Capstone Copper Corp. — Annual Report 2023

Feb 22, 2024

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CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023 and 2022

(Expressed in United States (“US”) Dollars)

Management’s Report

The accompanying consolidated financial statements of Capstone Copper Corp. (the “Company” or “Capstone”) and other information contained in the management’s discussion and analysis are the responsibility of management and have been approved by the Board of Directors. The consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards and include some amounts that are based on management’s estimates and judgment.

The Board of Directors carries out its responsibility for the consolidated financial statements principally through its Audit Committee, which is composed solely of independent directors. The Audit Committee reviews the Company’s annual consolidated financial statements and recommends its approval to the Board of Directors. The Company’s auditors have full access to the Audit Committee, with and without management being present. These consolidated financial statements have been audited by Deloitte LLP.

(Signed) John MacKenzie Chief Executive Officer & Director

(Signed) Raman Randhawa Senior Vice President & Chief Financial Officer

Vancouver, British Columbia, Canada February 21, 2024

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Independent Auditor’s Report

To the Shareholders and the Board of Directors of Capstone Copper Corp.

Opinion

We have audited the consolidated financial statements of Capstone Copper Corp. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of (loss) income, comprehensive (loss) income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards ("IFRS").

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements for the year ended December 31, 2023. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Chilean Mining Royalty - Refer to Note 16 to the financial statements

Key Audit Matter Description

During the third quarter, Chile passed the new Mining Royalty legislation (“legislation”) into law. The adoption of this legislation required complex analysis and resulted in the Company recording a deferred tax liability. The Company’s mining deferred tax liability is determined based on forecasted future cashflows (production, commodity prices and operating margins).

Management was required to make judgments to determine the accounting treatment of implementing the legislation and its relevant disclosures and as such, auditing that determination required complex analysis and consideration. While there are many estimates and assumptions used to determine the mining deferred tax liability, the estimates and assumptions with the highest degree of subjectivity and judgment are future commodity prices and operating margins. Auditing these required a high degree of auditor judgement and an increased extent of audit effort, including the involvement of fair value and tax specialists.

How the Key Audit Matter Was Addressed in the Audit

• Evaluated management’s assessment of the implications of implementing the legislation to assess whether the related accounting treatment and disclosures are in accordance with the relevant guidance;

• With the assistance of tax specialists, evaluated management’s interpretation and the methodology employed to calculate the mining deferred tax liability arising from the new legislation;

• With the assistance of fair value specialists, evaluated the reasonableness of the forecasts of future commodity prices by comparing management’s forecasts to third-party forecasts;

• Evaluated the reasonableness of forecasted operating margins by comparing the forecasts to:

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• Historical operating margins;

• External sources and industry peers; and

• ◦ Whether these assumptions were consistent with evidence obtained in other areas of the audit.

Other Information

Management is responsible for the other information. The other information comprises:

• Management's Discussion and Analysis

• The information, other than the financial statements and our auditor’s report thereon, in the Management's Discussion and Analysis and Consolidated Financial Statements (Annual Report).

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis and the Annual Report prior to the date of this auditor’s report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

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• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is David Macdonald.

/s/ Deloitte LLP

Chartered Professional Accountants Vancouver, British Columbia February 21, 2024

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Capstone Copper Corp. Consolidated Statements of Financial Position

expressed in thousands of US dollars

ASSETS	As at December 31,
	2023 2022
Current Cash and cash equivalents Short-term investments_(Note 6) Receivables(Note 7) Inventories(Note 8) Derivative assets(Note 6) Other assets(Note 10)_	$ 126,016$ 170,307 804 1,553 147,318 191,887 149,613 140,797 18,984 19,981 44,122 44,966
Mineral properties, plant and equipment_(Note 9) Derivative assets(Note 6) Deferred income tax assets(Note 16) Other assets(Note 10)_	486,857 569,491 5,286,257 4,706,311 16,565 28,582 53,401 38,704 30,835 37,820
Total assets	$ 5,873,915$ 5,380,908
LIABILITIES
Current Accounts payable and accrued liabilities Current portion of long-term debt_(Note 14) Current portion of due to related party(Note 12) Lease liabilities(Note 13) Derivative liabilities(Note 6) Income taxes payable(Note 16) Other liabilities(Note 11)_	$ 272,277$ 284,913 28,398 — 3,243 — 33,516 28,928 16,788 44,423 6,186 10,946 71,412 39,322
Long-term debt_(Note 14) Due to related party(Note 12) Deferred revenue(Note 15) Lease liabilities(Note 13) Derivative liabilities(Note 6) Provisions(Note 17) Deferred income tax liabilities(Note 16) Other liabilities(Note 11)_	431,820 408,532 970,258 599,075 192,628 60,000 147,619 160,462 102,983 74,969 — 10,066 268,132 239,635 630,225 597,585 64,128 50,728
Total liabilities	$ 2,807,793$ 2,201,052
EQUITY
Share capital Other reserves Retained earnings	$ 2,451,572$ 2,447,377 40,129 41,328 168,886 262,512
Total equity attributable to equity holders of the Company Non-controllinginterest_(Note 12)_	2,660,587 2,751,217 405,535 428,639
Total equity	3,066,122 3,179,856
Total liabilities and equity	$ 5,873,915$ 5,380,908

See accompanying notes to these consolidated financial statements.

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Capstone Copper Corp.

Consolidated Statements of (Loss) Income Years Ended December 31, 2023 and 2022

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

Revenue(Note 19) Operating costs Production costs Royalties Depletion and amortization Earnings from mining operations General and administrative expenses Exploration expenses (Note 9) Share-based compensation expense(Note 18) Income from operations Other (expense) income Foreign exchange (loss) gain Realized and unrealized gains on derivative instruments_(Note 6) (Loss) gain on extinguishment of debt(Note 14) Minto obligation(Note 17) Transaction costs(Note 5) Other expense(Note 25) Interest on long-term debt and surety bonds Accretion expense(Note 26) (Loss) income before income taxes Income tax expense(Note 16)_ Net(loss) income	2023 2022
	$ 1,345,511$ 1,296,024
	(1,014,002) (903,060) (11,225) (10,177) (237,269) (174,991)
	83,015 207,796
	(26,119) (26,244) (4,961) (9,578) (19,005) (31,756)
	32,930 140,218
	(5,066) 2,066 3,075 111,087 (2,721) 8,035 (51,923) — — (19,433) (31,202) (20,442) (14,633) (5,621) (21,463) (22,189)
	(91,003) 193,721
	(33,723) (57,582)
	$ (124,726) $ 136,139
Net (loss) income attributable to: Shareholders of Capstone Copper Corp. Non-controllinginterest_(Note 12)_	$ (101,672)$ 122,199 (23,054) 13,940
	$ (124,726) $ 136,139
Net(loss) earnings per share attributable to shareholders of Capstone Copper Corp.
(Loss) earnings per share - basic_(Note 20) Weighted average number of shares - basic (Note 20)_	$ (0.15)$ 0.20 693,520,515 625,434,676
(Loss) earnings per share - diluted_(Note 20) Weighted average number of shares - diluted (Note 20)_	$ (0.15)$ 0.19 693,520,515 630,179,251

See accompanying notes to these consolidated financial statements.

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Capstone Copper Corp. Consolidated Statements of Comprehensive (Loss) Income Years Ended December 31, 2023 and 2022

expressed in thousands of US dollars

Net (loss) income Other comprehensive loss ("OCI") Items that will not be reclassified subsequently to profit or loss Change in fair value of marketable securities, net of tax of $nil (2022 - $ 262) Remeasurement for retirement benefit plans, net of tax of $(1,307) (2022 - $65) Items that may be reclassified subsequently to profit or loss Foreign currency translation adjustment Total other comprehensive loss for the year Total comprehensive(loss) income	2023 2022
	$ (124,726) $ 136,139
	(844) (4,356) (4,690) 1,104
	(5,534) (3,252)
	— (550)
	— (550)
	(5,534) (3,802)
	$ (130,260) $ 132,337
Total comprehensive (loss) income attributable to: Shareholders of Capstone Copper Corp. Non-controllinginterest_(Note 12)_	$ (107,156)$ 118,397 (23,104) 13,940
	$ (130,260) $ 132,337

See accompanying notes to these consolidated financial statements.

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Capstone Copper Corp. Consolidated Statements of Cash Flows Years Ended December 31, 2023 and 2022

expressed in thousands of US dollars

	2023 2022
Cash provided by (used in): Operating activities Net (loss) income Adjustments for: Depletion and amortization_(Note 22) Income tax expense(Note 16) Inventory write-down (Note 8) Share-based compensation expense(Note 18)_ Net finance costs Unrealized loss (gain) on foreign exchange Unrealized gain on derivatives	$ (124,726)$ 136,139 236,884 176,173 33,723 57,582 1,863 2,809 19,005 31,756 36,096 27,810 4,937 (21,821) (17,110) (133,170)
Gold stream obligation	7,100 —
Loss (gain) on extinguishment of debt_(Note 14) Gain on disposal of assets and other Amortization of deferred revenue and variable consideration adjustments(Note 15) Minto obligation and bad debt provision Income taxes paid Income taxes received Payments on Minto obligation(Note 17) Other payments Operating cash flow before working capital and other non-cash changes Changes in non-cash working capital(Note 22) Other non-cash changes(Note 22) Operating cash flow Investing activities Mineral properties, plant and equipment additions Finance costs capitalized on construction in progress Cash acquired on business combination with Mantos(Note 5) Proceeds from short-term investments Proceeds on disposal of assets and other Investing cash flow Financing activities Proceeds from borrowings(Note 14) Repayment of borrowings(Note 14) Proceeds from related party (Note 12) Payment on purchase of non-controlling interest(Note 11)_ Repayment of lease obligations Proceeds from the exercise of options Net receipts (payments) for settlement of derivatives Interest paid on long-term debt and surety bonds Other Financing cash flow Effect of exchange rate changes on cash and cash equivalents Decrease in cash and cash equivalents Cash and cash equivalents - beginningofyear	2,721 (8,035) — (226) (19,033) (12,885) 56,923 — (26,233) (70,534) 4,529 592 (10,407) — (1,468) (1,384)
	204,804 184,806
	(90,635) (93,809) 2,648 (3,575)
	116,817 87,422
	(616,729) (559,752) (61,540) (23,401) — 219,211 2,825 706 2,165 (7,505)
	(673,279) (370,741)
	544,375 482,242 (120,375) (241,992) 129,900 60,000 — (34,731) (42,716) (29,473) 2,722 3,112 3,216 (39,426) (6,591) (7,594) (2,061) —
	508,470 192,138
	3,701 (606)
	(44,291) (91,787) 170,307 262,094
Cash and cash equivalents - end ofyear	$ 126,016$ 170,307
Supplemental cash flow information(Note 22)

See accompanying notes to these consolidated financial statements.

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Capstone Copper Corp.

Consolidated Statements of Changes in Equity Years Ended December 31, 2023 and 2022

expressed in thousands of US dollars, except share amounts

January 1, 2023 Shares issued on exercise of options(Note 18) Shares issued under TSUP(Note 18) Share-based compensation(Note 18) Settlement of share units Change in fair value of marketable securities Remeasurements for retirement benefit plans Net loss	Attributable to equityholders of the Company Number of shares Share capital Reserve for equity settled share-based transactions Revaluation reserve Foreign currency translation reserve Share purchase reserve Retained earnings Total attributable to equity holders Non- controlling interest Total equity
	691,639,972 $ 2,447,377 $ 56,751 $ 4,178 $ (17,101) $ (2,500) $ 262,512 $ 2,751,217 $ 428,639 $ 3,179,856 4,371,345 3,991 (1,267) — — — — 2,724 — 2,724 61,836 204 (204) — — — — — — — — — 3,961 — — — — 3,961 — 3,961 — — — — — 1,795 8,046 9,841 — 9,841 — — — (844) — — — (844) — (844) — — — (4,640) — — — (4,640) (50) (4,690) — — — — — — (101,672) (101,672) (23,054) (124,726)
December 31, 2023	696,073,153 $ 2,451,572 $ 59,241 $ (1,306) $ (17,101) $ (705) $ 168,886 $ 2,660,587 $ 405,535 $ 3,066,122
Balance - January 1, 2022 Shares issued on exercise of options Share-based compensation Settlement of share units Shares issued as compensation Acquisition of Mantos Copper (Note 5) Change in fair value of marketable securities Remeasurements for retirement benefit plans Net income Foreign currencytranslation	Number of shares Share capital Reserve for equity settled share-based transactions Revaluation reserve Foreign currency translation reserve Share purchase reserve Retained earnings Total attributable to equity holders Non- controlling interest Total equity 413,482,355 849,409 53,264 7,429 (16,551) (5,134) 128,010 1,016,427 — 1,016,427 4,130,553 4,637 (1,553) — — — — 3,084 — 3,084 — — 5,040 — — — — 5,040 — 5,040 — — — — — 2,634 12,303 14,937 — 14,937 138,523 652 — — — — — 652 — 652 273,888,541 1,592,679 — — — — — 1,592,679 414,699 2,007,378 — — — (4,355) — — — (4,355) — (4,355) — — — 1,104 — — — 1,104 — 1,104 — — — — — — 122,199 122,199 13,940 136,139 — — — — (550) — — (550) — (550)
December 31, 2022	691,639,972 $ 2,447,377 $ 56,751 $ 4,178 $ (17,101)$ (2,500)$ 262,512 $ 2,751,217 $ 428,639 $ 3,179,856

See accompanying notes to these consolidated financial statements.

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Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

1. Nature of Operations

The accompanying consolidated financial statements have been prepared as at December 31, 2023, after giving effect to the business combination between Capstone Mining Corp. (“Capstone Mining”) and Mantos Copper (Bermuda) Ltd. (“Mantos”), which was completed on March 23, 2022 (the “Transaction”) (Note 5). Mantos was incorporated on August 15, 2015 and migrated to British Columbia, Canada on March 22, 2022, as part of the Transaction. After the Transaction, the combined entity changed its name to Capstone Copper Corp. (the "Company" or "Capstone Copper"). The Company is listed on the Toronto Stock Exchange, and, effective February 2, 2024, the Company was admitted to the official list of the Australian Securities Exchange (“ASX”) as an ASX Foreign Exempt Listing.

Capstone Copper Corp., through a wholly owned Chilean subsidiary, Mantos Copper S.A., owns and operates the Mantos Blancos mine, located forty-five kilometers northeast of Antofagasta, Chile and the 70%-owned Mantoverde mine, through a Chilean subsidiary, Mantoverde S.A., located fifty kilometers southeast of Chanaral, Chile.

The Company is also engaged in the production of and exploration for base metals in the United Sates (“US”), Mexico, and Chile, with a focus on copper. Pinto Valley Mining Corp. (“Pinto Valley”), a wholly owned US subsidiary, owns and operates the Pinto Valley mine located in Arizona, US. Capstone Gold, S.A. de C.V. (“Capstone Gold”), a wholly owned Mexican subsidiary, owns and operates the Cozamin mine located in Zacatecas, Mexico, and has a portfolio of exploration properties in Mexico. Minera Santo Domingo SCM, a wholly owned Chilean subsidiary of Acquisition Co, holds the Santo Domingo copper-iron development project in Chile. Capstone Mining Chile SpA, a wholly owned Chilean subsidiary, is performing exploration for base metal deposits in Chile.

The Company's head office, registered and records office and principal address are located at 2100 - 510 West Georgia Street, Vancouver, British Columbia, Canada and the Company is incorporated in British Columbia.

These consolidated financial statements were approved by the Board of Directors and authorized for issuance on February 21, 2024.

2. Basis of preparation and consolidation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”). The consolidated financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments which are measured at fair value.

These consolidated financial statements have been prepared in accordance with the accounting policies presented below and are based on IFRS and IFRS Interpretations Committee (“IFRIC”) interpretations issued and effective as of December 31, 2023. The policies set out below were consistently applied to all of the periods presented.

Certain comparative figures have been reclassified to conform with changes in the presentation of the current year. Realized (gains) losses on derivatives were previously presented within (gains) losses on derivatives in the operating activities section of the consolidated statements of cash flows and has now been reclassified and presented in changes in non-cash working capital, specifically changes in accounts payable and accrued liabilities. Net proceeds on settlement of derivatives was previously included on its own line within the operating activities section of the consolidated statements of cash flows and has now been reclassified and presented in changes in non-cash working capital, specifically changes in accounts payable and accrued liabilities. Non-current ore stockpiles were previously presented in current ore stockpiles and have now been reclassified to non-current other assets. These reclassifications had no effect on the previously reported operating cash flow, net income and net equity for the comparative period.

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Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Group Companies

The immediate parent and ultimate controlling party of the group is Capstone Copper Corp. (incorporated in British Columbia, Canada).

The details of the Company’s material entities, ownership interests, and functional currency are as follows:

Name	Location	Ownership	Status	Functional Currency
Pinto Valley Mining Corp.	US	100.0%	Consolidated	US dollar
Mantos Copper S.A.	Chile	100.0%	Consolidated	US dollar
Mantoverde S.A.	Chile	70.0%	Consolidated	US dollar
Capstone Gold, S.A. de C.V.	Mexico	100.0%	Consolidated	US dollar
Minera Santo Domingo SCM	Chile	100.0%	Consolidated	US dollar

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.

Any transactions with other related parties in the normal course of operations are measured at the fair value amount of consideration established and agreed to by the related parties. Any amounts due to/receivable from related parties are unsecured, non-interest bearing and have no specific repayment terms.

