Dec 17 (Reuters) - Capstone Mining Corp (CS.TO) forecast higher copper production in 2011, a majority of which is expected to come from its Cozamin mine in Mexico, where a fatal accident earlier this year temporarily stalled production.
However, the company forecast a higher average cash cost of $1.30-$1.35 per pound in 2011 due to lower overall grades expected from the Minto mine. For 2010 it sees average cash cost of $1.20-$1.25 per pound.
The company said the 2011 capital expenditure, excluding exploration, at the two mines is estimated at $23.7 million, of which it plans to spend $17.1 million at the Minto mine. The copper producer said it expects to produce 80-85 million pounds of copper in 2011, compared with an estimated 2010 production of 78-80 million pounds.
The company, which has faced problems at both mines this year due to natural disaster or accident, said it sees 52 percent of copper coming from the Cozamin mine next year.
In November-end, Capstone Mining suspended operations for nearly two weeks at the Cozamin mine following the death of a miner in an accident.
In June, it suspended mining and milling operations at its Minto mine for about a week due to a wildfire, and workforce was reduced to maintenance crew only. [ID:nSGE6560FS]
"Minto and Cozamin mines having experienced production challenges....2011 will be a year of optimizing the current operations by stressing efficiencies in operations and costs," the company said in a statement.
Shares of the Vancouver-based company, which have gained nearly 4 percent since it started operations at the Cozamin mine, closed at C$4.52 on Thursday on the Toronto Stock Exchange.