Capstone Copper Corp. — Interim / Quarterly Report 2022

Oct 31, 2022

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CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

September 30, 2022

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

Capstone Copper Corp. Condensed Interim Consolidated Statements of Financial Position

unaudited - expressed in thousands of US dollars

ASSETS		September 30, 2022	December 31,2021
Current
Cash and cash equivalents	$	194,457$	262,094
Short-term investments		1,872	2,259
Receivables_(Note 6)_		117,922	33,489
Inventories_(Note 7)_		142,478	62,825
Derivative assets_(Note 5)_		30,486	543
Other assets_(Note 9)_		41,266	5,450
		528,481	366,660
Mineral properties, plant and equipment_(Note 8)_		4,623,340	1,310,870
Deferred income tax assets_(Note 15)_		18,867	30,593
Derivative assets_(Note 5)_		61,621	—
Other assets_(Note 9)_		28,490	19,839
Total assets	$	5,260,799$	1,727,962
LIABILITIES
Current
Accounts payable and accrued liabilities	$	241,141$	97,384
Lease liabilities_(Note 12)_		28,445	3,410
Income taxes payable		12,865	29,375
Derivative liabilities_(Note 5)_		18,565	387
Other liabilities_(Note 10)_		19,571	99,671
		320,587	230,227
Long-term debt_(Note 13)_		509,498	—
Deferred revenue_(Note 14)_		161,319	165,740
Due to related parties_(Note 11)_		22,917	—
Lease liabilities_(Note 12)_		74,277	12,631
Provisions		274,742	161,088
Deferred income tax liabilities_(Note 15)_		637,146	95,786
Derivative liabilities_(Note 5)_		2,780	—
Other liabilities_(Note 10)_		49,892	46,063
Total liabilities	$	2,053,158$	711,535
EQUITY
Share capital	$	2,445,498$	849,409
Other reserves		39,969	39,008
Retained earnings		283,433	128,010
Total equity attributable to equity holders of the Company		2,768,900	1,016,427
Non-controllinginterest_(Note 11)_		438,741	—
Total equity		3,207,641	1,016,427
Total liabilities and equity	$	5,260,799$	1,727,962
Commitments(Note 20)

See accompanying notes to these condensed interim consolidated financial statements.

2

Capstone Copper Corp.

Condensed Interim Consolidated Statements of Income Three and Nine Months Ended September 30, 2022 and 2021

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

Revenue(Note 17) Operating costs Production costs Royalties Depletion and amortization (Loss) earnings from mining operations General and administrative expenses (Note 21) Exploration expenses (Note 8) Impairment reversal on mineral properties(Note 8) Share-based compensation expense (Note 16) (Loss) income from operations Other income (expense) Foreign exchange gain (loss) Realized and unrealized gains on derivative instruments_(Note 5) Gain on extinguishment of debt(Note 13) Transaction costs(Note 4) Other (expense) income(Note 22) Interest on long-term debt and surety bonds(Note_ 23) Other interest expense_(Note 23) Income before income taxes Income tax expense(Note 15)_ Net income	Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021
	$ 308,704$ 165,412$ 933,434$ 578,876
	(271,434) (80,544) (662,267) (247,818) (2,190) (1,717) (7,119) (5,566) (46,296) (20,387) (131,927) (67,506)
	(11,216) 62,764 132,121 257,986
	(6,289) (4,459) (18,829) (12,937) (1,777) (146) (7,041) (1,848) — — — 92,392 (2,309) (1,203) (8,071) (47,042)
	(21,591) 56,956 98,180 288,551
	9,260 1,282 15,857 (1,098) 78,260 (189) 175,523 (164) 8,035 — 8,035 — — — (19,433) — (3,141) (156) (6,751) 1,823 (1,749) (966) (4,025) (3,815) (4,674) (4,263) (14,525) (8,624)
	64,400 52,664 252,861 276,673
	(26,926) (17,626) (88,330) (65,222)
	$ 37,474$ 35,038$ 164,531$ 211,451
Net income attributable to: Shareholders of Capstone Copper Corp. Non-controllinginterest_(Note 11)_	$ 34,113$ 35,038$ 143,146$ 185,415 3,361 — 21,385 26,036
	$ 37,474$ 35,038$ 164,531$ 211,451
Net earnings per share
Earnings per share - basic_(Note 18) Weighted average number of shares - basic (Note 18)_	$ 0.05$ 0.09$ 0.24$ 0.46 687,376,497 406,701,553 604,534,669 405,096,229
Earnings per share - diluted_(Note 18) Weighted average number of shares - diluted (Note 18)_	$ 0.05$ 0.08$ 0.23$ 0.45 692,239,166 415,287,789 610,515,216 413,386,183

See accompanying notes to these condensed interim consolidated financial statements.

3

Capstone Copper Corp.