3 Material Accounting Policy Information, Estimates and Judgements

a. Use of estimates and judgments

The preparation of the consolidated financial statements requires management to select accounting policies and make estimates and judgments that may have a significant impact on the consolidated financial statements. Estimates are continuously evaluated, and are based on management’s experience and expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Critical judgments exercised in applying accounting policies, apart from those involving estimates, that have the most significant effect on the amounts recognized in the consolidated financial statements are as follows:

• i. Economic recoverability and probability of future economic benefits of mineral exploration, evaluation and development costs

• The Company has determined that exploratory drilling, evaluation, development, and related costs incurred, which were capitalized, have future economic benefits and are economically recoverable. In making this judgment, the Company has assessed various sources of information including, but not limited to, the geologic and metallurgic information, history of conversion of mineral deposits to proven and probable reserves, scoping and feasibility studies, proximity to existing ore bodies, existing permits, and life of mine plans.

• ii. Assessment of impairment and impairment reversal indicators Management applies significant judgement in assessing whether indicators of impairment or impairment reversal exist for a cash generating unit ("CGU") which would necessitate impairment testing. Internal and external factors such as significant changes in the use of the asset, commodity prices, foreign exchange rates, capital and production forecasts, mineral reserves and resource estimates and discount rates are used by management in determining whether there are any indicators of impairment or impairment reversal.

• iii. Functional currency

The functional currency of each of the Company’s subsidiaries is the currency of the primary economic environment in which the entity operates.

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Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Determination of functional currency may involve certain judgments to determine the primary economic environment and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment. The US dollar is Capstone’s functional currency.

iv. Financial instruments

Financial assets and liabilities are designated upon inception to various classifications. The designation determines the method by which the financial instruments are carried on the consolidated statement of financial position subsequent to inception and how changes in value are recorded. The designation may require the Company to make certain judgments, taking into account management’s intention of the use of the financial instruments.

Key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are:

• i. Estimated reclamation and closure costs

The Company’s provision for reclamation and closure cost obligations represents management’s best estimate of the present value of the future cash outflows required to settle the liability. The provision reflects estimates of future costs directly attributable to remediating the liability, inflation, movements in foreign exchange rates and assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting future cash outflows. Changes in the factors above can result in a change to the provision recognized by the Company. To the extent the carrying value of the related mining property is not increased above its recoverable amount, changes to reclamation and closure cost obligations are recorded with a corresponding change to the carrying amounts of related mining properties.

• ii. Share-based compensation

The Company uses the fair value method of accounting for all share-based payments. The fair value method of accounting includes the use of the Black-Scholes Option Pricing Model. Option pricing models require the input of subjective assumptions including the volatility, expected life, and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate, the Company’s earnings, and equity reserves. The portion of share-based compensation recorded is based on the vesting schedule of the options and units.

The Performance Share Units (“PSUs”) and Treasury Performance Share Units ("TPSUs") include the use of a performance factor that can range from 0% to 200% and is determined by comparing the Company’s total shareholder return to those achieved by a peer group of companies, which can affect the fair value estimate.

• iii. Income taxes

Deferred tax assets and liabilities are determined based on differences between the financial statement carrying values of assets and liabilities and their respective income tax bases (“temporary differences”), and losses carried forward.

The determination of the ability of the Company to utilize tax loss carry-forwards to offset deferred tax liabilities requires management to exercise judgment and make certain assumptions about the future performance of the Company. Management is required to assess whether it is probable that the Company will benefit from these prior losses and other deferred tax assets. The tax rates expected to be in effect when temporary differences reverse are 21% for US, 27% for Canada, 30% for Mexico and 27% for Chile. The Company is subject to certain mining royalties which are referenced in Note 16. The Chilean Mining Royalty has progressive tax rates ranging from 8% to 26% based on the adjusted mining operating income ("RIOMA") and the rate on mining royalties in Mexico is 7.5%. Changes in economic conditions, metal prices, applicable tax laws and other factors could result in revisions to the estimates of the benefits to be realized or the timing of utilizing the losses.

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Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

• iv. Mineral reserve and resource estimates Mineral reserves and mineral resources referenced in these financial statements are determined in accordance with National Instrument 43-101, “Standards of Disclosure for Mineral Projects”, issued by the Canadian Securities Administrators. There are numerous uncertainties inherent in estimating mineral reserves and mineral resources, including many factors beyond the Company’s control. Such estimation is a subjective process, and the accuracy of any mineral reserve or mineral resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. Differences between management’s assumptions in estimating mineral reserves and mineral resources, including economic assumptions such as metal prices, and the market conditions could have a material effect in the future on the Company’s financial position and results of operation.

• v. Depletion rates

The carrying amounts of the Company’s producing mining properties are depleted based on recoverable tonnes contained in permitted proven and probable mineral reserves and a portion of mineral resources. The Company includes a portion of permitted mineral resources where it is considered highly probable that those resources will be economically extracted over the life of mine. Changes to estimates of recoverable tonnes of permitted reserves and resources and depletable costs including changes resulting from revisions to the Company’s mine plans and changes in metal price forecasts can result in a change to future depletion rates.

• vi. Amortization rate for property, plant and equipment and depletion rates for mining interests Depletion and amortization expenses are allocated based on estimated asset lives. Should the asset life, depletion rates, or amortization rates differ from the initial estimate, an adjustment would be made in the consolidated statement of (loss) income on a prospective basis.

• vii. Impairment of mineral properties, plant and equipment

• Management considers both external and internal sources of information in assessing whether there are any indications that the Company’s mineral properties, plant and equipment are impaired and whether previously recorded impairments should be reversed. External sources of information management considers include changes in the market, economic and legal environment in which the Company operates that are not within its control and affect the recoverable amount of its mineral properties, plant and equipment. Internal sources of information that management considers include the manner in which mineral properties, plant and equipment are being used or are expected to be used and indications of economic performance of the assets. Management concluded that there were no indicators of impairment for the years ended December 31, 2023 and 2022.

In determining the recoverable amounts of the Company’s mineral properties, plant and equipment, management makes estimates of the future operating results and discounted net cash flows expected to be derived from the Company’s mining properties, costs to sell the mining properties and the appropriate discount rate. Changes in metal price forecasts, estimated future costs of production, estimated future non-expansionary capital expenditures, fair value due to strategic processes, the amount of recoverable mineral reserves, mineral resources, and exploration potential, and/or changes in current economics, regulatory or legal requirements and comparable market transactions can result in a write-down or a reversal of a previous write-down of the carrying amounts of the Company’s mineral properties, plant and equipment. Management concluded that there were no indicators of impairment, or reversal of impairments previously recorded, for the years ended December 31, 2023 and 2022, respectively.

14

Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

viii. Deferred stripping costs

In determining whether stripping costs incurred during the production phase of a mining property relate to mineral reserves that will be mined in a future period and therefore should be capitalized, the Company makes estimates of the proportion of stripping activity which relates to extracting ore in the current period versus the proportion which relates to obtaining access to ore reserves which will be mined in the future. The Company includes a portion of permitted mineral resources where it is considered highly probable that those resources will be economically extracted over the life of mine.

ix. Inventory valuation

Consumable parts and supplies, ore stockpiles and concentrates, are valued at the lower of cost and net realizable value. Estimates in the carrying values of inventories arise due to the nature of the valuation of ore stockpiles and concentrates based on an appropriate allocation of direct mining costs, direct labour and material costs, mine site overhead, and depletion and amortization.

Long-term inventory consists of ore stockpiles that are not expected to be processed within one year. The Company carries its long-term inventory at the lower of cost and net realizable value. If the carrying value exceeds the net realizable amount, a write-down is required. The write-down may be reversed in a subsequent period if the circumstances which caused it no longer exist.

• x. Valuation of financial instruments, including estimates used in provisional pricing calculations Financial instrument estimates are based on either unadjusted quoted prices in active markets or direct or indirect observable inputs. Provisional pricing calculations are determined based on the change in the value of forward commodity prices of metals. To account for the change in metal prices from the total contract value to the 90% of the provisional value amount that has been received, estimates of the value of concentrates are used to determine the provisionally priced concentrate receivables at each period.

• xi. Accounting for acquisitions Determining the fair value of assets acquired and liabilities assumed and resulting goodwill, if any, requires that management make certain judgements and estimate taking into account information available at the time of acquisition about future events, including, but not restricted to, future metal prices, estimates of mineral reserves and resources acquired, expected future production costs and capital expenditures based on the life of mine plans, long-term foreign exchange rates, discount rates, and in-situ multiples to determine non-depletable mineral property. Changes to the provisional values of assets acquired and liabilities assumed, deferred income taxes and resulting goodwill, if any, are retrospectively adjusted when the final measurements are determined if related to conditions existing at the date of acquisition (within one year of acquisition).

b. Material accounting policy information of the Company is as follows:

• i. Translation of foreign currencies

The functional currency and presentation currency of the Company is the US dollar. The functional currency of each entity is determined after consideration of the primary economic environment of the entity. The functional currencies of the Company’s material subsidiaries are listed in Note 21.

Financial statements of subsidiaries are maintained in their functional currencies and converted to US dollars for consolidation of the Company’s results.

Transactions denominated in foreign currencies (currencies other than the functional currency of an entity) are translated at the exchange rates on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at reporting date exchange rates and any gain or loss on translation is recorded in the consolidated statement of (loss) income as a foreign exchange gain (loss).

15

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

On translation of entities with functional currencies other than the US dollar, consolidated statement of (loss) income items are translated at average rates of exchange where this is a reasonable approximation of the exchange rate at the dates of the transactions. Consolidated statement of financial position items are translated at closing exchange rates as at the reporting date. Exchange differences on the translation of the foreign currency entities at closing rates, together with differences between consolidated statement of (loss) income translated at average and closing rates, are recorded in the foreign currency translation reserve in equity.

• ii. Cash, and cash equivalents

Cash and cash equivalents is comprised of cash on hand, demand deposits and short-term investments with a maturity less than 90 days on acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of change in value.

• iii. Inventories

Inventories for consumable parts and supplies, ore stockpiles and concentrates, are valued at the lower of cost and net realizable value. Costs allocated to consumable parts and supplies are based on average costs and include all costs of purchase, conversion and other costs in bringing these inventories to their existing location and condition. Costs allocated to ore stockpiles and concentrates are based on average costs, which include an appropriate share of direct mining costs, direct labour and material costs, mine site overhead, depletion and amortization. If carrying value exceeds net realizable amount, a write down is recognized. The write down may be reversed in a subsequent period if the circumstances which caused it no longer exist.

• iv. Investments

Investments in shares of companies over which the Company exercises neither control, joint control nor significant influence are designated as fair value through OCI and recorded at fair value. Fair values are determined by reference to quoted market prices at the reporting date. Unrealized gains and losses on investments in marketable securities are recognized in the revaluation reserve. When investments in marketable securities are sold, derecognized, or determined to be impaired, the cumulative fair value adjustments remain within equity.

• v. Mineral properties, plant and equipment

• Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing historical characteristic of many properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties is in good standing.

• vi. Producing mineral properties

Producing mineral properties are recorded at cost less accumulated depletion and impairment charges. The costs associated with producing mineral properties include acquired interests in production stage properties representing the fair value at the time they were acquired. Producing mineral properties also include additional capitalized costs after initial acquisition. Upon sale or abandonment of producing mineral properties, the carrying value is derecognized and any gains or losses thereon are included in the consolidated statement of (loss) income.

Non-depletable mineral interests are recorded at their fair value on acquisition date, either as part of a business combination or as an individual asset purchase. The value of such assets is primarily driven by the nature and amount of mineralized material believed to be contained in such properties.

16

Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Commercial production is deemed to have commenced when management determines that the operational commissioning of major mine and plant components is complete, operating results are being achieved consistently for a period of time and that there are indicators that these operating results will continue. At the date commercial production is reached, the Company ceases capitalization of any applicable borrowing costs and commences amortization of the associated assets. The Company determines commencement of commercial production based on several factors, which indicate that planned principal operations have commenced. These include the following:

• a significant portion of plant capacity is achieved;

• a significant portion of available funding is directed towards operating activities;

• a pre-determined, reasonable period of time has passed; and

• a development project significant to the primary business objectives of the enterprise has been completed as to significant milestones being achieved.

vii.

Deferred stripping

Stripping costs during the production phase are accounted for as variable production costs and included in the costs of inventory produced during the period that the stripping costs are incurred. However, stripping costs are capitalized and recorded on the consolidated statement of financial position as a component of mineral properties, plant and equipment when the stripping activity provides access to sources of mineral reserves that will be produced in future periods that would not have otherwise been accessible in the absence of this activity. The capitalized deferred stripping assets are amortized on a units of production basis over the mineral reserves and a portion of mineral resources that directly benefited from the stripping activity as those mineral reserves and resources are actually mined.

viii. Mineral exploration and development properties The carrying amount of mineral exploration and development properties comprise costs that are directly attributable to:

• researching and analysing existing exploration data;

• conducting geological studies, exploratory drilling and sampling;

• examining and testing extraction and treatment methods; and

• activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral resource.

The costs associated with mineral exploration and development properties include acquired interests in development and exploration stage properties representing the fair value at the time they were acquired. Mineral exploration and development properties related to greenfield properties, which are prospective in nature and not yet supported by an internal economic assessment, are expensed in the consolidated statement of (loss) income, except for acquisition costs and mining interest rights. Exploration and development expenses related to brownfield mineral properties are capitalized provided that one of the following conditions is met:

• Such costs are expected to be recouped in full through successful development and exploitation of the area of interest or alternatively, by its sale; or

• Exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence of economically recoverable reserves, however active and significant operations in relation to the area are continuing, or planned for the future.

The carrying values of capitalized amounts of mineral exploration and development properties are reviewed when there are indicators of impairment at each reporting date. In the case of undeveloped projects, there may be only inferred mineral resources to allow management to form a basis for the impairment review. The review is based on the Company’s intentions for development of such a project. If a project does not prove viable, all unrecoverable costs associated with the project are charged to the consolidated statement of (loss) income at the time the determination is made.

17

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Once management has determined that the development potential of the property is economically viable and the necessary permits are in place for its development, and the criteria in Note 3(c)(vi) are met, the costs of the exploration asset are reclassified to producing mineral properties.

ix. Plant and equipment

Plant and equipment are recorded at cost less accumulated amortization and impairment losses and includes amounts representing the fair value of plant and equipment at the time they were acquired. Plant and equipment includes in its purchase price, any costs directly attributable to bringing plant and equipment to the location and condition necessary for it to be capable of operating in the manner intended by management and the estimated close down and restoration costs associated with dismantling and removing the asset. Upon sale or abandonment of any plant and/or equipment, the cost and related accumulated amortization and impairment losses, are written off and any gains or losses thereon are included in the consolidated statement of (loss) income.

x. Construction in progress Mineral property development and plant and equipment construction commences when approved by management and/or the Board and the Company has obtained all regulatory permissions to proceed. Development and construction expenditures are capitalized and classified as construction in progress. Once completed, the costs associated with all applicable assets related to the development and construction are reclassified to the appropriate category within mineral properties or plant and equipment.

xi. Depletion and amortization of mineral properties, plant and equipment The carrying amounts of mineral properties, plant and equipment are depleted or amortized to their estimated residual value over the estimated economic life of the specific assets to which they relate, using the depletion or amortization methods and rates as indicated below. Estimates of residual values and useful lives are reassessed annually and any change in estimate is taken into account in the determination of the remaining amortization rate. Amortization commences on the date the asset is available for its use as intended by management.

Depletion and amortization is computed using the following rates:

Item	Methods	Rates
Producing mineral	Units of production	Proven and probable mineral reserves and a
properties		portion of mineral resources considered highly
		probable to be economicallyextracted
Deferred stripping costs	Units of production	Proven and probable mineral reserves and a
		portion of mineral resources accessible due to
		stripping activity which are considered highly
		probable to be economicallyextracted
Right-of-use assets	Straight line	Tenure of lease
Plant & equipment	Straight line,	4 – 10 years,
	units of production	Proven and probable mineral reserves and a
		portion of mineral resources considered highly
		probable to be economicallyextracted

xii. Borrowing costs

Interest and other financing costs directly related to the acquisition, development and construction, and production of qualifying assets are capitalized as construction in progress or in mineral properties until they are complete and available for use, at which time they are transferred to the appropriate category within mineral properties, plant and equipment. Borrowing costs incurred after the asset has been placed into service as well as all other borrowing costs are charged to the consolidated statement of income when incurred.

18

Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

xiii. Impairment of long-lived assets

At each reporting date, the Company reviews the carrying amounts of its assets to determine whether there are any indicators of impairment. If any such indicator exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.

Where the asset does not generate cash inflows that are independent from other assets, the Company estimates the recoverable amount of the CGU to which the asset belongs. The recoverable amount is determined as the higher of fair value less direct costs to sell and the asset or CGU’s value in use. In assessing recoverable amount, the estimated future cash flows are discounted to their present value. Estimated future cash flows are calculated using estimated recoverable mineral reserves and mineral resources, estimated future commodity prices and the expected future operating, capital and reclamation costs. The projected cash flows are affected by changes in assumptions about metal selling prices, future capital expenditures, production cost estimates, discount rates, and exchange rates. The discount rate applied to the estimated future cash flows reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. Determining the discount rate includes appropriate adjustments for the risk profile of the country in which the individual asset or CGU operates.

If the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying amount of the asset or CGU is reduced to its recoverable amount and an impairment loss is recognized in the consolidated statement of (loss) income. Assets that have been impaired are tested for possible reversal of the impairment whenever events or changes in circumstance indicate that the impairment may have reversed. Where an impairment subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but only so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of amortization or depletion) had no impairment loss been recognized for the asset or CGU in prior periods. A reversal of impairment is recognized in the consolidated statement of (loss) income.

xiv. Income taxes

Current tax

Current tax for each taxable entity in the Company is based on the local taxable income at the local statutory tax rate enacted or substantively enacted at the reporting date, and includes adjustments to tax payable or recoverable in respect of previous periods.

