Capstone Copper Bets Big on Growth Amid Rising Costs and Flat Output

VANCOUVER, BC – February 17, 2026 – Capstone Copper Corp. finds itself at a critical juncture, navigating a complex balancing act between ambitious long-term growth and pressing short-term realities. The company's detailed 2026 guidance, released today, paints a picture of a miner investing heavily in a copper-hungry future, but the immediate market reaction was sharp and unforgiving, as investors grappled with forecasts of flat production and rising costs.

Shares of the Vancouver-based miner plunged as much as 19% on the Australian Securities Exchange and saw a notable decline on the Toronto Stock Exchange following the announcement. The guidance projects consolidated copper production between 200,000 and 230,000 tonnes for 2026, a range largely in line with the record output achieved in 2025. While stability after a year of 22% production growth might seem reasonable, it fell short of the market's appetite for continued expansion.

More concerning for investors were the projected C1 cash costs, which are expected to climb to between $2.45 and $2.75 per payable pound of copper. This marks a significant increase from 2025's forecasted range and is attributed by the company to a combination of modest inflation and a challenging period of mining lower-grade ore zones at its Mantos Blancos and Pinto Valley operations.

“2025 was a remarkable year for Capstone, delivering record copper production up 22% year-over-year, while executing on several key catalysts,” commented Cashel Meagher, President and CEO of Capstone, in the official release. “We will continue to build on this success in 2026, with a focus on delivering consistent and reliable outcomes, while we execute on MV-O which is expected to drive higher copper production levels in 2027.”

A Colossal Bet on Tomorrow's Copper

While the 2026 production and cost figures triggered a sell-off, the heart of Capstone's strategy lies in its colossal capital expenditure plan. The company has earmarked a staggering $495 million for total capital expenditures, supplemented by an additional $225 million for capitalized stripping and $70 million for exploration. This represents a monumental increase from prior years and signals an aggressive pivot towards future-proofing the company's production profile.

The spending is heavily concentrated on two key growth projects in Chile. The first is the Mantoverde Optimized Project (MV-O), a brownfield expansion set to receive $150 million in 2026. This project aims to boost the sulphide concentrator's throughput by 40% to 45,000 tonnes per day. Construction is underway, with the critical ramp-up scheduled for the fourth quarter of 2026. Success here is crucial, as it's expected to add approximately 20,000 tonnes of copper annually starting in 2027.

The second, and far larger, prize is the Santo Domingo project. Capstone is allocating $60 million in 2026 to advance this fully permitted, world-class copper-iron-gold project toward a final sanctioning decision in the second half of the year. With an initial capital cost estimated in the billions, Santo Domingo has the potential to eventually double Capstone's entire copper output, creating a major mining district through synergies with its nearby Mantoverde operation. This massive investment is a clear bet on sustained high copper prices, driven by the global energy transition, electrification, and the explosive growth of AI and data centers, which have created a new, voracious source of copper demand.

Managing Risk in a Volatile Market

To navigate the financial pressures of its ambitious plans amid market volatility, Capstone has deployed a series of risk mitigation strategies. The company revealed it has entered into zero-cost copper collars for a portion of its 2026 production, locking in a price floor of $4.31 per pound and a ceiling of $6.37 per pound. This hedging is specifically designed to protect the profitability of its higher-cost copper cathode operations, ensuring a baseline level of cash flow as it funnels capital into its growth pipeline.

Furthermore, a significant portion of its capital is dedicated to environmental, social, and governance (ESG) initiatives. The 2026 guidance allocates $90 million for tailings and ESG-related projects. This includes substantial upgrades to tailings storage facilities at the Pinto Valley mine in Arizona and the Mantos Blancos mine in Chile. This spending reflects a proactive approach to addressing one of the industry's most significant risks and aligns with a broader push towards meeting international standards, such as the Global Industry Standard for Tailings Management. The company's Mantoverde site has already earned The Copper Mark, a key independent verification of responsible production practices, underscoring its commitment to this front.

A Look Under the Hood: Mine-Specific Challenges

The consolidated guidance masks a complex set of operational dynamics at each of Capstone's mines. The 2026 plan is a mosaic of site-specific challenges and opportunities that will ultimately determine if the company can hit its targets.

At Mantoverde, production is forecast to remain stable, but the year will be eventful. The operation must navigate the lingering impacts of a January strike and a prolonged maintenance period in the third quarter required for the construction tie-in of the MV-O expansion. The successful ramp-up of the expanded concentrator in the final quarter is the single most important catalyst for the site.

In contrast, Mantos Blancos is expecting a tougher year. Production is forecast to decrease due to a planned sequence of mining lower-grade ore. This dip in grade, combined with reduced capitalized stripping, is the primary driver behind the site's higher C1 cash costs. The company is guiding for a rebound in 2027, when the mine sequence is expected to access higher-grade zones.

Across the Americas, the Pinto Valley mine in Arizona is projected to see an increase in production, driven by higher mill throughput. This is partially offset by slightly lower copper grades. A key 10-day maintenance shutdown is planned to implement improvements, particularly to the primary crusher, aimed at enhancing long-term plant reliability.

Finally, the Cozamin mine in Mexico is expected to deliver slightly lower production compared to 2025, also due to declining ore grades, which will push its costs higher.

Despite the immediate negative market reaction, many analysts maintain a 'Buy' rating on Capstone, with price targets suggesting significant upside from the current trading levels. This suggests that while retail investors may have been spooked by the short-term headwinds, institutional analysts see the long-term value in the company's aggressive investment strategy. For Capstone Copper, 2026 will be a year of execution, a period where it must prove it can manage its existing assets reliably while laying the multi-billion-dollar groundwork for its future as a premier copper producer.