MANAGEMENT'S DISCUSSION AND ANALYSIS AND CONDENSED

INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

(unaudited)

For the Three and Nine Months Ended September 30, 2021

(Expressed in US Dollars)

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

September 30, 2021

(Expressed in United States ("US") Dollars)

Capstone Mining Corp.

Condensed Interim Consolidated Statements of Financial Position

unaudited - expressed in thousands of US dollars

As at

ASSETS

September 30, 2021

December 31, 2020

Current

Cash and cash equivalents

$

206,082

$

56,580

Short-term investments (Note 4)

2,120

3,425

Receivables (Note 5)

18,816

26,691

Inventories (Note 6)

55,932

58,238

Other assets (Note 8)

23,604

12,937

306,554

157,871

Mineral properties, plant and equipment (Note 7)

1,284,082

1,147,784

Promissory note receivable (Note 10)

-

27,080

Deferred income tax assets (Note 14)

30,074

28,841

Other assets (Note 8)

16,929

30,008

Total assets

$

1,637,639

$

1,391,584

LIABILITIES

Current

Accounts payable and accrued liabilities

$

94,183

$

74,866

Other liabilities (Note 9)

109,256

19,004

203,439

93,870

Long term debt (Note 12)

-

183,226

Deferred revenue (Note 13)

163,428

-

Lease liabilities (Note 11)

13,538

8,307

Provisions

142,794

141,780

Deferred income tax liabilities (Note 14)

94,547

65,135

Other liabilities (Note 9)

47,892

10,099

Total liabilities

$

665,638

$

502,417

EQUITY

Share capital

$

849,119

$

842,789

Other reserves

36,661

33,783

Retained earnings (accumulated deficit)

86,221

(97,514)

Total equity attributable to equity holders of the Company

972,001

779,058

Non-controlling interest (Note 10)

-

110,109

Total equity

972,001

889,167

Total liabilities and equity

$

1,637,639

$

1,391,584

Commitments (Note 7)

See accompanying notes to these condensed interim consolidated financial statements.

2

Capstone Mining Corp.

Condensed Interim Consolidated Statements of Income (Loss)

Three and Nine Months Ended September 30, 2021 and 2020

unaudited - expressed in thousands of US dollars, except share and per share amounts

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

Revenue (Note 16)

$

165,412

$

130,545

$

578,876

$

305,636

Operating costs

Production costs

Royalties

Depletion and amortization

Earnings from mining operations

General and administrative expenses (Note 19) Exploration expenses (Note 7)

Impairment reversal on mineral properties

(Note 7)

Care and maintenance expense (Note 7) Share-based compensation expense (Note 15) Earnings from operations

(80,544)

(79,228)

(247,818)

(216,605)

(1,717)

(1,187)

(5,566)

(2,523)

(20,387)

(21,486)

(67,506)

(61,474)

62,764

28,644

257,986

25,034

(4,459)

(3,646)

(12,937)

(10,162)

(146)

(412)

(1,848)

(1,158)

-

-

92,392

-

(248)

(257)

(749)

(846)

(1,203)

(7,498)

(47,042)

(10,705)

56,708

16,831

287,802

2,163

Other income (expense)

Foreign exchange gain (loss)

1,282

(1,283)

(1,098)

2,214

Other (expense) income (Note 20)

(97)

2

2,408

939

Income before finance costs and income

taxes

57,893

15,550

289,112

5,316

Interest on long term debt and surety bonds

(966)

(3,366)

(3,815)

(9,756)

(Note 21)

Other interest expense (Note 21)

(4,263)

(535)

(8,624)

(1,788)

Income (loss) before income taxes

52,664

11,649

276,673

(6,228)

Income tax expense (Note 14)

(17,626)

(9,338)

(65,222)

(9,037)

Net income (loss)

$

35,038

$

2,311

$

211,451

$

(15,265)

Net income (loss) attributable to:

Shareholders of Capstone Mining Corp.

$

35,038

$

2,350

$

185,415

$

(15,067)

Non-controlling interest (Note 10)

-

(39)

26,036

(198)

$

35,038

$

2,311

$

211,451

$

(15,265)

Net income (loss) per share

Income (loss) per share - basic (Note 17)

$

0.09

$

0.01

$

0.46

$

(0.04)

Weighted average number of shares - basic

406,701,553

393,546,258

405,096,229

392,916,485

(Note 17)

Income (loss) per share - diluted (Note 17)

$

0.08

$

0.01

$

0.45

$

(0.04)

Weighted average number of shares - diluted

415,287,789

402,492,634

413,386,183

392,916,485

(Note 17)

See accompanying notes to these condensed interim consolidated financial statements.

3

Capstone Mining Corp.

Condensed Interim Consolidated Statements of Comprehensive Income (Loss)

Three and Nine Months Ended September 30, 2021 and 2020

unaudited - expressed in thousands of US dollars

Three months ended September 30,

Nine months ended September 30,

2021

2020

2021

2020

Net income (loss)

$

35,038

$

2,311

$

211,451

$

(15,265)

Other comprehensive (loss) income ("OCI")

Items that will not be reclassified

subsequently to profit or loss

Change in fair value of marketable

securities, net of tax of $nil

(491)

739

2,230

106

(491)

739

2,230

106

Items that may be reclassified

subsequently to profit or loss

Foreign currency translation adjustment

(240)

174

(6)

(220)

(240)

174

(6)

(220)

Total other comprehensive (loss) income

for the period

(731)

913

2,224

(114)

Total comprehensive income (loss)

$

34,307

$

3,224

$

213,675

$

(15,379)

Total comprehensive income (loss) attributable to:

Shareholders of Capstone Mining Corp.

$

34,307

$

3,263

$

187,639

$

(15,181)

Non-controlling interest (Note 10)

-

(39)

26,036

(198)

$

34,307

$

3,224

$

213,675

$

(15,379)

See accompanying notes to these condensed interim consolidated financial statements.

4

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Capstone Mining Corporation published this content on 26 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2021 22:07:01 UTC.