Deferred tax

Deferred tax is accounted for using the liability method, providing for the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and their respective tax bases.

Deferred income tax liabilities are recognized for all taxable temporary differences except where the deferred income tax liability arises from the initial recognition of goodwill, or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit or loss nor taxable profit or loss.

Deferred income tax assets are recognized for all deductible temporary differences, carry-forward of unused tax losses and unused tax credits, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax losses and unused tax credits can be utilized, and except where the deferred income tax asset related to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit or loss nor taxable profit or loss.

19

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

The carrying amount of deferred income tax assets is reviewed at each reporting date and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be utilized. To the extent that an asset not previously recognized fulfils the criteria for recognition, a deferred income tax asset is recorded.

Deferred tax is measured on an undiscounted basis using the tax rates that are expected to apply in the period when the liability is settled or the asset is realized, based on tax rates and tax laws enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis. Current and deferred taxes relating to items recognized directly in equity are recognized in equity and not in the consolidated statement of (loss) income.

Mining taxes and royalties are treated and disclosed as current and deferred taxes if they have the characteristics of an income tax. This is considered to be the case when they are imposed under government authority and the amount payable is calculated by reference to revenue derived (net of any allowable deductions) after adjustment for items comprising temporary differences.

xv. Taxes receivable

Taxes receivable are composed of income and mining taxes in Mexico, US and Chile and recoverable value added taxes in Canada, Mexico, US and Chile.

xvi. Embedded derivatives

Derivatives may be embedded in other financial instruments (the “host instrument”). Embedded derivatives are treated as separate derivatives when their economic characteristics and risks are not clearly and closely related to those of the host instrument, the terms of the embedded derivative are the same as those of a stand-alone derivative, and the combined contract is designated as held for trading or at fair value, as appropriate. These embedded derivatives are measured at fair value with subsequent changes recognized in gains or losses on derivative instruments in the consolidated statement of (loss) income.

xvii. Derivatives

Derivatives are initially recognized at fair value when the Company becomes a party to the derivative contract and are subsequently re-measured to fair value at the end of each reporting period. The resulting gain or loss is recognized in the consolidated statement of income immediately unless the derivative is designated and effective as a hedging instrument. Derivatives with positive fair value are recognized as assets; derivatives with negative fair value are recognized as liabilities.

Derivative contracts that are entered to economically hedge a risk exposure but are not designated as a hedging instrument for hedge accounting purposes, and are physically settled are initially and subsequently measured at fair value. Subsequent movements in fair value are recognized in the same line item in the consolidated income statement as the item the contract is economically hedging.

xviii. Compound instruments

The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the contractual agreement, where the convertible component qualifies as equity. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar debt instruments. This amount is recorded as a liability on an amortized cost basis until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. Where the convertible component does not qualify as equity, and is considered to be an embedded derivative, the convertible component is included as a financial liability and is measured at FVTPL.

20

Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

xix. Financial instruments

On initial recognition, financial assets are recognized at fair value and are subsequently classified and measured at: (i) amortized cost; (ii) fair value through other comprehensive income (“FVOCI”); or (iii) FVTPL. The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial asset is measured at fair value net of transaction costs that are directly attributable to its acquisition except for financial assets at FVTPL where transaction costs are expensed. All financial assets not classified and measured at amortized cost or FVOCI are measured at FVTPL. On initial recognition of an equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI.

The classification determines the method by which the financial assets are carried on the consolidated statement of financial position subsequent to inception and how changes in value are recorded. Accounts receivable are measured at amortized cost with subsequent impairments recognized in the consolidated statement of (loss) income. Short-term investments, concentrate receivables, promissory note receivables and derivative assets are measured at FVTPL with subsequent changes recognized in the consolidated statement of (loss) income.

Short-term investments include investments in bankruptcy-remote, AAA rated money market funds, and exchange traded funds. The mark-to-market adjustments for provisional pricing changes on concentrate receivables are based on forward commodity prices of metals and are included in revenues until final settlement. Investments in marketable securities are measured at FVOCI with subsequent changes recognized in OCI. Derivative assets include zero cost collar foreign currency contracts and interest rate swap contracts and are measured at FVTPL.

Financial liabilities are designated as either: (i) FVTPL; or (ii) amortized cost. All financial liabilities are classified and subsequently measured at amortized cost except for financial liabilities at FVTPL. The classification determines the method by which the financial liabilities are carried on the consolidated statement of financial position subsequent to inception and how changes in value are recorded. Accounts payable and accrued liabilities and long-term debt are classified as amortized cost and carried on the consolidated statement of financial position at amortized cost. Derivative liabilities consist of foreign currency contracts and copper commodity contracts and are measured at FVTPL.

• xx. Impairment and uncollectibility of financial assets

An ‘expected credit loss’ impairment model applies, which requires a loss allowance to be recognized based on expected credit losses. This applies to financial assets measured at amortized cost. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset’s original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in the consolidated statement of (loss) income for the period.

In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through the consolidated statement of (loss) income to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

xxi. Deferred revenue

Deferred revenue consists of payments received by the Company in consideration for future commitments to deliver payable gold and silver contained in concentrate at contracted prices. As deliveries are made, the Company records a portion of the deferred revenue as sales, based on a proportionate share of deliveries made compared with the total estimated contractual commitment.

21

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Interest expense on deferred revenue is recognized in finance costs when the Company identifies significant financing components related to its streaming arrangements, resulting from a difference in - the timing of the up front consideration received and delivery of the promised goods. The interest rate is determined based on the rate implicit in each streaming agreement at the date of inception or acquisition.

The initial consideration received from streaming arrangements is considered variable, subject to changes in the total gold and silver ounces to be delivered. As product is delivered, the deferred revenue amount including accreted interest will be taken into net (loss) income. The draw down rate requires the use of proven and probable reserves and certain resources in the calculation that are beyond proven and probable reserves which management is reasonably confident will be transferable to reserves. Key estimates used in determining the significant financing component include the discount rate and the reserve and resources assumed for conversion. Changes to variable consideration are reflected in revenue in the consolidated statement of (loss) income.

xxii. Leases

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognizes a right-of-use asset (“ROU asset”) and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, at the commencement of the lease, with the following exceptions: (i) the Company has elected not to recognize ROU assets and liabilities for leases where the total lease term is less than or equal to 12 months, or (ii) for leases of low value. The payments for such leases are recognized in the consolidated statement of income on a straight-line basis over the lease term.

The ROU asset is initially measured based on the present value of lease payments, lease payments made at or before the commencement day, and any initial direct costs. They are subsequently measured at cost less accumulated amortization and impairment losses. The ROU asset is depreciated over the shorter of the lease term or the useful life of the underlying asset. The ROU asset is subject to testing for impairment if there is an indicator of impairment.

The lease liability is initially measured at the present value of lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. Lease payments include fixed payments less any lease incentives, and any variable lease payments where variability depends on an index or rate.

When the lease contains an extension or purchase option that the Company considers reasonably certain to be exercised, the cost of the option is included in the lease payments.

ROU assets are included in mineral properties, plant and equipment, and the lease liability is presented separately in the consolidated statement of financial position.

Variable lease payments that do not depend on an index or rate are not included in the measurement of the ROU asset and lease liability. The related payments are recognized as an expense in the period in which the triggering event occurs and are included in the consolidated statement of (loss) income.

22

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

xxiii. Reclamation and closure cost obligations

• A reclamation and closure cost obligation is recognized for close down, restoration and environmental rehabilitation costs (which include the dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas) in the financial period when the related environmental disturbance occurs, based on the estimated future costs using information available at the consolidated statement of financial position date. At the time of establishing the provision, a corresponding asset is capitalized, where it gives rise to a future benefit, and amortized over the estimated economic life of the specific assets to which they relate. The provision is discounted using a current market-based pre-tax discount rate and the unwinding of the discount is included in accretion expense in the consolidated statement of (loss) income as interest expense from discounting reclamation and closure cost obligations.

The obligation is reviewed each reporting period for changes to obligations, laws and discount rates that impact estimated costs or lives of operations. The cost of the related asset is adjusted for changes in the provision resulting from changes in the estimated cash flows or discount rate and the adjusted cost of the asset is amortized prospectively.

xxiv. Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where the effect is material, the provision is discounted to net present value using an appropriate current market-based pre-tax discount rate.

• xxv. Post-employment benefits

• Employment terms may provide for payment of a severance indemnity when an employment contract comes to an end. This is typically at the rate of one month for each year of service (subject in most cases to a cap as to the number of qualifying years of service) and based on final salary level. The severance indemnity obligation is treated as an unfunded defined benefit plan, and the calculation is based on valuations performed by an independent actuary using the projected unit credit method, which are regularly updated.

The obligation recognized in the balance sheet represents the present value of the severance indemnity obligation. Actuarial gains and losses are immediately recognized in other comprehensive income.

xxvi. Business combinations and goodwill

• Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the notional number of equity instruments that the legal subsidiary would have had to issue to the legal parent to give the owners of the legal parent the same percentage ownership in the combined entity. The results of businesses acquired during the year are included in the consolidated financial statements from the effective date when control is obtained. The identifiable assets, liabilities and contingent liabilities of the business which can be measured reliably are recorded at provisional fair values at the date of acquisition. These provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. Provisional fair values are finalized at the earlier of (i) the date as soon as the acquirer received the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not available; or (ii) twelve months from the acquisition date. Acquisition related costs are expensed as incurred.

Goodwill arising in a business combination is measured as the excess of the sum of consideration transferred and the amount of any non-controlling interest over the net identifiable assets acquired and liabilities assumed.

23

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

IFRS 3 requires that one of the parties to the business combination be designated as the acquirer for accounting purposes. In making this assessment, factors such as the voting rights of the outstanding equity instruments, the corporate governance structure of the combined entity, the composition of senior management of the combined company and the relative size and net asset values of each of the companies are taken into consideration. No single factor is the sole determinant in the overall conclusion; all factors are considered in arriving at this conclusion.

xxvii. Non-controlling interest

Non-controlling interest is measured either at the fair value or at the non-controlling interests' proportionate share of the recognized amounts of the acquirer's identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction by transaction basis. Net earnings for the period that are attributable to non-controlling interest are calculated based on the ownership of the minority shareholders in the subsidiary.

xxviii. Share capital

The proceeds from the exercise of stock options or warrants together with amounts previously recorded over the vesting periods are recorded as share capital.

Share capital issued for non-monetary consideration is recorded at an amount based on fair market value of the shares on the date of issue.

The proceeds from the issue of units are allocated between common shares and common share purchase warrants on a pro-rata basis based on relative fair values as follows: the fair value of the common shares is based on the market close on the date the units are issued and the fair value of the common share purchase warrants is determined using the Black-Scholes Option Pricing Model.

Where any group company purchases the Company’s equity share capital, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

xxix. Share-based payments

The Company makes periodic grants of share-based awards to selected directors, officers, employees and others providing similar service under the Company’s share-based compensation plans.

Contributions to the Company’s employee share purchase plan (“ESPP”) are recorded on a payroll cycle basis as the Company’s obligation to contribute is incurred.

Pursuant to the Company’s stock option plan and Treasury Share Unit Plan ("TSUP"), the fair value of the equity-settled awards is determined at the date of the grant by using the Black-Scholes Option Pricing Model. At each reporting date prior to vesting, the cumulative expense representing the extent to which the vesting period has expired and management’s best estimate of the awards that are ultimately expected to vest is computed. The movement in cumulative expense is recognized in the consolidated statement of (loss) income with a corresponding entry within equity, against the reserve for equity settled share-based transactions. No expense is recognized for awards that do not ultimately vest.

24

Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

The Company has other share-based compensation plans in the form of Deferred Share Units (“DSUs”), Restricted Share Units (“RSUs”) and Performance Share Units (“PSUs”). Units granted under these share-based compensation plans are recorded at fair value on the grant date and are adjusted for changes in fair value each reporting period until settled. The expense, and any changes which arise from fluctuations in the fair value of the grants, is recognized in share-based compensation in the consolidated statement of (loss) income with the corresponding liability recorded on the consolidated statement of financial position in provisions.

xxx. Revenue recognition

Sales of metal concentrates and cathode are recognized and revenue is recorded at market prices following the transfer of control to the customer, provided that the Company has a present right to payment, has transferred physical possession of the asset to the customer, and the customer has the significant risks and rewards of ownership. Capstone satisfies its performance obligations upon delivery of the metal concentrates and cathode.

The Company’s metal concentrates are sold under a pricing arrangement where final prices are determined by quoted market prices in a period subsequent to the date of sale. Until prices are final, revenues are recorded based on forward commodity prices of metals for the expected period of final settlement. Subsequent variations in the final determination of the metal concentrate weight, assay and price are recognized as revenue adjustments as they occur until finalized. Pricing and volume adjustments, as well as refining and treatment charges, under the sales contracts are presented separately in the notes to the consolidated financial statements (Note 19).

The Company enters into copper time-spread swaps in order to manage the risk associated with final prices in terms of copper concentrate sales agreements. The associated gain/losses are recorded in Revenue in order to follow the nature of the transaction to which it is linked.

• xxxi. (Loss) earnings per share

Basic (loss) earnings per share is computed by dividing net (loss) income available (attributable) to common shareholders by the weighted average number of common shares outstanding during the period. The computation of diluted (loss) earnings per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on (loss) earnings per share.

The dilutive effect of convertible securities is reflected in diluted (loss) earnings per share by application of the "if converted" method. The dilutive effect of outstanding options and warrants and their equivalents is reflected in diluted (loss) earnings per share by application of the treasury stock method.

New IFRS Pronouncements

Issued and effective January 1, 2023

In February 2021, the IASB issued amendments to IAS 1, Presentation of Financial Statements and the IFRS Practice Statement 2 Making Materiality Judgements to provide guidance on the application of materiality judgments to accounting policy disclosures. The amendments to IAS 1 replace the requirement to disclose ‘significant’ accounting policies with a requirement to disclose ‘material’ accounting policies. Guidance and illustrative examples are added in the Practice Statement to assist in the application of materiality concepts when making judgments about accounting policy disclosures. The amendments are effective for annual periods beginning on or after January 1, 2023, with early adoption permitted. Prospective application is required on adoption. The Company assessed the impact of the amendment and determined it did not have a material effect on our annual financial statements.

4 Adoption of New and Revised IFRS and IFRS Not Yet Effective

25

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

In May 2021, the IASB issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction, which amended IAS 12 Income Taxes. The amendments became effective January 1, 2023. These amendments do not have an effect on the Company's financial statements as we currently follow the accounting treatment proposed by the amendments.

In May 2023, the IASB issued amendments to IAS 12, Income Taxes (IAS 12), to clarify the application of IAS 12 to income taxes arising from tax law enacted or substantively enacted related to the Pillar Two model rules published by the Organization for Economic Co-operation and Development (OECD).

The amendments require a mandatory temporary exception which prohibits the accounting for deferred taxes arising from tax law that implements the Pillar Two model rules. This amendment was effective immediately upon its release.

The Company performed an assessment and determined it would not be impacted by additional top-up taxes as a result of Pillar Two income taxes.

Issued but not yet effective

In January 2020 and October 2022, the IASB issued amendments to International Accounting Standards 1 ("IAS 1"), Presentation of Financial Statements, to clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Liabilities should be classified as non-current if a company has a substantive right to defer settlement for at least 12 months at the end of the reporting period. Rights are in existence if covenants are complied with at the end of the reporting period. Settlement refers to the transfer to the counterparty of cash, equity instruments, or other assets or services. In addition, the amendment required entities to disclose information to enable users of the financial statements to understand the risk that non-current liabilities with covenants could become repayable within twelve months. The amendments will be effective January 1, 2024, with early adoption permitted. Retrospective application is required on adoption. The Company is in the process of assessing the impact of this amendment on the Company's financial statements and does not expect it to have a significant effect on the Company's financial statements.

In May 2023, the IASB issued amendments to IAS 7, Statement of Cash Flows and IFRS 7, Financial Instruments Disclosures to provide guidance on disclosures related to supplier finance arrangements that enable users of financial statements to assess the effects of these arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk. The amendments are effective for annual periods beginning on or after January 1, 2024, with early adoption permitted. The Company is in the process of assessing the impact of the potential disclosure requirements of these amendments.

5. Business Combination Between Capstone and Mantos

Description of the Transaction

On March 23, 2022, Capstone Mining, from an accounting point of view, completed the acquisition of Mantos with the deemed issuance of 273,888,541 common shares with a fair value of $5.82 per share (the "Transaction Date").

Management has concluded that Mantos constitutes a business and, therefore, the acquisition is accounted for in accordance with IFRS 3 - Business Combinations. The Company began consolidating the operating results and net assets of Mantos from March 23, 2022 onwards.

The Company completed a full and detailed valuation of the fair value of the net assets of Mantos acquired using the income, market and cost valuation methods with the assistance of an independent third party. As at December 31, 2022, the Company finalized its full and detailed assessment of the fair value of net assets of Mantos acquired.

26

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Total transaction costs of $19.4 million were expensed during the year ended December 31, 2022.