Condensed Interim Consolidated Statements of Comprehensive Income Three and Nine Months Ended September 30, 2022 and 2021

unaudited - expressed in thousands of US dollars

Net income Other comprehensive (loss) income ("OCI") Items that will not be reclassified subsequently to profit or loss Change in fair value of marketable securities, net of tax of $289 and $262 (2021 - $nil and $nil) Remeasurement for retirement benefit plans, net of tax of $nil (2021 - $nil) Items that may be reclassified subsequently to profit or loss Foreign currency translation adjustment Total other comprehensive (loss) income for the period Total comprehensive income	Three months ended September Nine months ended September 2022 2021 2022 2021
	$ 37,474$ 35,038$ 164,531$ 211,451
	(679) (491) (4,207) 2,230 (18) — (118) —
	(697) (491) (4,325) 2,230
	(507) (240) (646) (6)
	(507) (240) (646) (6)
	(1,204) (731) (4,971) 2,224
	$ 36,270$ 34,307$ 159,560$ 213,675
Total comprehensive income attributable to: Shareholders of Capstone Copper Corp. Non-controllinginterest_(Note 11)_	$ 32,909$ 34,307$ 138,175$ 187,639 3,361 — 21,385 26,036
	$ 36,270$ 34,307$ 159,560$ 213,675

See accompanying notes to these condensed interim consolidated financial statements.

4

Capstone Copper Corp.

Condensed Interim Consolidated Statements of Cash Flows Three and Nine Months Ended September 30, 2022 and 2021

unaudited - expressed in thousands of US dollars

	Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021
Cash provided by (used in): Operating activities Net income Adjustments for: Depletion and amortization Deferred income and mining tax expense	$ 37,474$ 35,038$ 164,531$ 211,451 46,510 20,719 132,740 68,496 26,926 17,626 88,330 65,222 — — — (92,392) 3,449 325 4,015 325 2,309 1,203 8,071 47,042 6,793 5,229 19,678 12,439 (10,523) (1,664) (27,560) 750 (78,141) 137 (183,868) 624 (8,035) — (8,035) — — — (391) (34) — (998) — (5,067) (3,769) (4,071) (10,126) (12,959) — — — 180,000 (9,215) (6,436) (62,897) (25,393) — 7 592 1,097 109 3 (212) (74)
Impairment reversal on mineral properties (Note 8)
Inventory write-down Share-based compensation expense Net finance costs Unrealized (gain) loss on foreign exchange (Gain) loss on derivatives Gain on extinguishment of debt_(Note 13) Gain on disposal of assets and other Changes in contingent consideration(Note 22) Amortization of deferred revenue and variable consideration adjustments(Note 14) Precious metal stream deposits received(Note 14) Income taxes paid Income taxes received Other payments (receipts) Operating cash flow before working capital Changes in non-cash working capital(Note 19) Other non-cash changes(Note 19) Operating cash flow Investing activities Mineral properties, plant and equipment additions Interest capitalized on construction in progress Cash acquired on business combination with Mantos(Note 4) (Purchase of) proceeds from short-term investments Other assets Investing cash flow Financing activities Proceeds from borrowings(Note 13) Repayment of borrowings(Note 13) Proceeds from related party borrowings(Note 11) Payment on purchase of non-controlling interest(Note 11) KORES payment against promissory note(Note 11)_ Repayment of lease obligations Proceeds from the exercise of options Payments for settlement of financial derivatives Proceeds from settlement of financial derivatives Interest paid on long-term debt and surety bonds Financing cash flow Effect of exchange rate changes on cash and cash equivalents (Decrease in) increase in cash and cash equivalents Cash and cash equivalents - beginningofperiod
	13,887 67,118 124,868 451,527
	294 22,385 (60,337) 26,533 (2,980) (19,473) (1,545) (19,210)
	11,201 70,030 62,986 458,850
	(185,273) (34,178) (408,099) (98,271) (6,569) — (14,656) — — — 219,211 — (3) 1,203 387 1,305 135 596 (7,752) (9,208)
	(191,710) (32,379) (210,909) (106,174)
	195,000 — 295,000 32,000 (131,625) — (144,750) (216,925) 22,900 — 22,900 — (34,731) — (34,731) (17,141) — — — 1,423 (9,568) (838) (20,583) (2,224) 627 1,089 2,496 4,169 (14,571) — (37,509) (3,690) 1,624 754 1,624 1,973 (1,524) (680) (2,490) (2,784)
	28,132 325 81,957 (203,199)
	(1,351) (117) (1,671) 25
	(153,728) 37,859 (67,637) 149,502 348,185 168,223 262,094 56,580
Cash and cash equivalents - end ofperiod	$ 194,457$ 206,082$ 194,457$ 206,082
Supplemental cash flow information(Note 19)

See accompanying notes to these condensed interim consolidated financial statements.

5

Capstone Copper Corp.

