 per pound of copper, eliminating the risk of a material negative pricing adjustment to Q1 2016 revenue; price fixing and hedging approximately 75% of Q1 2016 expected sales at US$2.20 per pound of copper; and hedging 90% of expected Q2 2016 sales at US$2.24 per pound of copper.\n\nThese actions, when combined with the January and February 2016 copper put options at US$2.60 per pound of copper, are expected to ensure compliance with the financial ratio tests under the RCF, provided consolidated production and costs meet guided levels. They are expected to eliminate the need to use any of the additional liquidity levers in 2016 that were outlined in the December 31, 2015 Management's Discussion and Analysis, including amending the RCF to obtain covenant relief, preserving the flexibility to use those levers beyond 2016 should metal markets continue lower.\n\n\"In this challenging commodity price environment our first priority is to reduce our debt risk,\" said Darren Pylot, Capstone President and CEO. \"The recent upward spike in the copper price allowed us to opportunistically lock in most of our revenue for the first half of the year to help ensure compliance with our debt covenants. Beyond the first half of 2016, when production from our high grade Minto North pit is expected to contribute significant EBITDA, we remain open to copper price changes.\"\n\nAbout Capstone...