Consideration and Purchase Price Allocation

Total consideration for the acquisition was valued at $1,593 million on the Transaction Date. The final purchase price allocated to the identifiable assets and liabilities based on their estimated fair values on the Transaction Date is summarized as follows:

Total Consideration

Total Consideration
273,888,541 shares deemed issued to Mantos' shareholders with a fair value of US$5.82	$	1,592,679
per share
Total consideration	$	1,592,679
		Final as reported
Allocation of Purchase Price	December 31, 2022
Cash and cash equivalents	$	219,211
Receivables		129,383
Inventories		111,602
Due from related party_(i)_		259,843
Mineral properties, plant and equipment		2,907,689
Other assets		27,663
Derivative assets		26,804
Accounts payable and accrued liabilities		(230,846)
Due to related party_(i)_		(259,843)
Income taxes payable		(9,983)
Long-term debt		(371,642)
Derivative liabilities		(155,386)
Lease liabilities		(78,146)
Deferred income tax liabilities		(484,678)
Provisions		(84,293)
Net assets acquired before non-controlling interest	$	2,007,378
Non-controllinginterest_(Note 12)_		(414,699)
Net assets acquired	$	1,592,679

i. The amounts previously due from a related party relates to a loan granted by Capstone Copper (previously Mantos Copper (Bermuda) Ltd.) to Orion Fund JV Limited, a shareholder of the Company. Amounts previously due to a related party relates to a loan granted by Orion Fund JV Ltd. to Mantos Copper Holding SpA. These amounts were settled during June 2022 via a non-cash assignment and offset agreement.

The Company used discounted cash flow models to determine the fair value of the depletable mining interests. The expected future cash flows are based on estimates of future copper prices, estimated quantities of ore reserves and mineral resources, expected future production costs and capital expenditures based on the life of mine plans at the Transaction Date. The discounted cash flow models used discount rates of 8.5% for Mantos Blancos and 9.25% for Mantoverde based on the Company's assessment of country risk, project risk and other potential risks specific to the acquired mining interests.

27

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

The significant assumptions used in the determination of the fair value of the mining interests were as follows:

	Mantoverde	Mantos Blancos
Short-term copper price	$3.85/lb	$3.85/lb
Long-term copper price	$3.50/lb	$3.50/lb
Discount rate	9.25%	8.50%
Mine life (years)	21	17
Average copper grade over life of mine	0.60%	0.69%
Average copper recovery rate	88.3%	83.6%

The Company used a market approach to determine the fair value of resource and exploration potential by comparing the costs of other precedent market transactions within the industry on a dollar per pound basis. Those amounts were used to determine the range of in-situ resource multiples implied within the value of transactions by other market participants. Management made a significant assumption in the determination of the fair value of resource and exploration potential by using an implied in-situ multiple of $0.032 for a total of $321.6 million at Mantoverde and $57.1 million at Mantos Blancos. The Company accounted for resource and exploration potential through inclusion within non-depletable mineral interest.

[6.] Financial Instruments

Fair value of financial instruments

Certain of the Company's financial assets and liabilities are measured at fair value on a recurring basis and classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain non-financial assets and liabilities may also be measured at fair value on a non-recurring basis. There are three levels of fair value hierarchy that prioritize the inputs to the valuation techniques used to measure fair value, with Level 1 having the highest priority. The levels and valuations techniques used to value the financial assets and liabilities are as follows:

Level 1 – Fair values measured using unadjusted quoted prices in active markets for identical instruments.

Short term investments and marketable securities are valued using quoted market prices in active markets. Accordingly, these items are included in Level 1 of the fair value hierarchy.

Level 2 – Fair values measured using directly or indirectly observable inputs, other than those included in Level 1.

Derivative instruments are included in Level 2 of the fair value hierarchy as they are valued using pricing models or discounted cash flow models. These models require a variety of inputs, including, but not limited to, market prices, forward price curves, yield curve and credit spreads. These inputs are obtained from or corroborated with the market. Also included in Level 2 are receivables from provisional pricing on copper concentrate and cathode sales because they are valued using quoted market prices derived based on forward curves for the respective commodities and published priced assessments.

Level 3 – Fair values measured using inputs that are not based on observable market data.

28

Notes to the Consolidated Financial Statements

Capstone Copper Corp.

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

As of December 31, 2023 the Company’s classification of financial instruments within the fair value hierarchy are summarized below:

		Level 1	Level 2	Level 3		Total
Financial assets
Short-term investments	$	804 $	— $		— $	804
Copper concentrate receivables(Note 7)		—	73,800		—	73,800
Copper cathode receivables(Note 7)		—	34,549		—	34,549
Derivative assets		—	35,549		—	35,549
Investment in marketable securities(Note
10)		824	—		—	824
	$	1,628 $	143,898 $		— $	145,526
Financial liabilities
Derivative liabilities	$	— $	16,788 $		— $	16,788
Gold stream liability		—	7,100		—	7,100
	$	— $	23,888 $		— $	23,888

As of December 31, 2022 the Company’s classification of financial instruments within the fair value hierarchy is summarized below:

summarized below:
		Level 1	Level 2	Level 3		Total
Short-term investments	$	1,553 $	— $		— $	1,553
Copper concentrate receivables_(Note 7)_		—	72,720		—	72,720
Copper cathode receivables_(Note 7)_		—	70,814		—	70,814
Derivative assets - current_(Note 10)_		—	48,563		—	48,563
Investment in marketable securities_(Note 10)_		1,628	—		—	1,628
	$	3,181 $	192,097 $		— $	195,278

The Company’s policy for determining when a transfer occurs between levels in the fair value hierarchy is to assess the impact at the date of the event or the change in circumstances that could result in a transfer. There were no transfers between Level 1, Level 2 and Level 3 during the year ended December 31, 2023.

Set out below are the Company’s financial assets by category:

	December 31, 2023
	Fair value through profit or loss Fair value through OCI Amortized cost Total
Cash and cash equivalents Short-term investments Copper concentrate receivables(Note 7) Copper cathode receivables(Note 7) Other receivables(Note 7) Derivative assets Investment in marketable securities(Note 10)	$ — $ — $ 126,016 $ 126,016 804 — — 804 73,800 — — 73,800 34,549 — — 34,549 — — 14,671 14,671 35,549 — — 35,549 — 824 — 824
	$ 144,702 $ 824 $ 140,687 $ 286,213

29

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

	December 31,2022
	Fair value through profit or loss Fair value through OCI Amortized cost Total
Cash and cash equivalents Short-term investments Copper concentrate receivables_(Note 7) Copper cathode receivables(Note 7) Other receivables(Note 7) Derivative assets Investment in marketable securities(Note 10)_ Other asset	$ — $ — $ 170,307 $ 170,307 1,553 — — 1,553 72,720 — — 72,720 70,814 — — 70,814 — — 11,763 11,763 48,563 — — 48,563 — 1,628 — 1,628 — — 5,000 5,000
	$ 193,650 $ 1,628 $ 187,070 $ 382,348

Set out below are the Company’s financial liabilities by category:

	December 31, 2023 Fair value through profit or loss Amortized cost Total $ — $ 272,277 $ 272,277 — 998,655 998,655 — 195,872 195,872 16,788 — 16,788 — 25,618 25,618 — 42,389 42,389 7,100 — 7,100 $ 23,888 $ 1,534,811 $ 1,558,699
Accounts payable and accrued liabilities Long-term debt(Note 14) Due to related party(Note 12) Derivative liabilities Working capital facility(Note 11) Payable on purchase of non-controlling interest(Note 11) Gold stream obligation(Note 11)

	December 31,2022
	Fair value through profit or loss Amortized cost Total
Accounts payable and accrued liabilities Long-term debt_(Note 14) Due to related party(Note 12) Derivative liabilities Payable onpurchase of non-controllinginterest (Note 11)_	$ — $ 284,913 $ 284,913 — 599,075 599,075 — 60,000 60,000 54,489 — 54,489 — 40,364 40,364
	$ 54,489 $ 984,352 $ 1,038,841

There have been no changes during the year ended December 31, 2023, in how the Company categorizes its financial assets and liabilities by fair value through profit or loss, fair value through OCI, and amortized cost.

At December 31, 2023 and 2022, the carrying amounts of accounts receivable not arising from sales of metal concentrates and cathodes, accounts payable and accrued liabilities, and other current assets and current liabilities are considered to be reasonable approximations of their fair values due to the short-term nature of these instruments. The fair value of the Company’s long-term debt is approximated by its carrying value since the contractual interest rates are comparable to current market interest rates.

30

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Derivative instruments

As at December 31, 2023, the Company’s derivative financial instruments are composed of copper commodity swap contracts, copper zero-cost collar contracts, interest rate swap contracts, foreign currency zero-cost collars ("ZCC"), forward and swap contracts and quotational pricing contracts.

The Company operates on an international basis and therefore, foreign exchange risk exposures arise from transactions denominated in a foreign currency. The Company's foreign exchange risk arises primarily with respect to the Chilean Peso ("CLP"), the Chilean Unidad de Fometo ("UF"), the Mexican Peso ("MXN") and the Canadian dollar ("CDN"). The UF is an artificial inflation-indexed monetary unit used in Chile to denominate certain contracts. The Company's cash flows from Chilean and Mexican operations are exposed to foreign exchange risk, as commodity sales are denominated in US dollars and a certain portion of operating and capital expenses is denominated in local currencies. As such, the group may use foreign exchange forward and swap contracts and ZCCs to mitigate changes in foreign exchange rates.

The Company's outstanding derivative instruments as of December 31, 2023, are as follows:

					Notional
				Call strike /	tonnes /
Type	Contract description	Remaining term	Put strike	Fixed rate	Quantity
	Fixed-for-Floating Swaps	January - June			12,263
Commodity (i)	Copper	2024	$—	$3.39/lb	tonnes
	Fixed-for-Floating Swaps	January - June			6,000
Commodity (ii)	Copper	2024	$—	$3.79/lb	tonnes
	ZCC - Call and Put Option	January - June	$3.55/lb	$4.22/lb	14,000
Commodity (ii)	Contracts - Copper	2024	$3.75/lb	$4.50/lb	tonnes
	Fixed-for-floating swaps	January 2024 -			$520 million
Interest rate (iii)	adjusted SOFR	March 2030	—	1.015%	USD
	Floor options	January 2024 -			$520 million
Interest rate (iii)	adjusted SOFR	September 2025	—	0%	USD
	Foreign Exchange Swaps	January - March			506 million
Foreign currency (iv)	- CLP	2024	—	727.70	CLP
	Foreign Exchange Swaps	January - May			0.1 million
Foreign currency (iv)	- UF	2024	—	41.70	UF
	Foreign exchange ZCC -	January -	825.00	922.50	123.4 billion
Foreign currency (v)	CLP	December 2024	835.00	955.00	CLP
	Foreign exchange ZCC -	January -			$10.0 million
Foreign currency (vi)	CAD	December 2024	1.35	1.39	CAD
Foreign currency	Foreign exchange ZCC -	January -	18.00	20.20	660 million
(vii)	MXN	December 2024	18.25	20.50	MXN
Quotational pricing	Copper time-spread	January -
contracts (viii)	swaps	February 2024	—	—	8,946 tonnes

i. As part of the Mantoverde Development Project ("MVDP") financing arrangements, Mantos was required to enter into a number of fixed-for-floating swaps to hedge LME copper prices. Under the agreements, a subsidiary of the Company has remaining hedges of 12,263 metric tonnes in the first half of 2024. At December 31, 2023, the fair value of these derivatives was $(13.1) million (December 31, 2022 - $(26.0) million).

31

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

• ii. In April 2023, the company entered into fixed-for-floating swaps for 6,000 metric tonnes for the first half of 2024 at average price of $3.79/lb. The Company also entered into zero cost collar ("ZCC") contracts whereby it sold a series of call option contracts ($4.22/lb to $4.50/lb) and purchased a series of put option contracts ($3.55.lb to $3.75/lb) for $nil cash premium consisting of 14,000 metric tonnes in the first half of 2024. At December 31, 2023, the fair value of these derivatives was $(0.4) million (December 31, 2022 - $(16.9) million).

• iii. To mitigate the risk of movements in interest rates, and in compliance with a covenant in the MVDP financing, a subsidiary of the Company entered into a fixed-for-floating SOFR swap at 1.015% with floating rate of daily SOFR, compounded to a quarterly rate, plus 0.2616% adjustment, until March 2030, with a 0% floor on the adjusted SOFR rate until September 2025. The fixed for floating swap notional represents the notional amount as of the reporting period. The derivative instruments are a series of quarterly contracts, with notional amounts in line with planned quarterly balances based on expected project finance debt drawdown and expected amortization. At December 31, 2023, the fair value of the fixed-for-floating swaps and floor option derivative contracts was $33.4 million (December 31, 2022 - $48.3 million).

• iv. As a covenant in the MVDP financing, a subsidiary of the Company, entered into foreign exchange forward and swap contracts in February 2021 to hedge the foreign exchange risk related to the capital expenditures for the MVDP. As at December 31, 2023, the fair value of the outstanding CLP and UF contracts was $(0.1) million (December 31, 2022 - $(1.6) million).

• v. During the year ended December 31, 2023, the Company entered into ZCCs CLP to US dollar foreign exchange option contracts covering the period from January 2024 through December 2024, representing approximately 75% of Mantoverde's and Mantos Blancos' expected CLP operating costs during the period. At December 31, 2023, the fair value of the outstanding CLP contracts was $(1.4) million (December 31, 2022 - $0.5) million).

• vi. In October 2023, the Company entered into CAD zero cost collars to US dollar foreign exchange option contracts covering the period from January through December 2024, representing approximately 50% of the expected CAD general and administrative costs during this period. At December 31, 2023, the fair value of the outstanding CAD contracts was $0.2 million (December 31, 2022 - $0.2 million).

• vii. In October 2023, the Company entered into MXN zero cost collars to US dollar foreign exchange option contracts covering the period from January 2024 through December 2024, representing approximately 75% of the expected MXN operating costs during this period. At December 31, 2023, the fair value of the outstanding MXN contracts was $1.9 million (December 31, 2022 - $nil).

• viii. The Company enters into copper time-spread swaps in order to manage the risk associated with provisional pricing terms in copper concentrate sales agreements. As at December 31, 2023, the Company had 8,946 metric tonnes of copper swaps outstanding at an effective average benefit of $30.71 per tonne and settling across January to February 2024. At December 31, 2023, the fair value of the outstanding contracts was $(1.8) million (December 31, 2022 - $(9.5) million).

32

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Set out below are the Company’s derivative financial assets and financial liabilities:

	December	31, 2023	December	31,2022
Derivative financial assets:
Foreign currency contracts	$	2,139	$	247
Interest rate swapcontracts		16,845		19,734
Total derivative financial assets - current		18,984		19,981
Interest rate swapcontracts		16,565		28,582
Total derivative financial assets - non-current	$	16,565	$	28,582
Derivative financial liabilities:
Foreign currency contracts		1,503		2,073
Copper commodity contracts		13,484		32,888
Quotationalpricingcontracts		1,801		9,462
Total derivative financial liabilities - current	$	16,788	$	44,423
Foreign currency contracts		—		46
Copper commoditycontracts		—		10,020
Total derivative financial liabilities - non-current	$	—	$	10,066

Set out below are the Company’s realized and unrealized gains and losses on derivative financial instruments:

		Year ended December 31,	Year ended December 31,
		2023	2022
Unrealized gain (loss) on derivative financial instruments:
Foreign currency contracts	$	2,505$	9,998
Copper commodity contracts		29,425	100,834
Interest rate swap contracts		(14,820)	22,725
Unrealized loss on warrants		—	(387)
Total unrealized (loss) gain on derivative financial instruments		17,110	133,170
Realized gain (loss) on derivative financial instruments:
Foreign currency contracts		243	(24,881)
Copper commodity contracts		(35,869)	(1,384)
Interest rate swapcontracts		21,591	4,182
Total realizedgain(loss)on derivative financial instruments		**(14,035) **	(22,083)
Total unrealized and realized gain on derivative financial
instruments:	$	3,075$	111,087

* Amounts above do not include unrealized and realized gains and losses related to the Company's quotational pricing contracts as these amounts are included in pricing and volume adjustments on copper concentrate sales (Note 19).

Valuation methodologies for Level 2 financial instruments

The key inputs to the valuation of the concentrate receivable balance are payable metal and future metal prices. The Company’s metal concentrate sales contracts are subject to provisional pricing with the selling price adjusted at the end of the quotational period based on final settlement weights and assays. At each reporting date, the Company’s accounts receivable on these contracts are marked-to-market based on a quoted forward price for which there exists an active commodity market.

33

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Derivative assets and liabilities consist of the mark-to-market adjustments to record the fair values of the outstanding zero cost collar and forward foreign currency contracts, commodity swaps, interest rate swaps quotational pricing contracts. At December 31, 2023 derivative assets consist of zero cost collar and forward foreign currency contracts and interest rate swap contracts. Derivative liabilities consist of zero cost collar foreign currency contracts, copper commodity contracts and quotational pricing contracts. All of the Company’s derivative assets and liabilities are marked-to-market based on a valuation model which uses quoted observable inputs.

Commodity price risk

The Company is exposed to commodity price risk since its revenues are derived from the sale of metals, the prices for which have been historically volatile. The Company sometimes manages this risk by entering into forward sale or commodity swap derivative agreements with various counterparties to mitigate price risk when management believes it a prudent decision.

Credit risk

The Company is exposed to credit risk through its trade receivables on concentrate sales with various counterparties under the terms of off-take agreements. The Company manages this risk by requiring provisional payments of at least 90 percent of the value of the concentrate shipped. Value added taxes receivable are not considered to be subject to significant credit risk as these balances are receivable from government authorities.

The credit risk on cash and cash equivalents is limited because the funds are held with banks with high credit ratings as assigned by international credit rating agencies. Similarly, the credit risk on the short-term investments is limited as the investments are in highly liquid, bankruptcy-remote, AAA rated money market funds, and exchange traded funds.