Condensed Interim Consolidated Statements of Changes in Equity Three and Nine Months Ended September 30, 2022 and 2021

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

January 1, 2022 Shares issued on exercise of options(Note 16) Share-based compensation(Note 16) Settlement of share units Shares issued as compensation Business Combination Between Capstone and Mantos(Note 4) Change in fair value of marketable securities Remeasurements for retirement benefit plans Net income Foreign currency translation	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
	413,482,355 $ 849,409 $ 53,264 $ 7,429 $ (16,551) $ (5,134) $ 128,010 $ 1,016,427 $ — $ 1,016,427 2,673,449 2,786 (895) — — — — 1,891 — 1,891 — — 4,201 — — — — 4,201 — 4,201 — — — — — 2,626 12,277 14,903 — 14,903 131,775 624 — — — — — 624 — 624 273,888,541 1,592,679 — — — — — 1,592,679 417,356 2,010,035 — — — (4,207) — — — (4,207) — (4,207) — — — (118) — — — (118) — (118) — — — — — — 143,146 143,146 21,385 164,531 — — — — (646) — — (646) — (646)
September 30, 2022	690,176,120 $ 2,445,498 $ 56,570 $ 3,104 $ (17,197) $ (2,508) $ 283,433 $ 2,768,900 $ 438,741 $ 3,207,641
January 1, 2021 Shares issued on exercise of options_(Note 16)_ Share-based compensation Settlement of share units Change in fair value of marketable securities Purchase of non-controlling interest in Acquisition Co. Shares returned and cancelled Net income Foreign currency translation	408,884,120 $ 842,789 $ 53,578 $ 3,429 $ (16,588) $ (6,636) $ (97,514) $ 779,058 $ 110,109 $ 889,167 4,533,527 6,330 (2,161) — — — — 4,169 — 4,169 — — 1,399 — — — — 1,399 — 1,399 — — — — — 1,416 3,475 4,891 — 4,891 — — — 2,230 — — — 2,230 — 2,230 — — — — — — (5,155) (5,155) (136,145) (141,300) (107,099) — — — — — — — — — — $ — $ — $ — $ — $ — $ 185,415 $ 185,415 $ 26,036 $ 211,451 — $ — $ — $ — $ (6)$ — $ — $ (6)$ — $ (6)
September 30, 2021	413,310,548 $ 849,119 $ 52,816 $ 5,659 $ (16,594)$ (5,220)$ 86,221 $ 972,001 $ — $ 972,001

See accompanying notes to these condensed interim consolidated financial statements.

6

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

1. Nature of Operations

The accompanying condensed interim consolidated financial statements have been prepared as at September 30, 2022, 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 4). 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.

Mantos was incorporated on August 15, 2015 and migrated to British Columbia, Canada on March 22, 2022, as part of the Transaction. Mantos, through a wholly owned Chilean subsidiary, Mantos Copper S.A., owned and operated 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.

Capstone Mining was 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. Capstone Mining Chile SpA, a wholly owned Chilean subsidiary, is performing exploration for base metal deposits in Chile.

On March 24, 2021, Capstone Mining consolidated a 100% ownership interest in 0908113 B.C. Ltd. (“Acquisition Co.”) by purchasing the remaining 30% ownership interest from Korea Resources Corporation (“KORES”), resulting in the elimination of the non-controlling interest (“NCI”) in Acquisition Co. ( Note 11 ). Minera Santo Domingo SCM, a wholly owned Chilean subsidiary of Acquisition Co, holds the Santo Domingo copper-iron development project in Chile.

The Company continues to evaluate the potential impacts arising from COVID-19 on all aspects of its business. For the three and nine months ended September 30, 2022 and 2021, there were no significant financial impacts on the Company.

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

The condensed interim consolidated financial statements were approved by the Board of Directors and authorized for issuance on October 31, 2022.

2. Basis of preparation and consolidation

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting using the same accounting policies and methods of application as the audited annual consolidated financial statements of Capstone for the year ended December 31, 2021, which were prepared in accordance with International Financial Reporting Standards (“IFRS”), except as noted below in Note 3. Accordingly, certain information and footnote disclosures normally included in annual financial statements have been omitted or condensed.

These condensed interim consolidated financial statements are prepared as a continuation of the financial statements of Capstone Mining, but reflecting the continuation of the share capital of Mantos. As a result, comparative information included from the three and nine months ended September 30, 2021, is solely that of Capstone Mining.

7

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

Capstone Copper Corp.

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

Certain comparative figures have been reclassified to conform with changes in the presentation of the current year.

3. Significant Accounting Policies, Estimates and Judgements

The Company’s management makes judgements in its process of applying the Company’s accounting policies in the preparation of these condensed interim consolidated financial statements. In addition, the preparation of the financial data requires that the Company’s management makes assumptions and estimates of the impacts of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting impacts on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.

In preparing the Company’s condensed interim consolidated financial statements for the three and nine months ended September 30, 2022, the Company applied the critical judgements and estimates disclosed in Note 2 of its consolidated financial statements for the year ended December 31, 2021, in addition to the accounting policies, critical judgements and estimates noted below.

