Capstone Copper Responds to Media Reports Pertaining to Mantoverde Operation

On January 22, 2026, Capstone Copper announced a significant escalation in the ongoing labor dispute with Union #2 at its flagship Mantoverde operation in Chile. The company reported that on January 18, individuals forcibly entered the desalination plant—located 40 km from the mine site—sabotaged the electrical system, and cut off the water supply. Consequently, Mantoverde Sulphide operations have been temporarily halted. Oxide operations are running on water reserves but are projected to halt by January 23 (tomorrow) if the supply is not restored. The company is seeking judicial intervention to regain access to the facility, which remains blocked by striking union members. This follows a January 15 release where the company celebrated record 2025 production and a January 1 update regarding the initial strike notice.

This development is Material - Negative. While the company recently announced record fiscal year 2025 production (224,764 tonnes) and a strategic JV with Orion, the immediate operational reality faces a severe shock. * Escalation of Conflict: This has moved beyond a standard labor stoppage (picketing) to active sabotage of critical infrastructure (desalination plant). This suggests a toxic relationship with Union #2 (representing ~50% of employees) that may be difficult and costly to resolve quickly. * Operational Paralysis: Water is the lifeblood of Chilean mining. Without the desalination plant, the mine cannot function. The halt of Sulphide operations puts the primary growth engine of the company offline. The imminent halt of Oxide operations means the entire site will cease revenue generation. * Financial Strain: Capstone is in a deleveraging phase, relying on Mantoverde's cash flow to pay down significant debt (~$1B gross debt). A prolonged stoppage burns cash on fixed costs while delaying revenue, potentially impacting debt covenants or repayment timelines if extended. * Repair Costs: The extent of the damage to the electrical system at the desalination plant is currently unknown. Repairs could take weeks or months depending on the severity of the sabotage and the lead time for electrical components.

• Company: Capstone Copper is a premier copper producer with operations in the Americas (Chile, USA, Mexico).
• Flagship Project: Mantoverde (Chile). This is an open-pit mine in the Atacama region. It recently completed the Mantoverde Development Project (MVDP), adding a sulphide concentrator to process sulphide reserves, significantly extending mine life and production.
• Expansion: The company is advancing the "Mantoverde Optimized" project to increase throughput to 45,000 tpd.
• Other Assets:
  • Mantos Blancos (Chile): Producing sulphide/cathode.
  • Pinto Valley (USA): Large open pit, recently plagued by water issues (resolved late 2025).
  • Cozamin (Mexico): High-grade underground mine, low cost.
  • Santo Domingo (Chile): Large shovel-ready development project, 35km from Mantoverde.