As at December 31, 2023, the Company’s maximum exposure to credit risk is the carrying value of its cash and cash equivalents, short-term investments, receivables, derivative assets and investment in marketable securities.

Foreign exchange risk

The Company is exposed to foreign exchange risk as the Company’s operating costs will be primarily in US dollars, Canadian dollars (“C$”), Mexican pesos and Chilean pesos, while revenues are received in US dollars. Hence, any fluctuation of the US dollar in relation to these currencies may affect the profitability of the Company and the value of the Company’s assets and liabilities. From time to time, the Company enters into foreign exchange hedging arrangements to mitigate the risk of exposure to fluctuating foreign currency exchange rates.

As at December 31, 2023, the Company is exposed to foreign exchange risk through the following financial assets and liabilities denominated in currencies other than the functional currency of the applicable subsidiary:

		Canadian dollar	Mexicanpeso	Chileanpeso
Cash	$	798 $	551 $	30,006
Receivables and other current assets		856	2,514	26,594
Deposits and other long-term assets		98	125	95
Total assets		1,752	3,190	56,695
Accountspayable and accrued liabilities		8,365	9,765	51,849
Total liabilities		8,365	9,765	51,849
Net(liabilities)assets	$	(6,613) $	(6,575) $	4,846

The following sensitivity analysis for foreign currency risk relates solely to financial assets and liabilities that were outstanding at December 31, 2023 and each sensitivity calculation assumes all other variables are held constant.

34

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

The analysis does not reflect the overall effect that changes in market variables would have on the Company's results.

Based on the above net exposures at December 31, 2023, a 10% appreciation in the Canadian dollar against the US dollar would result in a $0.7 million increase in the Company’s loss before taxes. A 10% appreciation of the Mexican peso against the US dollar would result in a $0.7 million increase in the Company’s loss before taxes. A 10% appreciation of the Chilean peso against the US dollar would result in a $0.5 million decrease in the Company’s loss before taxes.

Liquidity risk

The Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company maintains adequate cash balances and credit facilities to meet short and long-term business requirements, after taking into account cash flows from operations and believes that these sources will be sufficient to cover the likely short and long-term cash requirements. The Company’s cash is held in business accounts with Canadian Tier 1 or international banks with a S&P Global Rating rating of A- or better. The cash is available on demand for the Company’s programs. In addition, the Company’s short-term investments are highly liquid and are readily convertible to cash.

As of December 31, 2023, the Company’s liabilities that have contractual maturities are as follows:

		Total	2024	2025	2026	2027	After 2027	After 2027
Accounts payable and accrued
liabilities_(i)_	$	272,277 $ 272,277 $		— $	— $	—	$	—
Long term debt_(ii)_	$	994,000	28,398	85,748	88,640	504,353		286,861
Due to related party_(Note 12)_	$	60,000	3,243	6,486	6,486	6,486		37,299
Working capital facility_(Note 11)_	$	25,618	25,618	—	—	—		—
Leases and other contracts	$	127,715	35,746	25,147	20,507	15,861		30,454
Water supplycontracts_(Note 24)_	$	201,342	20,620	22,160	22,631	18,516		117,415
	$	1,680,952 $ 385,902 $		139,541 $	138,264 $	545,216	$	472,029

i. Amounts above do not include payments related to the Company's reclamation and closure cost obligations, other long- term provisions (Note 17) and other liabilities without contractual maturities.

ii. Excluding deferred financing costs and purchase price accounting fair value adjustments

Interest rate risk

The Company’s long-term debt is based on variable interest rates. Variable interest rates are currently based on US dollar SOFR plus a variable margin. From time to time, the Company has entered into derivative contracts to manage this risk. Based on the utilized Mantoverde Development Project Facility, Cost Overrun Facility, Due to Related Party and Revolving Credit Facility and balances of $520.0 million, $60.0 million, $129.9 million and $474.0 million at December 31, 2023, respectively, a 0.1% increase in the SOFR rates would result in a $0.7 million increase in annual net loss before taxes . The Company is also exposed to interest rate risk with respect to the interest it earns on its cash balances and short-term investments. A 0.1% change in interest rates would have a nominal effect on the Company’s interest income.

35

Notes to the Consolidated Financial Statements

Capstone Copper Corp.

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

7. Receivables

Details are as follows:

Details are as follows:
	December	31, 2023	December	31,2022
Copper cathode	$	34,549	$	70,814
Copper concentrate		73,800		72,720
Value added taxes and other taxes receivable		16,345		31,535
Income taxes receivable		7,953		5,055
Other		14,671		11,763
Total receivables	$	147,318	$	191,887

8. Inventories

Details are as follows:

	December	31, 2023	December	31,2022
Current:
Materials and consumables	$	82,478	$	68,121
Ore stockpiles		14,003		10,596
Work-in-progress		21,477		29,386
Finished goods - copper cathode		16,400		19,057
Finishedgoods - copper concentrate		15,255		13,637
Total inventories - current	$	149,613	$	140,797
Non-current:
Ore stockpiles (Note 10) (i)		8,474		2,700
Total inventories - non-current	$	8,474	$	2,700

i. Non-current inventory is comprised of ore stockpiles at the Mantos Blancos mine.

During the year ended December 31, 2023, concentrate and cathode inventories recognized as production costs, including depletion and amortization, amounted to $1,251.3 million (2022 – $1,078.1 million).

During the year ended December 31, 2023, the Company recorded write-downs of $1.9 million related to Mantoverde's cathode inventories and Pinto Valley's supplies inventories which were recorded as production costs.

During the year ended December 31, 2022, the Company recorded write-downs of $2.8 million related to Mantoverde's cathode inventories and Pinto Valley's ore stockpile and supplies inventories, which were recorded as production costs.

36

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

9. Mineral Properties, Plant and Equipment

Details are as follows:

Details are as follows:
		Mineralproperties
	Depletable Non- depletable Subject to amortization Producing mineral properties Deferred stripping Mineral exploration and development properties Plant & equipment Right of use assets
At January 1, 2023, net Additions Disposals Rehabilitation provision adjustments_(Note 17)_ Reclassifications Depletion and amortization	$ 1,709,157 $ 137,563 $ 819,225 $ 1,052,252 $ 91,743 $ 896,371 $ 4,706,311 10,222 218,379 45,001 6,185 72,976 468,224 820,987 — — (19) (300) — (345) (664) 6,741 — — — — — 6,741 36,427 9,076 (26,395) 189,664 (16,060) (192,712) — (89,820) (57,337) — (85,398) (14,563) — (247,118)
At December 31, 2023, net	$ 1,672,727 $ 307,681 $ 837,812 $ 1,162,403 $ 134,096 $ 1,171,538 $ 5,286,257
At December 31, 2023: Cost Accumulated amortization and impairment	$ 2,182,946 $ 469,961 $ 837,812 $ 2,881,315 $ 246,775 $ 1,171,538 $ 7,790,347 (510,219) (162,280) —(1,718,912) (112,679) —(2,504,090)
Net carrying amount	$ 1,672,727 $ 307,681 $ 837,812 $ 1,162,403 $ 134,096 $ 1,171,538 $ 5,286,257

During the year ended December 31, 2023, the Company capitalized $72.2 million (2022 - $23.4 million) of finance costs to Construction in Progress, at a weighted average interest rate of 7.8%.

During the year ended December 31, 2023, the Company capitalized $218.4 million (2022 - $80.4 million) of stripping costs to deferred stripping and depletable mineral properties. During the year ended December 31, 2023, the Company capitalized $9.1 million (2022 - $nil) of pre-stripping costs to Construction in Progress related to MVDP.

37

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

		Mineralproperties
At January 1, 2022, net Business combination with Mantos (Note 5) Additions Disposals Rehabilitation provision adjustments_(Note 17)_ Reclassifications Depletion and amortization	$ 413,573 $ 89,245 $ 411,154 $ 293,938 $ 14,622 $ 88,338 $ 1,310,870 1,264,631 — 378,856 496,931 71,821 695,450 2,907,689 67,711 80,406 53,251 3,512 37,996 428,595 671,471 — — (135) (30) — — (165) 13,955 — — — — — 13,955 23,943 — (23,901) 325,156 (9,186) (316,012) — (74,656) (32,088) — (67,255) (23,510) — (197,509)
At December 31, 2022, net	$ 1,709,157 $ 137,563 $ 819,225 $ 1,052,252 $ 91,743 $ 896,371 $ 4,706,311
At December 31, 2022: Cost Accumulated amortization and impairment Net carryingamount	$ 2,130,178 $ 247,491 $ 819,225 $ 2,665,873 $ 186,355 $ 896,371 $ 6,945,493 (421,021) (109,928) — (1,613,621) (94,612) — (2,239,182)
	$ 1,709,157 $ 137,563 $ 819,225 $ 1,052,252 $ 91,743 $ 896,371 $ 4,706,311

The Company’s exploration costs were as follows:

The Company’s exploration costs were as follows:
		Year ended December 31,
		2023	2022
Exploration capitalized to mineral properties	$	2,400$	3,278
Greenfield exploration expensed to the statement of(loss)income		4,961	9,578
	$	7,361$	12,856

Exploration capitalized to mineral properties during the year ended December 31, 2023 and 2022, relates to brownfield exploration at the Cozamin mine. Greenfield exploration expenses during the year ended December 31, 2023 and 2022 related primarily to exploration efforts in the US and Brazil.

As at December 31, 2023, construction in progress primarily relates to capital costs incurred in connection with the MVDP, expansionary and sustaining capital at the Mantos Blancos, Pinto Valley and Cozamin mines and the development at the Santo Domingo project. Capital expenditures committed as at December 31, 2023, but not yet incurred, is $32.9 million (December 31, 2022 - $265.9 million).

As at December 31, 2023, the Revolving Credit Facility ("RCF") (Note 14) was secured by the Pinto Valley, Cozamin and Mantos Blancos mineral properties, and plant and equipment with a net carrying value of $2,027.0 million (December 31, 2022 – $1,934.7 million).

38

Notes to the Consolidated Financial Statements

Capstone Copper Corp.

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

10. Other Assets

Details are as follows:

Details are as follows:
	December	31, 2023	December	31,2022
Current:
Prepaids	$	36,612	$	37,926
Deposits		4,710		4,500
Other		2,800		2,540
Total other assets - current	$	44,122	$	44,966
Non-current:
Prepayments		18,045		18,045
Ore stockpiles_(Note 8)_		8,474		2,700
Investments in marketable securities		824		1,628
Finance lease receivable		—		431
Deposits		390		8,177
Other		3,102		6,839
Total other assets - non-current	$	30,835	$	37,820

11. Other Liabilities

Details are as follows:

Details are as follows:
	December	31, 2023	December	31,2022
Current:
Current portion of share-based payment obligations (Note 17)	$	8,455	$	30,497
Current portion of deferred revenue_(Note 15)_		12,139		8,524
Current portion of Minto obligation_(Note 17)_		23,943		—
Working capital facility		25,618		—
Other		1,257		301
Total other liabilities - current	$	71,412	$	39,322
Non-current:
Retirement benefit liabilities	$	13,036	$	6,411
Non-current portion of payable on purchase of NCI		42,389		40,364
Gold stream obligation (Note 25)		7,100		—
Other		1,603		3,953
Total other liabilities - non-current	$	64,128	$	50,728

Working Capital Facility

During the year ended December 31, 2023, one of the Company's Chilean subsidiaries entered into a series of three-month facilities with a fixed interest rate of 6.41% for the purposes of working capital management. As at December 31, 2023, the balance of the facility was $25.6 million, including interest of $0.6 million.

39

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Payable on purchase of NCI

On March 24, 2021, Capstone Mining completed a Share Purchase Agreement (the “SPA”) with Korea Resources Corporation (“KORES”) to purchase KORES’ 30% ownership interest in Acquisition Co. for cash consideration of $120 million and non-cash consideration of $32.4 million, enabling the Company's consolidation of 100% ownership in Santo Domingo.

As at December 31, 2023, an unsecured liability of $42.4 million (December 31, 2022 - $40.4 million) has been recognized in the consolidated statement of financial position equal to the discounted amount of the remaining $45 million of cash consideration to be paid to KORES on March 24, 2025. The discounted amount of the remaining $45 million will be accreted up to its face value at 5% per annum. During the year ended December 31, 2023, $2.0 million (December 31, 2022 - $3.5 million) of accretion was recorded in accretion expense in the consolidated statements of (loss) income.

Gold stream obligation

During the fourth quarter of 2023, the Company recognized an obligation related to a completion test on the Santo Domingo gold stream. The fair value of the embedded derivative at December 31, 2023, was a liability of $7.1 million (December 31, 2022 - nil).

12. Non-Controlling Interest

Mitsubishi Materials Corporation ("MMC")

As part of the financing for the MVDP, MMC acquired a 30% non-controlling interest in Mantoverde S.A., and agreed to make an additional $20 million contingent payment upon satisfaction of certain technical requirements relating to the expansion of the tailings storage facility.

In addition to the contingent arrangement, MMC agreed to provide a $60 million Cost Overrun Facility ("COF") in exchange for additional off-take of copper concentrate production under a 10-year contract (Note 24). The COF initially carried an interest rate of 3-month US$ LIBOR plus 1.70% and amortizing over 37 quarters from the earlier of September 30, 2024 or three quarters after project completion. As at December 31, 2023, the COF was fully drawn. As a result of Interest Rate Benchmark Reform, the Company completed the transition from LIBOR to an adjusted SOFR with MMC. The transition resulted in a variable rate of SOFR compounded daily to a 3-month period plus 0.2616% per annum, with margins unchanged.

In addition to the COF, MMC advanced their pro-rata share which amounted to an additional $129.9 million to Mantoverde in the form of a shareholder loan forming part of the financing for the MVDP. Total funds advanced by MMC at December 31, 2023, including accrued interest of $6.0 million (2022 - $nil), was $195.9 million (December 31, 2022 - $60 million).

Details of the due to related party balances are as follows:

	December	31, 2023	December	31,2022
Total balance	$	195,871	$	60,000
Less: currentportion		**(3,243) **		—
Non-currentportion	$	192,628	$	60,000

40

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

The table below presents a condensed summary of the financial information for Mantoverde S.A. shown on a 100% basis:

	December 31, 2023 December 31,2022
Cash and cash equivalents Mineral properties, plant and equipment Other assets Total assets Accounts payable and accrued liabilities Long-term debt Amounts due to related parties Deferred income tax liabilities Other liabilities Total liabilities	77,947 $ 102,746 2,803,818 2,352,804 137,139 175,871
	3,018,904 2,631,421
	97,362 138,743 526,579 527,498 1,031,078 507,267 389,741 395,030 152,952 91,637
	2,197,712 1,660,175
	Year ended December 31, 2023 2022
Net Revenue Production costs Depletion and amortization Loss from mining operations Realized and unrealized gain on derivative instruments Income tax and other expense Net (loss) income (Loss) profit attributable to owners of Mantoverde SA (Loss) profit attributable to the non-controlling interest (Loss) profit for the period Share of comprehensive (loss) profit for the period Opening balance Business combination with Mantos_(Note 5)_ Share of comprehensive (loss) profit for the period Non-controlling interest	$ 286,073$ 315,428 (304,087) (317,041) (59,473) (35,369)
	(77,487) (36,982) 2,717 109,468 (2,076) (26,021)
	(76,846) 46,465
	(53,792) 32,525 (23,054) 13,940
	$ (76,846) $ 46,465
	(23,104) 13,940
	$ 428,639$ — — 414,699 (23,104) 13,940
	$ 405,535$ 428,639

41

Notes to the Consolidated Financial Statements

Capstone Copper Corp.

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

13. Lease Liabilities

Details are as follows:

Details are as follows:
		Total
Balance, December 31, 2021	$	16,041
Business combination with Mantos_(Note 5)_		78,146
Additions		33,649
Payments		(29,437)
Accretion expense		5,446
Foreign currencytranslation adjustment		52
Balance, December 31, 2022	$	103,897
Additions		69,497
Payments		(42,727)
Reclassifications_(i)_		(3,300)
Accretion expense		8,679
Foreign currencytranslation adjustment		453
Balance, December 31, 2023	$	136,499
Less: currentportion		(33,516)
Non-currentportion	$	102,983

i. Relates to an advance payment made during the year ended December 31, 2022, reclassified against the lease liability.

14. Long-Term Debt

Details of the long-term debt balances are as follows:

	December	31, 2023	December	31,2022
Mantoverde Development Project Facility	$	526,579	$	527,498
RevolvingCredit Facility		472,077		71,577
Total balance		998,656		599,075
Less: currentportion		**(28,398) **		—
Non-currentportion	$	970,258	$	599,075

Mantoverde Development Project Facility

In order to fund the construction of MVDP, the Company secured a senior secured amortizing project debt facility in an aggregate amount of $520 million (the "MVDP Facility", comprising the “Covered Facility” $250 million, the “Uncovered Facility” $210 million, and the “ECA Direct Facility” $60 million). These project finance facilities are subject to affirmative, financial and restrictive covenants that include obligations to maintain the security interests in favour of the lenders over substantially all of the Mantoverde assets, insurance coverage, maintenance of offtake agreements, environmental and social compliance, restrictions on new financial indebtedness, distributions and dispositions, and compliance with certain financial ratios. As at December 31, 2023, the Company was in compliance with these covenants.

At December 31, 2023, $520 million was drawn on the MVDP Facility with $6.6 million recognized as an adjustment to record the debt at its fair value as required as part of the accounting for the business combination with Mantos (December 31, 2022 - $520 million and $7.5 million). This fair value adjustment amortizes down to its historical cost over the duration of the MVDP Facility.