Business combination between Capstone and Mantos (Note 4)

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 condensed interim 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.

As part of the Transaction, Mantos, the legal acquirer, issued 414.3 million shares to Capstone Mining shareholders. After the Transaction, the combined entity changed its name to Capstone Copper Corp. and is listed on the Toronto Stock Exchange.

IFRS 3 requires that one of Capstone Mining and Mantos be designated as the acquirer for accounting purposes. As such, Capstone Mining will be treated as the acquiring entity 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 were taken into consideration. No single factor was the sole determinant in the overall conclusion; rather all factors were considered in arriving at the conclusion.

8

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

New IFRS Pronouncements

In May 2020, the IASB issued an amendment to IAS 37, Provisions, Contingent Liabilities and Contingent Assets. The amendment clarifies that the costs of fulfilling a contract when assessing whether a contract is onerous comprise both the incremental costs and an allocation of other costs that relate directly to fulfilling the contract. The amendment became effective January 1, 2022 and applies to contracts existing at the date when the amendments are first applied. On adoption of this amendment, the Company assessed the impact of the amendment and determined it does not have a significant effect on the Company's financial statements.

In May 2020, the IASB issued an amendment to IAS 16, Property, Plant and Equipment - Proceeds before Intended Use. The amendment prohibits deducting from the cost of property, plant and equipment amounts received from selling items produced while preparing the asset for its intended use. Instead, a company will recognize such sale proceeds and related cost in the condensed interim consolidated statements of income (loss). The amendment became effective January 1, 2022. The Company has assessed the impact of the amendment and it does not have a significant effect on the Company’s financial statements.

In January 2020, the International Accounting Standards Board ("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. The amendments are 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 to the Company's financial statements.

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 will become effective January 1, 2023. The Company is assessing the impact of the amendment and does not expect it to have a significant effect on the Company’s financial statements.

4. 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 combined entity owns and operates the Mantos Blancos and Mantoverde mines, located in the Antofagasta and Atacama regions, respectively, of Chile. The Mantoverde mine, in which Mitsubishi Material Corp. has a 30% interest, has a current 21-year expected mine life. Mantos Blancos produces copper concentrate and has a 17year expected mine life. The mine is increasing production via the ongoing Mantos Blancos Concentrator Debottlenecking Project which upon completion is expected to increase production from approximately 45,000 tonnes in 2021 to 60,000 tonnes in 2022. The property contains a land package consisting of 57,620 hectares.

Management has concluded that Mantos constitutes a business and, therefore, the acquisition is accounted for in accordance with IFRS 3 - Business Combinations.

9

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

The Company is completing a full and detailed valuation of the fair value of the net assets of Mantos with the assistance of independent valuation experts. Therefore, it is likely that the fair values of the assets acquired, and liabilities assumed will vary from those shown below and the differences may be material. The allocation of the purchase price is based on management's preliminary estimates and certain assumptions with respect to the fair value increment associated with the assets acquired and the liabilities assumed. The purchase price allocation is not final as the Company is continuing to obtain and verify information required to determine the fair value of assets and liabilities and the amount of deferred income taxes arising on their recognition. Consequently, the actual allocation of the purchase price may result in different adjustments than those in these unaudited condensed interim consolidated financial statements. IFRS 3 requires that, as of the acquisition date, the identifiable assets acquired and liabilities assumed should be classified or designated as necessary to apply the IFRS Accounting Standards going forward. The Company is in the process of completing those classifications or designations on the basis of the contractual terms, economic conditions, accounting policies and other relevant conditions as they existed as of the acquisition date of March 23, 2022.

Total transaction costs of $nil and $19.4 million related to the acquisition were expensed during the three and nine months ended September 30, 2022.

Consideration and Purchase Price Allocation

Total consideration for the acquisition was valued at $1,593 million on the acquisition date. The preliminary purchase price allocation, which is subject to final adjustments, is estimated as follows:

Total Consideration

Total Consideration	Total Consideration	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
	Preliminary as				Revised as
		reported			reported
Allocation of Purchase Price	March 31, 2022		Adjustments	September 30, 2022
Cash and cash equivalents	$	219,211 $	—	$	219,211
Receivables_(i)_		118,028	16,563		134,591
Inventories		77,136	32,066		109,202
Due from related party_(ii)_		259,843	—		259,843
Mineral properties, plant and equipment		3,006,687	(17,950)		2,988,737
Other assets		36,376	(12,851)		23,525
Derivative assets		25,504	1,300		26,804
Accounts payable and accrued liabilities		(268,100)	2,971		(265,129)
Due to related party_(ii)_		(259,843)	—		(259,843)
Income taxes payable		(9,983)	—		(9,983)
Long-term debt		(354,438)	(17,204)		(371,642)
Derivative liabilities		(155,386)	—		(155,386)
Lease liabilities		(81,865)	3,719		(78,146)
Deferred income tax liabilities		(484,553)	(15,787)		(500,340)
Provisions		(111,409)	—		(111,409)
**Net assets acquired before non-controlling interest $ **		2,017,208 $	(7,173)	$	2,010,035
Non-controllinginterest_(Note 11)_		(424,529)	7,173		(417,356)
Net assets acquired	$	1,592,679 $	—	$	1,592,679

10

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

• i. Trade receivables acquired as part of the acquisition have a fair value of $64.2 million which is equal to their gross contractual value. Other receivables acquired have a fair value of $64.5 million which is equal to their gross contractual value. Trade and other receivables are expected to be collected during the next 12 months.

• ii. 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 Holdings SpA. These amounts were settled during June 2022 via a non-cash assignment and offset agreement.

Financial and operating results of Mantos are included in the Company's condensed interim consolidated financial statements effective March 23, 2022. During the three and nine months ended September 30, 2022, the acquisition of Mantos contributed $169.3 million and $419.9 million of revenue and $11.8 million and $88.7 million of net income, respectively.

Had the business combination been effected at January 1, 2022, revenue and net income for the nine months ended September 30, 2022, would have been $1,119.0 million, and $175.1 million, respectively.

[5.] 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.

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 and embedded derivatives 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.

11

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

As of September 30, 2022 the Company’s classification of financial instruments within the fair value hierarchy are summarized below:

summarized below:
	Level 1 Level 2 Level 3 Total
Financial assets Short-term investments Copper concentrate receivables_(Note 6) Copper cathode receivables(Note 6) Derivative assets Investment in marketable securities(Note 9)_	$ — $ 1,872 $ — $ 1,872 — 21,900 — 21,900 — 48,050 — 48,050 — 92,107 — 92,107 1,756 — — 1,756
	$ 1,756 $ 163,929 $ —$ 165,685
Financial liabilities Derivative liabilities	$ — $ 21,345 $ — $ 21,345
	$ — $ 21,345 $ —$ 21,345

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 three and nine months ended September 30, 2022.

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

	September 30, 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 6) Copper cathode receivables(Note 6) Other receivables(Note 6) Derivative assets Investment in marketable securities(Note 9) Receivable on sale of Minto (Note 6)	$ — $ — $ 194,457 $ 194,457 1,872 — — 1,872 21,900 — — 21,900 48,050 — — 48,050 — — 9,953 9,953 92,107 — — 92,107 — 1,756 — 1,756 — — 5,000 5,000
	$ 163,929 $ 1,756 $ 209,410 $ 375,095
	December 31,2021
	Fair value through profit or loss Fair value through OCI Amortized cost Total
Cash and cash equivalents Short-term investments Concentrate receivables_(Note 6) Other receivables(Note 6) Derivative assets Investment in marketable securities(Note 9) Receivable on sale of Minto (Note 6)_	$ — $ — $ 262,094 $ 262,094 2,259 — — 2,259 24,686 — — 24,686 — — 1,292 1,292 543 — — 543 — 6,079 — 6,079 — — 5,000 5,000
	$ 27,488 $ 6,079 $ 268,386 $ 301,953

12

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

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

	September 30, 2022
	Fair value through profit or loss Amortized cost Total
Accounts payable and accrued liabilities Payable on purchase of non-controlling interest(Note 10) Long-term debt(Note 13) Derivative liabilities	$ — $ 241,141 $ 241,141 — 39,872 39,872 — 509,498 509,498 21,345 — 21,345
	$ 21,345 $ 790,511 $ 811,856

	December 31,2021
	Fair value through profit or loss Amortized cost Total
Accounts payable and accrued liabilities Payable on purchase of non-controlling interest_(Note 10)_ Derivative liabilities	$ — $ 97,384 $ 97,384 — 81,829 81,829 387 — 387
	$ 387 $ 179,213 $ 179,600

Apart from the assessment and categorization of the financial assets and liabilities acquired during the Mantos acquisition, there have been no changes during the three and nine months ended September 30, 2022 in how the Company categorizes its financial assets and liabilities by fair value through profit or loss, fair value through OCI, and amortized cost.

Observable and unobservable inputs that would have been impacted by the COVID-19 pandemic have been appropriately considered into the fair value measurements of the Company’s financial instruments for the three and nine months ended September 30, 2022.

Financial instruments and related risks

The Company’s activities expose it to financial risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The principal financial risks to which the Company is exposed are commodity price risk, credit risk, foreign exchange risk, liquidity risk and interest rate risk. The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis. There have been no significant changes in the Company’s exposure to these financial risks. During the three and six months ended September 30, 2022, the Company’s exposure to these financial risks has not been significantly impacted by COVID-19.

Derivative instruments

As at September 30, 2022, 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, quotational pricing contracts and share purchase warrants.

13

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

(a) Commodity Price Risk Management

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 hedged a total of 39,134 metric tonnes consisting of 6,561 metric tonnes for the remainder of 2022, 20,310 metric tonnes in 2023 and 12,263 metric tonnes in the first half of 2024. At September 30, 2022, the fair value of these derivatives is $1.7 million (2021 - $nil).