42

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

As a condition to the MVDP Facility, the Company was required to effect certain hedging strategies as detailed in the lending agreement. The agreement indicates that the Company must implement hedging programs related to copper prices, foreign exchange rates and interest rates during the financing period. The Company has complied with all obligations related to the lending agreement and the MVDP Facility.

Interest on borrowings under the MVDP Facility is payable quarterly. As a result of Interest Rate Benchmark Reform, the Company has completed the transition from LIBOR to an adjusted SOFR for its MVDP debt financing facility. The transition resulted in a variable rate of SOFR compounded daily to a 3-month period plus 0.2616% per annum, with margins unchanged (i.e., 1.65% for the Covered Facility and, with respect to the Uncovered Facility, a rate of 3.75% and with respect to the ECA Direct Facility, a rate of 4.00% pre-completion of the MVDP, and decreasing to 3.50% and 3.75% respectively post-completion of the MVDP). Pursuant to the Covered Facility, an export credit agency guaranteed premium of 2.05% per annum is also payable quarterly and calculated over amounts outstanding under the Covered Facility. The MVDP Facility is secured by a comprehensive security package covering substantially all of the Mantoverde assets. The MVDP Facility amortizes from the earlier of September 30, 2024 and 180 days after project completion until December 2030 for the Uncovered Facility and December 2032 for the Covered Facility and ECA Direct Facility.

To mitigate the risk of movements in interest rates, and in compliance with a covenant in the MVDP Facility, a subsidiary of the Company entered into a fixed-for-floating SOFR swap at 1.015% with floating rate of daily SOFR, compounded to a quarterly rate, plus 0.2616% adjustment. The fixed-for-floating swap notional represents the notional amount as of the reporting period. The derivative instruments are a series of quarterly contracts, with notional amounts in line with planned quarterly balances based on expected project finance debt drawdown and expected amortization.

Revolving Credit Facility

On September 22, 2023, Capstone amended its RCF to increase the aggregate commitments from $600 million to $700 million and extended the maturity from May 2026 to September 2027. The Amended RCF bears interest on a sliding scale of adjusted term SOFR plus a margin of 2.000% to 2.875%. This amendment was treated as an extinguishment of the previous debt facility, resulting in $2.7 million of deferred financing fees being written off during the year ended December 31, 2023.

The interest rate at December 31, 2023 was one-month adjusted term SOFR of 5.46% plus 2.125% (2022 - adjusted term SOFR of 4.83% plus 1.88%) with a standby fee of 0.48% (2022 – 0.42%) payable on the undrawn balance (adjustable in certain circumstances).

The RCF is secured against the present and future real and personal property, assets and undertakings of Capstone Copper other than defined excluded entities which comprise the Mantoverde mine property and the Santo Domingo development property.

The RCF requires Capstone to maintain certain financial ratios relating to debt and interest coverage. Capstone was in compliance with these covenants as at December 31, 2023.

Details of the balance are as follows:

Details of the balance are as follows:
	December	31, 2023	December	31,2022
Balance drawn on the RCF	$	474,000	$	75,000
Deferred financingfees		**(1,923) **		(3,423)
Total RCF balance	$	472,077	$	71,577

43

Capstone Copper Corp. Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Surety Bonds

As at December 31, 2023, the Company has in place seven surety bonds totaling $236.3 million to support various reclamation and other obligation bonding requirements. These comprise $172.7 million securing reclamation obligations at Pinto Valley, $4.0 million provided as security as part of a power supply agreement at Pinto Valley, $1.9 million related to the construction of a port for the Santo Domingo development project in Chile, $25.9 million at Mantoverde, and $31.7 million at Mantos Blancos, respectively, securing reclamation obligations. The Company is also an Indemnitor to the surety bond provider for the surety bond obligations of Minto Metals Corp. ("Minto Metals") ( Note 17 ).

15. Deferred Revenue

Silver Precious Metals Purchase Arrangement ("Silver PMPA")

On February 19, 2021, Capstone Mining concluded the Silver PMPA with Wheaton Precious Metals ("Wheaton") whereby Capstone received an upfront cash consideration of $150 million against delivery of 50% of the silver production from the Cozamin mine until 10 million ounces have been delivered, thereafter dropping to 33% of silver production for the remaining life of mine. In addition to the upfront cash consideration of $150 million, as silver is delivered under the terms of the Silver PMPA, the Company receives cash payments equal to 10% of the spot silver price at the time of delivery for each ounce delivered to Wheaton. The Silver PMPA is effective December 1, 2020. Wheaton has been provided certain security in support of the Company’s obligations under the Silver PMPA.

The Company recorded the upfront cash consideration received of $150 million as deferred revenue and recognizes amounts in revenue as silver is delivered under the Silver PMPA. Capstone determines the amortization of deferred revenue to the consolidated statements of (loss) income on a per unit basis using the estimated total number of silver ounces expected to be delivered over the life of the Cozamin mine. The amortization rate requires the use of proven and probable mineral reserves and certain mineral resources which management is reasonably confident will be transferred to mineral reserves. The Company estimates the current portion of deferred revenue based on deliveries anticipated over the next twelve months. During the year ended December 31, 2023, the Company delivered 572,312 ounces (2022 - 593,062 ounces) of silver to Wheaton under the Silver PMPA.

The agreement with Wheaton includes a completion test which requires the completion of the paste backfill plant by December 31, 2023, and production of at least 105,000 cubic meters of suitable past backfill for use in the underground operations at Cozamin over a consecutive 90-day period. Failure to achieve the completion requirements will result in a refund being owed to Wheaton up to a maximum amount of $13 million based on the ratio of paste backfill that was used in the underground operations compared to the target of 105,000 tonnes.

Gold Precious Metals Purchase Arrangement ("Gold PMPA")

On April 21, 2021, Capstone Mining received an early deposit of $30 million ("the Early Deposit") in relation to the Gold PMPA with Wheaton effective March 24, 2021. If completion has not been achieved on or before the third anniversary date of receiving the early deposit, and early deposit delay payment will be triggered that would require the company to sell and deliver 104 ounces of refined gold per month until the earlier of: the month completion is achieved, the month in which the early deposit is repaid to Wheaton or the month which refined gold is first required to be sold and delivery to Wheaton. Additional deposits of $260 million are to be received under the Gold PMPA over the Santo Domingo construction period, subject to sufficient financing having been obtained to cover total expected capital expenditures and other customary conditions, for total consideration of $290 million (collectively "the Deposit"). Wheaton will receive 100% of the gold production from the Company's Santo Domingo development project until 285,000 ounces have been delivered, thereafter dropping to 67% of the gold production for the remaining life of mine.

44

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

In addition to the deposits of $290 million, as gold is delivered under the terms of the Gold PMPA, Capstone receives cash payments equal to 18% of the spot gold price at the time of delivery for each ounce delivered to Wheaton, until the Deposit has been reduced to zero, thereafter increasing to 22% of the spot gold price upon delivery. Wheaton has been provided certain security in support of the Company’s obligations under the Gold PMPA. The initial term of the Gold PMPA is 20 years.

Details of changes in the balance of deferred revenue are as follows:

		Silver PMPA	Gold PMPA	Total
Balance, December 31, 2021	$	140,510 $	31,360 $	171,870
Accretion expense		7,869	2,132	10,001
Recognized as revenue on deliveryof silver		(12,885)	—	(12,885)
Balance, December 31, 2022	$	135,494 $	33,492 $	168,986
Accretion expense		7,528	2,277	9,805
Recognized as revenue on delivery of silver		(13,707)	—	(13,707)
Variable consideration adjustment		(5,326)	—	(5,326)
Balance, December 31, 2023	$	123,989 $	35,769 $	159,758
Less: currentportion(Note 11)		(12,139)	—	(12,139)
Non-currentportion	$	111,850 $	35,769 $	147,619

Consideration from the PMPAs is considered variable, as silver and gold stream revenues can be subject to cumulative adjustments when the number of ounces to be delivered under the contracts change, when there is an increase in the Company’s mineral reserve and resource estimates or when there are changes to the mine plans.

As a result of changes in the Cozamin mine's projected production, the amortization rate by which deferred revenue is drawn down into income was adjusted and, as required, a current period catch up adjustment is made for all prior period stream revenues since the stream agreement inception date. This variable consideration adjustment resulted in an increase in revenue of $5.3 million for the year ended December 31, 2023 (2022 - $nil).

16. Income Taxes

Details of the income tax (recovery) expense are as follows:

	Year ended December 31, 2023
	Canada US Mexico Chile Other Total
Current income and mining tax expense Deferred income tax (recovery) expense	$ — $ 1,103 $ 10,692 $ 1,791 $ 469 $ 14,055 (14,698) 2,221 15,876 16,269 — 19,668
Income tax (recovery) expense	$ (14,698) $ 3,324 $ 26,568 $ 18,060 $ 469 $ 33,723
	Year ended December 31,2022
	Canada US Mexico Chile Other Total
Current income and mining tax expense Deferred income tax (recovery) expense	$ — $ 2,168 $ 41,357 $ 2,178 $ 6 $ 45,709 (7,849) 2,311 (3,615) 21,026 — 11,873
Income tax (recovery) expense	$ (7,849)$ 4,479 $ 37,742 $ 23,204 $ 6 $ 57,582

45

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes. These differences result from the following items:

		Year ended December 31,	Year ended December 31,	Year ended December 31,
		2023		2022
(Loss) income before income taxes	$	(91,003)	$	193,721
Canadian federal andprovincial income tax rates		27.00 %		27.00 %
Income tax (recovery) expense based on the above rates		(24,571)		52,305
Increase (decrease) due to:
Adoption of Chilean Mining Royalty legislation		31,367		—
Non-deductible expenditures		6,118		3,994
Effects of different statutory tax rates on losses of subsidiaries		3,190		1,258
Mexican and Chilean mining royalty taxes		1,434		6,173
Current period losses for which deferred tax assets (were) were not
recognized		13,486		(177)
Adjustments to tax estimates in prior years		4,708		554
Foreign exchange and other translation adjustments		(5,757)		(2,449)
Impact of Mexican inflation		(234)		(1,482)
Other		3,982		(2,594)
Income tax expense	$	33,723	$	57,582
Current income and mining tax expense	$	14,055	$	45,710
Deferred income tax expense		19,668		11,872
Income tax expense	$	33,723	$	57,582

During the third quarter, Chile passed the new Mining Royalty into law with effect from January 1, 2024. The new Mining Royalty Law contains two components, an ad-valorem and a mine operating margin component. The advalorem component is applicable to companies with annual sales of copper that are higher than the equivalent of 50,000 metric tonnes of fine copper ("MTFC"). If the company's "Adjusted Mining Operational Taxable Income", or "RIOMA' as it is referred to in Chile, is negative, the ad-valorem component to be paid will be calculated by subtracting the negative amount of the RIOMA from the ad-valorem component. The ad-valorem component of the Mining Royalty will be deductible when determining First Category, or corporate, income taxes, however, not for purposes of determining RIOMA. The ad-valorem component is capped at 1% of gross copper venues.

The mine operating margin ("MOM") component will vary depending on the sales volume of the company, along with whether more than 50% of its annual production is copper. Mining companies which derive more than 50% of their income from copper sales and exceed 50,000 MTFC will pay a tax rate that fluctuates between 8% and 26%. The MOM component will not be applicable in cases where the RIOMA is negative and is calculated based on total mine operating margin, which includes silver and gold by-products. The Mining Royalty includes depreciation as a fully deductible operational expense, however, unlike the First Category, or corporate, deduction, it is on a non-accelerated basis.

The Mining Royalty includes a maximum limit to the total tax burden, consisting of (1) the corporate income tax paid in the respective year, (2) the Mining Royalty (both ad-valorem and MOM components) and (3) withholding taxes to which owners would be subject to upon distribution of dividends. The calculation of withholding taxes assumes a 100% distribution, and is calculated considering a tax burden of 35% of net taxable income, i.e., an additional 8% to the First Category rate of 27%. The Mining Royalty establishes that when the sum of three component exceeds 46.5% of RIOMA, then the Mining Royalty would be adjusted in such a way that it does not exceed the limit.

46

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

For the year ended December 31, 2023, the Company recognized a deferred income tax expense of $31.4 million, and a corresponding increase to deferred income tax liabilities. In determining this charge, the Company has made assumptions regarding the timing of future cash outflows, the timing of when temporary differences will reverse and the MOM rate that will be in effect during the year the temporary differences reverse.

The Company has determined that the ad-valorem component of the Mining Royalty is not considered an income tax under IAS 12 - Income Taxes as it is not calculated on a profitability measure and therefore does not give rise to deferred income taxes, rather, it will be recognized as incurred.

Continuity of the changes in the Company’s net deferred tax position is as follows:

		2023	2022
Net deferred tax liability, January 1	$	558,881$	65,193
Business combination with Mantos_(Note 5)_		—	484,678
Deferred income tax expense for the year		19,668	11,872
Deferred income tax (recovered) charged against other
comprehensive income		(1,307)	65
Other	$	(418) $	(2,927)
Net deferred tax liability,December 31	$	576,824$	558,881

The composition of the deferred tax assets and liabilities are as follows:

	December 31, 2023 December 31,2022
Deferred income tax assets: Non-capital losses Capital leases and other liabilities Inventories and other Derivative instruments Mineral properties, plant and equipment Deferred revenue Asset retirement obligation Deferred income tax assets Deferred income tax liabilities: Mineral properties, plant and equipment Inventories and other Derivative instruments Deferred revenue Deferred income tax liabilities	$ 109,637$ 82,444 79,288 62,725 10,260 3,626 387 7,206 2,192 2,134 7,339 4,480 25,768 26,902
	234,871 189,517
	793,829 730,116 4,954 4,468 — 5,582 12,912 8,232
	811,695 748,398
Net deferred income tax liability	$ 576,824$ 558,881
Breakdown of net deferred income tax liability: Asset Liability	$ (53,401)$ (38,704) 630,225 597,585
	$ 576,824$ 558,881

Deferred taxes are recorded on a net basis by legal entity where the right of offset exists (as shown in the table below) while the above table discloses the consolidated assets and liabilities on a gross basis.

47

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

The composition of the deferred tax expense is as follows:

		Year ended December 31,	Year ended December 31,
		2023	2022
Deferred income tax assets:
Non-capital losses	$		(27,193)$	(12,944)
Accounts payable and other current items			(14,837)	1,102
Derivatives and other			184	24,435
Asset retirement obligation			1,135	(11,682)
Deferred income tax liabilities:
Mineral properties, plant and equipment			63,654	10,818
Inventories and other			486	435
Derivative instruments			(5,582)	5,582
Deferred revenue			1,821	(5,874)
Deferred tax expense	$		19,668$	11,872

At December 31, 2023, $53.4 million (2022 – $38.7 million) was recognized as a deferred tax asset based on management’s forecasts of future income in certain entities.

As at December 31, 2023, the Company had tax losses of $98.0 million (2022 – $62.1 million) with a tax benefit of $26.5 million (2022 – $16.7 million) that are not recognized as deferred tax assets. The Company recognizes the benefit of tax losses only to the extent that it anticipates future taxable income that can be reduced by the tax losses. The $47.0 million (2022 – $10.9 million) of the tax losses for which a tax benefit has not been recorded expire from 2031 to 2043 while the remaining $51.0 million (2022 – $51.2 million) of the tax losses have no expiry date.

The summary of unrecognized deductible temporary differences is as follows:

		Year ended December 31,	Year ended December 31,
		2023	2022
Accounts payable and other	$	11,628$	3,665
Mineral properties, plant and equipment		39,511	68,602
Investments		1,887	2,659
Reclamation and closure cost obligations		91,802	100,102
	$	144,828$	175,028

As at December 31, 2023, the Company has $144.8 million (2022 – $175.0 million) of deductible temporary differences with a tax benefit of $33.5 million (2022 – $42.6 million) that are not recognized as deferred tax assets. It is not probable that future taxable income will be available against which the Company can utilize these benefits. The majority of these benefits do not have an expiry date.

As at December 31, 2023, the Company has not recognized deferred taxes on approximately $537.0 million 2022 – $485.0 million) of retained earnings of its foreign subsidiaries, as it is the Company’s intention to invest these earnings to maintain and expand the business of these subsidiaries. As at December 31, 2023, the Company has $5.0 million (2022 – $nil) of capital losses that are unrecognized and available to be utilized against future capital gains.

48

Notes to the Consolidated Financial Statements

Capstone Copper Corp.

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

17 Provisions

The reclamation and closure cost obligations relate to the operations of the Pinto Valley, Cozamin, Mantos Blancos and Mantoverde mines.