In addition, the Company entered into zero cost collar ("ZCC") contracts whereby it sold a series of call options contracts and purchased a series of put option contracts for $nil cash premium, and also entered into fixed-forfloating swaps. The intent is to ensure positive operating margins on the production of cathodes and balance sheet protection in a lower copper price environment. At September 30, 2022, the fair value of these derivatives is $38.7 million (2021 - $nil).

The Company's outstanding commodity derivative instruments as of September 30, 2022, are as follows:

		Average price	Average price
Type	Remaining term	perpound		Notional
Fixed-for-Floating Swaps Copper	October 2022 - June 2024	$3.43		39,134
Fixed-for-Floating Swaps Copper	January - December 2023	$3.64		37,375
		Put strike	Call strike
Type	Remaining term	(floor)	(ceiling)	Notional
ZCC - Call and Put Option Contracts	October - December-2022	$4.00/lb	$4.86/lb	10,000
ZCC - Call and Put Option Contracts	January - December-2023	$3.20/lb	$4.15/lb	27,500

(b) Interest Rate Risk Management

The Company has exposure to interest rates, specifically the 3-month US$ London Inter-bank Offered Rate ("LIBOR") rate related to the debt financing facility associated with the MVDP. 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 LIBOR swap at 1.015% until March 2030, with a 0% floor on the LIBOR rate until September 2025.

The Company's outstanding interest rate derivative instruments as of September 30, 2022 are as follows:

Type	Remaining term	Fixed Rate	Notional
Fixed-for-floating swaps	October 2022 - March 2030	1.015%	6,888,319
Floor options	October 2022 - September 2025	0%	5,312,671

Fixed for floating swap notional represents 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 September 30, 2022, the fair value of the fixed-for-floating swaps and floor option derivative contracts is $51.1 million (2021 - $nil).

14

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

(c) Foreign Currency Risk Management

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 substantial portion of operating 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. As a covenant in the MVDP financing, a subsidiary of the Company, entered into contracts in February 2021 to hedge the foreign exchange risk related to the capital expenditures for the MVDP.

At September 30, 2022, the fair value of these derivatives is $(15.7) million (2021 - $nil).

The Company's outstanding foreign exchange forwards and swaps as of September 30, 2022, are as follows:

Type	Remaining term	Average Price	Notional
Foreign Exchange Forwards - CLP	October 2022 - March 2024	727.7	20,308,771
Foreign Exchange Swaps - UF	October 2022 - May 2024	41.7	1,389

In September 2022, the Company entered into US dollar to CAD foreign exchange forward contracts whereby it purchased $12.2 million CAD and sold $8.9 million USD at an average rate of 1.372. The contracts mature in February 2023. At September 30, 2022, the fair value of these derivatives is $(0.1) million (2021 - $nil).

The Company's outstanding foreign exchange ZCCs are as follows:

In 2021, the Company entered into ZCCs CLP to US dollar foreign exchange option contracts covering the period from January through December 2022, representing approximately 75% of Santo Domingo's expected CLP capital costs during this period.

In February 2022, the Company entered into ZCCs CLP to US dollar foreign exchange option contracts covering the period from April 2022 through December 2023, representing approximately 50% of Mantoverde's and Mantos Blancos' expected CLP operating costs during this period.

At September 30, 2022, the fair value of the outstanding CLP contracts is $(5.5) million (2021 - $(0.4) million).

In 2021, the Company entered into MXN zero cost collars to US dollar foreign exchange option contracts covering the period from January through December 2022, representing approximately 75% of the expected MXN costs of the Cozamin mine during this period.

At September 30, 2022, the fair value of outstanding MXN contracts is $0.1 million (December 31, 2021 - $0.1 million).

The details of the foreign exchange ZCCs outstanding at September 30, 2022 are as follows:

Quantity	Remaining term	Put strike(floor)	Call strike(ceiling)
19.0 billion CLP	October - December 2022	750.0	931.0 - 976.0
62.7 billion CLP	January - December 2023	775.0	965.0 - 1,046.0
126 million MXN	October - December 2022	20.0	24.75

15

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

(d) Quotational pricing contracts

The Company enters into copper time-spread swaps in order to manage the risk associated with provisional pricing in terms of copper concentrate sales agreements. As at September 30, 2022 the Company had 9,330 metric tonnes of copper swaps outstanding at an effective average cost of $49 per tonne and settling across November 2022 to January 2023. At September 30, 2022, the fair value of the outstanding contracts is $0.5 million.

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

	September	30, 2022	December 31,2021	December 31,2021
Derivative financial assets:
Foreign currency contracts	$	49	$	76
Interest rate swap contracts		16,664		—
Copper commodity contracts		13,273		—
Quotational pricing contracts		500		—
Sharepurchase warrants		—		467
Total derivative financial assets - current		30,486		543
Interest rate swap contracts		34,469		—
Copper commoditycontracts		27,152		—
Total derivative financial assets - non-current	$	61,621	$	—
Derivative financial liabilities:
Foreign currency contracts		18,478		387
Copper commoditycontracts		87		—
Total derivative financial liabilities - current	$	18,565	$	387
Foreign currencycontracts		2,780		—
Total derivative financial liabilities - non-current	$	2,780	$	—

16

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

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

		Three months	ended	Nine months ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Unrealized gain (loss) on derivative financial
instruments:
Foreign currency contracts	$	769$	(831)$	(9,342)$	(2,326)
Copper commodity contracts		61,918	—	184,168	—
Interest rate swap contracts		14,953	—	25,541	—
Quotational pricing contracts		500	—	500	—
Unrealized(loss) gain on warrants		—	(59)	**(387) **	172
Total unrealized gain (loss) on derivative financial
instruments		78,140	(890)	200,480	(2,154)
Realized gain (loss) on derivative financial
instruments:
Foreign currency contracts		(11,577)	701	(18,710)	2,039
Copper commodity contracts		10,457	—	(7,480)	—
Interest rate swapcontracts		1,240	—	1,233	(49)
Total realized (loss) gain on derivative financial
instruments		120	701	(24,957)	1,990
Total unrealized and realized gain (loss) on
derivative financial instruments:	$	78,260 $	(189) $	175,523 $	(164)

6. Receivables

Details are as follows:

Details are as follows:
	September	30, 2022	December	31,2021
Copper cathode	$	48,050	$	—
Copper concentrate		21,900		24,686
Value added taxes and other taxes receivable		27,282		2,135
Income taxes receivable		5,737		—
Receivable on sale of Minto		5,000		5,000
Other		9,953		1,668
Total receivables	$	117,922	$	33,489

17

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

7. Inventories

Details are as follows:

Details are as follows:
	September	30, 2022	December	31,2021
Raw materials and consumables	$	76,998	$	41,290
Work-in-progress		31,663		4,463
Finished goods - copper cathode		21,020		635
Finishedgoods - copper concentrate		12,797		16,437
Total inventories	$	142,478	$	62,825

During the three and nine months ended September 30, 2022, concentrate and cathode inventories recognized as production costs, including depletion and amortization, amounted to $273.0 million and $749.4 million (2021 – $100.9 million and $315.3 million).

During the three and nine months ended September 30, 2022, the Company recorded write-downs of $3.4 million and $4.0 million related to Mantoverde's cathode inventories and Pinto Valley's ore stockpile and supplies inventories. Of the $3.4 million and $4.0 million of write-downs during the three and nine months ended September 30, 2022, $3.3 million and $3.9 million and $0.1 million and $0.1 million was recorded as production costs and depletion and amortization, respectively.

During the three and nine months ended September 30, 2021, the Company recorded write-downs of $0.3 million related to Pinto Valley's molybdenum concentrate inventories. Of the $0.3 million of write-downs during the three and nine months ended September 30, 2021, $0.3 million and $nil was recorded as production costs and depletion and amortization, respectively.

18

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

8. Mineral Properties, Plant and Equipment

Details are as follows:

		Mineralproperties	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, 2022, net Business combination with Mantos Additions Rehabilitation provision adjustments Reclassifications Depletion and amortization	$ 413,573 $ 89,245 $ 411,154 $ 293,938 $ 14,622 1,887,089 — 206,860 117,991 78,146 71,643 51,365 38,442 4,290 27,163 (106) — — — — 23,943 — (23,684) 27,885 (4,871) (63,334) (23,562) — (38,496) (17,365)		$ 88,338 $ 1,310,870 698,651 2,988,737 273,693 466,596 — (106) (23,273) — — (142,757)
At September 30, 2022, net	$ 2,332,808 $ 117,048 $ 632,772 $ 405,608 $ 97,695		$ 1,037,409 $ 4,623,340
At September 30, 2022: Cost Accumulated amortization and impairment Net carryingamount	$ 2,742,489 $ 218,449 $ 632,772 $ 1,979,436 $ 202,803 (409,681) (101,401) —(1,573,828) (105,108)		$ 1,037,409 $ 6,813,358 —(2,190,018)
	$ 2,332,808 $ 117,048 $ 632,772 $ 405,608 $ 97,695		$ 1,037,409 $ 4,623,340

The Company’s exploration costs were as follows:

The Company’s exploration costs were as follows:
		Three months	ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Exploration capitalized to mineral properties	$	1,591$	1,391$	3,971$	5,480
Greenfield exploration expensed to the statement
of income		1,777	146	7,041	1,848
	$	3,368$	1,537$	11,012$	7,328

Exploration capitalized to mineral properties during the three and nine months ended September 30, 2022 and 2021, relates primarily to brownfield exploration at the Cozamin mine. Greenfield exploration expenses during the three and nine months ended September 30, 2022 and 2021 relate primarily to exploration efforts in the US and Brazil.