Details of changes in the balances are as follows:

	Reclamation	Reclamation
		& closure			Other	Share-based
		cost	Minto		closure		payment
	obligations		obligation	provisions		obligations		Total
Balance, January 1, 2023	$	199,739 $	—	$	29,929	$	40,464 $ 270,132
Additions		—	53,923		—		—	53,923
Share-based payment expense
(Note 18)		—	—		—		15,045	15,045
Change in estimates		6,741	(2,035)		8,467		—	13,173
Interest expense from discounting
obligations		8,960	—		1,437		—	10,397
Payments during the year		(1,243)	(10,407)		(4,791)		(46,071)	(62,512)
Currency translation adjustments		—	(295)		318		349	372
Balance, December 31, 2023	$	214,197 $	41,186	$	35,360	$	9,787 $ 300,530
Less: Current portion included within
other liabilities(Note 11)		—	(23,943)		—		(8,455)	(32,398)
Totalprovisions - non-current	$	214,197 $	17,243	$	35,360	$	1,332 $ 268,132
Balance, January 1, 2022	$	129,249 $	—	$	3,714	$	78,265 $ 211,228
Acquisitions - Business combination with
Mantos_(Note 5)_		58,914	—		25,379		—	84,293
Share-based payment expense
(Note 18)		—	—		—		26,716	26,716
Change in estimates		8,648	—		1,928		—	10,576
Interest expense from discounting
obligations		5,554	—		2,639		—	8,193
Payments during the year		(2,411)	—		(2,090)		(63,253)	(67,754)
Currencytranslation adjustments		(215)	—		(1,641)		(1,264)	(3,120)
Balance,December 31,2022	$	199,739 $	—	$	29,929	$	40,464 $ 270,132
Less: Current portion included within
other liabilities_(Note 11)_		—	—		—		(30,497)	(30,497)
Totalprovisions - non-current	$	199,739 $	—	$	29,929	$	9,967 $ 239,635

The change in estimates during the year ended December 31, 2023, related to reclamation and closure cost obligations of $6.7 million (2022 – $8.6 million) were recorded as an increase to mineral properties of $6.7 million (2022 – $9.4 million) (Note 9) and to the consolidated statement of (loss) income of $nil (2022 – $(0.8) million).

49

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

A reclamation and closure cost obligation has been recognized in respect of the mining operations of the Pinto Valley mine, including associated infrastructure and buildings as well as the rail operations of the San Manuel Arizona Railroad Company. The estimated undiscounted cash flows required to satisfy the Pinto Valley reclamation and closure cost obligation as at December 31, 2023 were $108.6 million (2022 – $105.1 million), which have been adjusted for inflation and uncertainty of the cash flows and then discounted using the current market-based pre-tax discount rate of 3.85% (2022 - 3.97%). The resulting reclamation and closure cost obligation for the Pinto Valley mine at December 31, 2023 totalled $91.8 million (2022 – $87.9 million). The Company has $186.0 million in surety bonds outstanding at December 31, 2023 (2022 - $171.5 million) to support current and future Pinto Valley mine reclamation obligations.

A reclamation and closure cost obligation has been recognized in respect of the mining operations of the Cozamin mine, including associated infrastructure and buildings. The estimated undiscounted cash flows required to satisfy the Cozamin reclamation and closure cost obligation as at December 31, 2023 were 606.9 million Mexican pesos (2022 – 328.8 million Mexican pesos), which were adjusted for inflation and uncertainty of the cash flows and then discounted using current market-based pre-tax discount rate 9.14% (2022 – 9.14%). The resulting reclamation and closure cost obligation for Cozamin at December 31, 2023 totalled $27.0 million (2022 – $12.2 million), with an additional $5.6 million (2022 – $3.9 million) of other Cozamin mine closure costs related primarily to a defined benefit obligation.

Reclamation and closure cost obligations have been recognized in respect of the mining operations of the Mantos Blancos mine, including associated infrastructure and buildings. The estimated undiscounted cash flows required to satisfy these reclamation and closure cost obligations as at December 31, 2023, were $72.8 million (2022 - $68.5 million), which were adjusted for inflation and uncertainty of the cash flows and then discounted using a current market-based pre-tax discount rate of 5.40% (2022 – 5.20%). The resulting reclamation and closure cost obligation for Mantos Blancos at December 31, 2023, totalled $54.4 million (2022 – $55.1 million), with an additional $15.7 million (2022 – $14.1 million) of other mine closure costs related primarily to a defined benefit obligation. The Company has $31.7 million in surety bonds outstanding at December 31, 2023 (2022 - $27.5 million) to support current and future Mantos Blancos mine reclamation obligations.

Reclamation and closure cost obligations have been recognized in respect of the mining operations of the Mantoverde mine, including associated infrastructure and buildings. The estimated undiscounted cash flows required to satisfy these reclamation and closure cost obligations as at December 31, 2023, were $58.7 million (2022 - $60.4 million), which were adjusted for inflation and uncertainty of the cash flows and then discounted using a current market-based pre-tax discount rate of 5.40% (2022 – 5.19%). The resulting reclamation and closure cost obligation for Mantoverde at December 31, 2023, totalled $41.0 million (2022 – $44.5 million), with an additional $13.5 million (2022 – $11.5 million) of other mine closure costs related primarily to a defined benefit obligation. The Company has $25.9 million in surety bonds outstanding at December 31, 2023 (2022 - $22.4 million) to support current and future Mantoverde mine reclamation obligations.

The Company expects that the cash outflows in respect to the balances accrued as at the financial statement dates will occur proximate to the dates these long-term assets are retired.

In view of uncertainties concerning reclamation and closure cost obligations, the ultimate costs could be materially different from the amounts estimated. The estimate of future reclamation and closure cost obligations is also subject to change based on amendments to applicable laws and legislation. Future changes in reclamation and closure cost obligations, if any, could have a significant impact on the Company.

Minto Obligation

In June 2019, the Company completed the sale of its 100% interest in the Minto mine to Pembridge Resources PLC ("Pembridge"). In conjunction with the sale, Minto Metals Corp. ("Minto Metals") posted a surety bond to cover potential future reclamation liabilities. While this surety bond is outstanding, the Company remains an Indemnitor to the surety bond provider for Minto Metal's surety bond obligations in the Yukon.

50

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

In May 2023, Minto Metals announced that they had ceased all operations at the Minto mine located within the Selkirk First Nation's territory in central Yukon Territories and that the Yukon Government assumed care and control of the site. As Minto Metals has defaulted on the surety bond and has now entered receivership proceedings, Capstone recognized a liability of approximately US$55 million (C$72 million) related to the Company's obligations towards the issuer of the surety bond. In estimating the provision, the Company has made assumptions regarding the timing of cash outflows, long-term inflation rates and discount rate. Due to the associated uncertainty of the timing of cash outflows, it is possible that estimates may need to be revised. While a range of outcomes is possible, the Company believes its potential exposure on calls against the surety bond is capped at approximately C$72 million therefore the timing of cash outflows and changes in the C$:US$ exchange rate are the largest contributors to the measurement uncertainty. During Q4 2023, the Company made payments of $10.4 million to the Yukon Government for reclamation work performed. As at December 31, 2023, the Company has reclassified C$31.7 million (US$23.9 million) to other liabilities.

18. Share Capital

Authorized

An unlimited number of common voting shares without par value.

On March 23, 2022, Capstone Mining, from an accounting point of view, completed the acquisition of Mantos with the deemed issuance of 273,888,541 common shares with a fair value of $5.82 per share.

Stock options

Pursuant to the Company’s amended stock option plan, directors may authorize the granting of options to directors, officers and employees of the Company to a maximum of 10% of the issued and outstanding common shares at the time of grant, with a maximum of 5% of the Company’s issued and outstanding shares reserved for any one person annually. Options granted under the plan have a term not to exceed five years, with the vesting term at the discretion of the Board. The exercise price of options granted are denominated in Canadian dollars (“C$”).

The continuity of stock options issued and outstanding is as follows:

			Options		Weighted average
			outstanding	exerciseprice(C$)
Outstanding,December	31,	2022	7,223,699	$	1.97
Granted			908,555		6.02
Exercised			(4,371,345)		0.85
Expired			(31,381)		6.75
Forfeited			(187,185)		5.56
Outstanding,December	31,	2023	3,542,343	$	4.16

51

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

As at December 31, 2023, the following options were outstanding and outstanding and exercisable:

Exerciseprices(C$) $0.70 $3.47 - $3.90 $4.43 - $4.72 $5.08 - $5.79 $6.00 - $6.97

Outstanding Outstanding& exercisable Number of options Weighted average exercise price(C$) Weighted average remaining life(years) Number of options Weighted average exercise price(C$) Weighted average remaining life(years) 973,781 $ 0.70 1.2 973,781 $ 0.70 1.2 788,588 3.88 2.2 524,781 3.89 2.2 61,507 4.63 3.6 20,502 4.63 3.6 211,438 5.13 3.4 76,600 5.17 3.3 1,507,029 $ 6.39 3.7 327,627 $ 6.82 3.2 3,542,343 $ 4.16 2.7 1,923,291 $ 2.83 1.9

During the year ended December 31, 2023, the total fair value of options granted was $2.0 million (2022 – $2.2 million) and had a weighted average grant-date fair value of C$3.00 (2022 – C$2.90) per option. During the year ended December 31, 2023, the weighted average share price of the 4.4 million options exercised during the period was C$6.19 (2022 - 4.1 million options and C$5.71).

The fair values of the stock options granted were estimated on the respective grant dates using the Black-Scholes Option Pricing Model. Volatility was determined using the Company’s historical daily volatility over the expected life of the options.

Weighted average assumptions used in calculating the fair values of options granted during the year were as follows:

follows:
	Year ended December 31,
	2023	2022
Risk-free interest rate	3.01 %	2.00 %
Expected dividend yield	nil	nil
Expected share price volatility	63 %	61 %
Expected forfeiture rate	6.35 %	6.24 %
Expected life	3.9years	3.8years

Option pricing models require the input of subjective assumptions including the expected price volatility. Changes in the assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options.

Other share-based compensation plans

Under the Share Unit Plan (“SUP”), the Company grants Performance Share Units (“PSUs”) and Restricted Share Units (“RSUs”). PSUs granted to executives vest after three years and are subject to a performance measure of 0% to 200%. RSUs granted to executives and employees vest 1/3 per year starting on the first anniversary of the grant date. Under the Director’s Deferred Share Unit Plan, the Company grants Deferred Share Units (“DSUs”). DSUs granted to directors vest upon issuance but are not redeemable until cessation of service on the Board.

Under the SUP, PSU and RSU obligations can be settled in cash, shares delivered from a Share Purchase Trust or a combination thereof, as determined by and at the discretion of the Human Resources and Compensation Committee of the Company’s Board of Directors. DSU obligations, under the Director’s Deferred Share Unit Plan, are redeemed in cash.

52

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Deferred Share Units

The Company has established a Deferred Share Unit Plan (the “DSU Plan”) whereby DSUs are issued to directors as long-term incentive compensation. DSUs issued under the DSU Plan are fully vested upon issuance and entitle the holder to a cash payment only following cessation of service on the Board of Directors. The value of the DSUs when converted to cash will be equal to the number of DSUs granted multiplied by the quoted market value of a Capstone common share at the time the conversion takes place.

Compensation expense related to DSUs is recorded immediately and is adjusted at each reporting period to reflect the change in quoted market value of the Company’s common shares. DSU obligations, under the DSU Plan, are redeemed in cash.

Restricted Share Units and Performance Share Units

The Company has established a Share Unit Plan (the “Plan”) whereby RSUs and PSUs are issued as long-term incentive compensation. RSUs are issued to employees. PSUs are issued to executives.

RSUs issued under the Plan entitle the holder to a cash payment, shares delivered from a Share Purchase Trust or a combination thereof, at the end of the vesting period equal to the number of RSUs granted, multiplied by the quoted market value of a Capstone common share on the completion of the vesting period. RSUs granted to employees vest 1/3 per year over their three-year term.

PSUs issued under the Plan entitle the holder to a cash payment, shares delivered from a Share Purchase Trust or a combination thereof, at the end of a three-year performance period equal to the number of PSUs granted, adjusted for a performance factor and multiplied by the quoted market value of a Capstone common share on the completion of the performance period. The performance factor can range from 0% to 200% and is determined by comparing the Company’s total shareholder return to those achieved by a peer group of companies.

Compensation expense related to RSUs and PSUs is recorded over the three-year vesting period. The amount of compensation expense is adjusted at each reporting period to reflect the change in quoted market value of the Company’s common shares, the number of RSUs and PSUs expected to vest, and in the case of PSUs, the expected performance factor. RSU and PSU obligations, under the Share Unit Plan, can be settled in cash, shares delivered from a Share Purchase Trust or a combination thereof, as determined by and at the discretion of the Human Resources and Compensation Committee of the Company’s Board of Directors.

During the year ended December 31, 2023, the total fair value of DSUs, RSUs, and PSUs granted under the SUP was $6.6 million (2022 – $5.7 million), and had a weighted average grant-date fair value of C$6.02 (2022 – C$6.63) per unit.

Beginning in 2021, PSUs and RSU’s awarded to executives have been granted under a Treasury Share Unit Plan (“TSUP”). Treasury PSUs granted to executives vest after three years and are subject to a performance measure of 0% to 200%. Treasury RSUs granted to executives vest 1/3 per year starting on the first anniversary of the grant date. Canadian based executives are able to retain the PSUs and RSUs after vesting and elect when to redeem the units within 10 years of the grant date. Under the TSUP, PSU and RSU obligations can be settled in shares from treasury or cash, at the election of the Company.

During the year ended December 31, 2023, the total fair value of units granted under the TSUP was $2.4 million (2022 – $3.5 million), and had a weighted average grant-date fair value of C$3.99 (2022 – C$4.53) per unit.

53

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Weighted average assumptions used in calculating the fair values of units granted under the TSUP during the year were as follows:

year were as follows:
	Year ended December 31,
	2023		2022
Risk-free interest rate	2.78 %		1.90 %
Expected dividend yield		nil	nil
Expected share price volatility		64 %	60 %
Expected forfeiture rate		nil	nil
Expected life	8.7	years	9.2years

No Capstone shares were purchased by the Share Purchase Trust during the year ended December 31, 2023 and 2022.

The continuity of DSUs, RSUs, and PSUs issued and outstanding is as follows:

			Share Unit Plan	Share Unit Plan		Treasury Share	Unit Plan
			DSUs	RSUs	PSUs	RSUs	PSUs
Outstanding,December	31,	2022	2,319,325	2,830,391	3,429,260	659,409	1,345,733
Granted			125,603	1,265,142	89,947	293,426	551,853
Forfeited			—	(397,676)	(103,743)	(4,408)	(44,308)
Settled			(1,487,597)	(2,210,743)	(3,335,447)	(71,877)	—
Outstanding,December	31,	2023	957,331	1,487,114	80,017	876,550	1,853,278

Share-based compensation expense:

Share-based compensation expense:
		Year ended December 31,
		2023	2022
Share-based compensation expense related to stock options	$	1,656$	2,931
Share-based compensation expense related to RSUs and PSUs (TSUP)		2,305	2,109
Share-based compensation expense related to DSUs,RSUs and PSUs(SUP)		15,044	26,716
Total share-based compensation expense	$	19,005$	31,756

19. Revenue

The Company’s revenue breakdown by metal is as follows:

The Company’s revenue breakdown by metal is as follows:
		Year ended December 31,
		2023	2022
Copper concentrate	$	943,610$	891,208
Copper cathode		419,245	441,694
Silver		41,333	33,920
Gold		12,907	1,809
Molybdenum		5,086	4,815
Zinc		252	2,673
Totalgross revenue		1,422,433	1,376,119
Less: treatment and selling costs		(69,410)	(72,186)
Less:pricingand volume adjustments		**(7,512) **	(7,909)
Revenue	$	1,345,511$	1,296,024

54

Notes to the Consolidated Financial Statements

Capstone Copper Corp.

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Pricing and volume adjustments represent mark-to-market adjustments on initial estimates of provisionally priced sales, offsetting realized and unrealized changes to fair value for time swaps, and adjustments to originally invoiced weights and assays.

Customer details are as follows:

Year ended December 31,

					2023							2022
		Pinto	Mantos						Pinto	Mantos
		Valley	Blancos	Mantoverde		Cozamin			Valley	Blancos	Mantoverde		Cozamin
		USA	Chile		Chile		Mexico	Total	USA	Chile		Chile		Mexico	Total
Customer #1	$	—	$ 102,979	$	282,055	$	— $ 385,034$		— $	—	$	—	$	— $	—
Customer #2		—	321,751		—		—	321,751	—	223,919		—		—	223,919
Customer #3		71,303	—		—		131,275	202,578	—	—		—		—	—
Customer #4		185,992	—		3,798		—	189,790	—	—		—		—	—
Customer #5		—	—		—		—	—	—	59,927		192,133		936	252,996
Customer #6		—	—		—		—	—	—	—		—		224,193	224,193
Customer #7		—	—		—		—	—	—	35,281		89,126		—	124,407
Other (i)		221,738	695		5,426		95,421	323,280	507,591	4,008		35,736		3,269	550,604
Total gross
revenue	$	479,033	$ 425,425	$	291,279	$	226,696 $ 1,422,433$		507,591 $	323,135	$	316,995	$	228,398 $ 1,376,119

• i. No other single customer meets the 10% disclosure threshold.

20. (Loss) Earnings Per Share

(Loss) earnings per share, calculated on a basic and diluted basis, is as follows:

		Year ended December 31,	Year ended December 31,
		2023	2022
(Loss) earnings per share
Basic	$	(0.15)$	0.20
Diluted		**(0.15) **	0.19
Net(loss) earnings
Net(loss)earnings attributable to common shareholders - basic and diluted	$	(101,672) $	122,199
Weighted average shares outstanding - basic		693,520,515	625,434,676
Dilutive securities
Stock options		—	4,576,508
TSUP units		—	168,067
Weighted average shares outstanding- diluted		693,520,515	630,179,251
Potentially dilutive securities excluded(as anti-dilutive)
Stock options		3,542,343	2,647,191
TSUP units		2,729,828	1,837,075

For periods where the Company records a loss, Capstone Copper calculates diluted loss per share using the basic weighted average number of shares. If the diluted weighted average number of shares were used, the result would be a further reduction in the loss per share.

55

Notes to the Consolidated Financial Statements

Capstone Copper Corp.

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

21. Compensation of Key Management Personnel

During the year, compensation of key management personnel was as follows:

		Year	ended December 31,
		2023	2022
Salaries and short-term benefits	$		8,426$	10,972
Share-basedpayments			11,118	21,554
	$		19,544$	32,526

Capstone’s key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company and consist of its directors and senior officers.

22. Supplemental Cash Flow Information

The changes in non-cash working capital items are composed as follows:

		Year ended December 31,	Year ended December 31,
		2023	2022
Receivables	$	46,843$	(35,519)
Inventories		(445)	54,024
Other assets		2,829	(11,852)
Accounts payable and accrued liabilities		(101,234)	(61,907)
Other liabilities		**(38,628) **	(38,555)
Net change in non-cash workingcapital	$	(90,635) $	(93,809)

The changes in other non-cash items are composed as follows:

		Year ended December 31,	Year ended December 31,
		2023	2022
VAT receivable	$	(82)$	(303)
Other non-current assets		705	(7,105)
Other non-current liabilities		2,025	3,833
Net change in other non-cash items	$	2,648$	(3,575)

Below is a reconciliation of depreciation in operating cash-flows in the consolidated statement of cash-flows to the Mineral Properties, Plant and Equipment (Note 9 ):

		Year ended December 31,	Year ended December 31,
		2023	2022
Depreciation and depletion per mineral properties, plant and equipment(Note 9)		247,118	197,509
Depreciation included in general and administrative expense		378	573
Depreciation included in care and maintenance		548	609
Non-cash inventory write-down		(1,311)	(1,068)
Change in depreciation and depletion capitalized to inventory, capitalized
strippingand construction inprogress		**(9,849) **	(21,450)
Depreciation and depletion expense	$	236,884$	176,173

56

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

Below is a reconciliation of additions in investing cash-flows in the consolidated statement of cash-flows to the Mineral Properties, Plant and Equipment (Note 9):

Mineral Properties, Plant and Equipment (Note 9):
		Year ended December 31,
		2023	2022
Additions / expenditures on mining interests_(Note 9)_		(820,987)	(671,471)
Lease additions_(Note 13)_		69,497	37,996
Changes in workingcapital and other items (i)		73,221	50,322
Expenditures on mininginterests_(ii)_	$	(678,269) $	(583,153)

• i. The changes in working capital relate to the movement in accounts payable and prepayments related primarily to capital expenditures on the MVDP.

• ii. Includes $61.5 million of capitalized finance costs for the year ended December 31, 2023.

The significant non-cash financing and investing transactions during the year are as follows:

		Year ended December 31,	Year ended December 31,
		2023	2022
Mineral properties, plant and equipment addition for change in estimate of
reclamation and closure cost obligations_(Note 9)_	$	6,741$	13,955
Amortization of mining equipment capitalized to deferred stripping assets		(6,584)	5,355
Fair value of stock options allocated to share capital upon exercise		(1,267)	1,553
Fair value of TSUP units allocated to share capital upon exercise		(204)	—
Business combination with Mantos(Note 5)		—	1,592,679

23. Capital Management

The Company’s capital consists of the items included in shareholders’ equity, long-term debt net of cash and cash equivalents, short-term investments, and investments in marketable securities. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the risk characteristics of the Company’s assets.

To effectively manage its capital requirements, the Company has in place a planning and budgeting process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. The Company ensures that there are sufficient committed loan facilities to meet its short-term business requirements, taking into account its anticipated operational cash flows and its cash and cash equivalents, short-term deposits and investments in marketable securities.

The RCF and MVDP debt facility contain various affirmative, financial and restrictive covenants, including: interest coverage ratios, leverage ratios, other financial ratios and obligations to maintain the security interests in favour of the lenders over substantially all of the respective project’s property and shares, insurance coverage, maintenance of off-take agreements, compliance with environmental and social matters, restrictions on new financial indebtedness, distributions and dispositions, as well as effecting certain hedging strategies as detailed in the lending agreement. As at December 31, 2023, the Company was in compliance with the covenants and requirements of the RCF and MVDP debt facility.

57

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

24. Commitments

Royalty Agreements

Under the terms of the December 2003 option agreement with Grupo Minera Bacis S.A. de C.V. (“Bacis”), Capstone Mining assumed a 100% interest in the Cozamin mine with a 3% net smelter royalty paid to Bacis on all payable metal sold from production on the property covered by the agreement.

In connection with the financing of the Mantos Blancos Debottlenecking Development Project, Mantos Copper S.A. entered into a royalty agreement with Southern Cross Royalties Limited ("Southern Cross"). Southern Cross is entitled to a 1.525% net smelter royalty on copper production. The royalty is for a period initially through January 1, 2035 that may be extended by Southern Cross at its sole discretion through the duration of the mining rights and is subject to the Company's option to reduce the royalty amount by 50% any time after January 1, 2023, subject to a one-time payment.

Agreement with Osisko Bermuda Limited ("Osisko")

Pursuant to a long-term streaming agreement made in 2015, that covers the life of mine, the Company delivers 100% of the payable silver sold by Mantos Blancos to Osisko Bermuda Limited ("Osisko"). Osisko pays a cash price of 8% of the spot price at the time of each delivery, in addition to an upfront acquisition price previously paid. After 19.3 million ounces of silver have been delivered under the agreement, the stream will be reduced to onethird. Mantos Blancos has delivered 5.6 million silver ounces since contract inception until December 31, 2023.

Agreement with Jetti Resources, LLC (“Jetti”)

Under the terms of the 2019 agreement, the Company is required to make quarterly royalty payments to Jetti based on an additional net profits calculation resulting from cathode production at the Pinto Valley mine. The initial term of the agreement is ten years, renewable for 5-year terms thereafter.

Off-take agreements

The Company has sales commitments of copper concentrate production at Mantos Blancos under off-take agreements with Glencore.

The Company has sales commitments equal to 100% of its copper cathode production at Mantoverde and Mantos Blancos under off-take agreements with Anglo American Marketing Limited ("AAML") and expect to deliver into the commitments by the end of 2024.

The Company has concentrate off-take agreements with third parties whereby they will purchase 100% of the copper concentrate produced by the Cozamin mine up to the end of December 2024.

The Company has a number of annual and multi-year concentrate off-take agreements with third parties whereby they will purchase the copper concentrate produced by the Pinto Valley Mine.

The Company entered into an off-take agreement with Boliden Commercial AB (“Boliden”) for 75,000 tonnes of copper concentrates in each contract year. The off-take agreement expires ten years after the commencement of commercial production at the MVDP, subject to potential extension if less than 750 thousand tonnes of copper concentrates have been delivered at the contract term and subject to termination if commercial production does not commence by December 31, 2024.

58

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

Capstone Copper Corp.

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

MMC agreed to provide a $60 million COF in exchange for additional off-take of copper concentrate production under a 10-year contract. The off-take agreement includes Mantoverde agreeing to sell 30% of its annual copper production per year delivered for its equivalent in copper concentrates, plus an additional amount of 30,000 tonnes of copper concentrate as a result of fully utilizing the COF that was provided by MMC in connection with the MVDP. The agreement between MMC and Mantoverde to sell 30% of its annual copper production is for the duration of the Mantoverde commercial mine life. The amount payable for copper is based on average LME prices, subject to certain terms (Note 12).

Other

The Company has contractual agreements extending until 2026 and 2033 to purchase water for operations at Mantoverde and Mantos Blancos, respectively.

The Company has contractual agreements for the purchase of power for operations at Mantos Blancos and Mantoverde, extending until 2038 and 2039, respectively. The Company also entered into a contractual agreement for access to a power transmission plant for the Santo Domingo project, for a period of 12 years from the date the transmission facility construction was completed, in Q4 2023.

The Company has contractual arrangements at Mantos Blancos and Mantoverde for the purchase of 420,000 tonnes of acid in 2024. Additionally, the Company has committed to purchase 100,000 tonnes of acid in both 2025 and 2026.

Included in value added taxes ("VAT") and other taxes receivable is $0.9 million of VAT related to Minera Santo Domingo. The Company has provided a guarantee to the Chilean Internal Revenue Service that all VAT amounts refunded, plus interest, will be repaid if construction of the Santo Domingo development project is not completed by August 31, 2026.

25. Other Expense

Details are as follows:

Details are as follows:
		Year ended December 31,
		2023	2022
Collective bargaining costs	$	(8,930)$	(6,605)
Gold stream obligation		(7,100)	—
Provision for Minto receivable		(5,000)	—
Restructuring costs		(2,307)	(4,161)
Mantos integration costs		—	(3,401)
Care and maintenance expense		(924)	(924)
Other expense		**(6,941) **	(5,351)
	$	(31,202) $	(20,442)

As part of the Company's sale of its previously-owned Minto mine to Pembridge Resources PLC ("Pembridge") in 2019, the Company was to receive up to $20 million in staged payments. The final $5 million, which was due in series of payments to be collected by mid-2024, was outstanding at the time the Minto mine ceased operations and has been deemed uncollectible, and therefore was fully provided for during the year ended December 31, 2023.

59

Notes to the Consolidated Financial Statements

Capstone Copper Corp.

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

26. Accretion Expense

Details of other non-cash interest are as follows:

Details of other non-cash interest are as follows:
		Year ended December 31,
		2023	2022
Interest accretion on deferred revenue_(Note 15)_	$	(9,805)$	(10,001)
Accretion on payable on purchase of NCI_(Note 11)_		(2,025)	(3,528)
Accretion on asset retirement obligations		(8,960)	(5,554)
Accretion on leases_(i)_		(3,134)	(1,952)
Amortization of financing fees		(929)	(1,048)
Other interest(expense)income		3,390	(106)
	$	(21,463) $	(22,189)

• i. A portion of accretion on leases has been capitalized to Construction in Progress related to the MVDP.

27. Segmented Information

The Company is engaged in mining, exploration and development of mineral properties, and has operating mines in the US, Chile and Mexico. The Company has six reportable segments as identified by the individual mining operations of Pinto Valley (US), Mantos Blancos (Chile), Mantoverde (Chile), Cozamin (Mexico), as well as the Santo Domingo development project (Chile) and Other. Early stage exploration, other and corporate operations are reported in the Other segment. Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance. Total assets and liabilities do not reflect intercompany balances, which have been eliminated on consolidation. Segments are operations reviewed by the CEO, who is considered to be the chief operating decision maker.

60

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

	Year ended December 31, 2023
	Pinto Valley Mantos Blancos Mantoverde Cozamin Santo Domingo Other Total
Revenue Copper concentrate Copper cathode Silver Gold Molybdenum Zinc Treatment and selling costs Pricing and volume adjustments (i)	$ 431,559 $ 319,007 $ — $ 193,044 $ — $ — $ 943,610 23,409 104,557 291,279 — — — 419,245 6,072 1,861 — 33,400 — — 41,333 12,907 — — — — — 12,907 5,086 — — — — — 5,086 — — — 252 — — 252 (34,909) (18,152) (4,159) (12,190) — — (69,410) (214) (67) (1,047) (586) — (5,598) (7,512)
Net revenue Production costs Royalties Depletion and amortization	443,910 407,206 286,073 213,920 — (5,598) 1,345,511 (318,110) (301,099) (304,087) (90,706) — — (1,014,002) (1,606) (6,058) — (3,561) — — (11,225) (78,381) (69,162) (59,473) (30,253) — —(237,269)
Income (loss) from mining operations General and administrative expenses Exploration expenses **Share-based compensation expense **	45,813 30,887 (77,487) 89,400 — (5,598) 83,015 (143) — — (117) (126) (25,733) (26,119) (4) — — (78) (23) (4,856) (4,961) — — — — — (19,005) (19,005)
Income (loss) from operations Realized and unrealized gains (losses) on derivative instruments Other (expense) income - net Net finance(costs) income	45,666 30,887 (77,487) 89,205 (149) (55,192) 32,930 — — 2,717 — — 358 3,075 (540) (10,116) (6,264) (2,092) (7,095) (64,805) (90,912) (3,628) (6,798) (843) (8,999) (2,001) (13,827) (36,096)
Income (loss) before income taxes Income tax(expense) recovery	41,498 13,973 (81,877) 78,114 (9,245) (133,466) (91,003) (3,324) (23,169) 5,109 (24,898) — 12,559 (33,723)
Total net income(loss)	$ 38,174 $ (9,196) $ (76,768) $ 53,216 $ (9,245) $(120,907) $(124,726)
Mineral properties, plant & equipment additions	$ 103,266 $ 111,357 $ 529,168 $ 39,848 $ 36,243 $ 1,105 $ 820,987

• i. Included in pricing and volume adjustments are realized and unrealized gains (losses) on the Company's quotational pricing copper contracts.

ii. Intersegment sales and transfers are eliminated in the table above. For the year ended December 31, 2023, intersegment revenue for Cozamin and the Other segment was $13.3 million and $1.3 million (2022 - $13.5 million and $1.3 million), respectively.

61

Capstone Copper Corp.

Notes to the Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

	Year ended December 31,2022
	Pinto Valley Mantos Blancos Mantoverde Cozamin Santo Domingo Other Total
Revenue Copper concentrate Copper cathode Silver Molybdenum Zinc Gold Treatment and selling costs Pricingand volume adjustments	$ 473,221 $ 219,929 $ — $ 198,058 $ — $ — $ 891,208 22,810 101,890 316,994 — — — 441,694 4,936 1,317 — 27,667 — — 33,920 4,815 — — — — — 4,815 — — — 2,673 — — 2,673 1,809 — — — — — 1,809 (36,636) (19,500) (4,544) (11,506) — — (72,186) 2,679 3,633 2,978 129 — (17,328) (7,909)
Net revenue Production costs Royalties Depletion and amortization	473,634 307,269 315,428 217,021 — (17,328) 1,296,024 (300,565) (215,484) (317,041) (69,970) — — (903,060) (2,076) (4,478) — (3,623) — — (10,177) (84,195) (38,953) (35,369) (16,474) — —(174,991)
Income (loss) from mining operations General and administrative expenses Exploration expenses Share-based compensation expense	86,798 48,354 (36,982) 126,954 — (17,328) 207,796 (579) — — (105) (113) (25,447) (26,244) — (241) (1,455) (69) (71) (7,742) (9,578) — — — — — (31,756) (31,756)
Income (loss) from operations Unrealized and realized gain on derivative instruments Other (expense) income - net Net finance costs	86,219 48,113 (38,437) 126,780 (184) (82,273) 140,218 — — 109,468 — — 1,619 111,087 (1,916) 6,110 (11,860) (447) (841) (20,820) (29,774) (2,861) (4,087) (1,730) (8,582) (2,132) (8,418) (27,810)
Income (loss) before income taxes Income tax(expense)recovery	81,442 50,136 57,441 117,751 (3,157) (109,892) 193,721 (4,479) (12,229) (10,976) (35,025) — 5,127 (57,582)
Total net income (loss) Mineral properties, plant & equipment additions	$ 76,963 $ 37,907 $ 46,465 $ 82,726 $ (3,157) $ (104,765) $ 136,139 113,244 104,600 352,758 73,561 27,293 15 671,471

		As at December 31, 2023
		Pinto Valley Mantos Blancos Mantoverde Cozamin Santo Domingo Other Total
Mineral properties, plant and equipment		$ 758,846 $ 1,008,874 $ 2,803,818 $ 259,245 $ 453,908 $ 1,566 $ 5,286,257
Total assets		$ 876,456 $ 1,133,560 $ 3,018,904 $ 302,805 $ 490,671 $ 51,519 $ 5,873,915
Total liabilities		$ 232,368 $ 337,665 $ 1,358,651 $ 109,055 $ 18,415 $ 751,639 $ 2,807,793
		As at December 31,2022
		Pinto Valley Mantos Blancos Mantoverde Cozamin Santo Domingo Other Total
Mineral properties, plant and equipment		$ 734,797 $ 963,166 $ 2,352,804 $ 236,724 $ 417,980 $ 840 $ 4,706,311
Total assets		$ 850,320 $ 1,100,281 $ 2,640,472 $ 279,454 $ 477,433 $ 32,948 $ 5,380,908
Total liabilities		$ 220,547 $ 303,578 $ 1,212,801 $ 220,226 $ 38,962 $ 204,938 $ 2,201,052

62

Capstone Copper Corp.

Notes to the Consolidated Financial Statements Years Ended December 31, 2023 and 2022

(tabular amounts expressed in thousands of US dollars, except share and per share amounts)

28. Subsequent Events

On February 1, 2024, the Company and Orion Fund JV Limited, Orion Mine Finance Fund II LP and Orion Mine Finance (Master) Fund I-A LP (collectively, “Orion”) jointly announced that they entered into an agreement with a syndicate of underwriters led by RBC Capital Markets, as Lead Bookrunner and including National Bank Financial and Scotiabank as Joint Bookrunners (collectively, the “Underwriters”) pursuant to which the Underwriters agreed to purchase, on a bought deal basis from the Company and Orion, a total of 59,520,000 common shares of Capstone (“Common Shares”) at a price of C$6.30 per Common Share (the “Offering Price”), for aggregate gross proceeds of C$375.0 million (the “Offering”). The Company granted the Underwriters an option, exercisable in whole or in part at any time up to 30 days after the closing of the Offering, to purchase up to an additional 8,928,000 Common Shares from the Company at the Offering Price (the “Over-Allotment Option”) which, if exercised in full, would increase the aggregate gross proceeds of the Offering to C$431.2 million. The Offering closed on February 8, 2024.

In connection with the Offering, 56,548,000 Common Shares were issued by the Company for gross proceeds to the Company of C$356.3 million and 11,900,000 were sold by Orion for gross proceeds of C$75.0 million. The Company did not receive any proceeds from the secondary sale, which have been paid directly to Orion.

63