As at September 30, 2022, construction in progress primarily relates to capital costs incurred in connection with the Mantos Blancos Concentrator Development Project ("Mantos Blancos CDP"), the MVDP, expansionary and sustaining capital at the Pinto Valley and Cozamin mines and the exploration at the Santo Domingo development project. As at December 31, 2021, construction in progress primarily relates to capital costs incurred in connection with sustaining capital at the Pinto Valley and Cozamin mines and the exploration and the Santo Domingo development project. Capital expenditures committed as at September 30, 2022, but not yet incurred is $270.0 million (December 31, 2021 - $21.5 million).

19

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

As at September 30, 2022, the Revolving Credit Facility ("RCF") (Note 13) was secured by the Pinto Valley, Cozamin and Mantos Blacos mineral properties, plant and equipment with a net carrying value of $1,447.9 million (December 31, 2021 – $920.1 million).

Mineral property impairment reversal

On March 31, 2021, the Company identified indicators of impairment reversal related to the Santo Domingo cash generating unit (“CGU”). The Company had recorded impairments of the Santo Domingo CGU in 2015 and 2016 totalling $302.0 million based on discounted cash flow models due to declining long-term copper and iron ore prices, which negatively impacted future estimated cash flows.

Indicators of impairment reversal included improvements in the long-term outlook for copper and iron ore prices and improved project economics, including the announcement of the $290 million gold stream (“Gold PMPA”) with Wheaton Precious Metals Corp. (“Wheaton”), were considered to be indicators of impairment reversal related to Santo Domingo.

The recoverable amount of $368.0 million for the Santo Domingo CGU, based on the fair value of the CGU, was determined to be higher than the carrying value by $92.4 million. The amount of the impairment reversal was determined using management’s best estimates, including pricing parameters implied by the market value of selected comparable transactions involving the sale of similar companies and mineral properties. Valuation methodology differs from the previous discounted cash flow model to reflect trading multiples applied by market participants in valuing development stage projects. Due to the combination of observable and unobservable inputs used in the cash flow models, the valuation falls within Level 3 of the fair value hierarchy. As a result, $92.4 million of the previously recorded impairment was reversed during the three months ended March 31, 2021.

Long-term copper and iron prices used in the impairment reversal tests were as follows:

		March 31,2021
Iron ore price (62% China) - $/t	$	70
Premiums for 65% iron grade - $/t	$	31
Shipping - iron cape sized - $/t	$	(20)
Final iron price to model - $/t	$	81
Copperprice($/lb)	$	3.00

20

Notes to the Condensed Interim Consolidated Financial Statements

Capstone Copper Corp.

Three and Nine Months Ended September 30, 2022 and 2021

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

9. Other Assets

Details are as follows:

Details are as follows:
	September	30, 2022	December	31,2021
Current:
Prepaids and other	$	33,148	$	5,450
Other		8,118		—
Total other assets - current	$	41,266	$	5,450
Non-current:
Prepayments	$	18,046	$	12,046
Investments in marketable securities		1,756		6,079
Finance lease receivable		521		861
Capitalized finance fees (Note 13)		—		566
Deposits		8,167		287
Total other assets - non-current	$	28,490	$	19,839

10. Other Liabilities

Details are as follows:

Details are as follows:
	September	30, 2022	December	31,2021
Current:
Current portion of share-based payment obligations		11,306		50,140
Current portion of payable on purchase of NCI_(Note 11)_		—		43,401
Current portion of deferred revenue_(Note 14)_		7,926		6,130
Other		339		—
Total other liabilities - current	$	19,571	$	99,671
Non-current:
Retirement benefit liabilities		7,559		5,105
Non-current portion of payable on purchase of NCI_(Note 11)_		39,872		38,428
Other		2,461		2,530
Total other liabilities - non-current	$	49,892	$	46,063

11. 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.

21

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

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. The COF carries an interest rate of LIBOR plus 1.70% and amortizing over 37 quarters from the earlier of September 30, 2024 or three quarters after project completion. As at September 30, 2022, the drawn amount of the COF was $22.9 million.

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 per annum of 20,000 to 30,000 tonnes of copper concentrate depending on the amount that is drawn by Mantoverde under the COF 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 Mantoverde's commercial mine life. The amount payable for copper is based on average LME prices, subject to certain terms (Note 20).

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

	September 30, 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 party - Cost Overrun Facility Deferred income tax liabilities Other liabilities Total liabilities Equity attributable to owners of Mantoverde SA Non-controllinginterest	$ 96,740 2,295,228 161,475
	2,553,443
	94,102
	417,730 22,917 427,859 122,724
	1,085,332
	1,029,370 438,741

	Three months ended September 30, 2022 Nine months ended September 30, 2022
Net Revenue Earnings (loss) from mining operations Realized and unrealized gain on derivative instruments Income tax and other expense Net income for the period ended September 30, 2022 Profit attributable to owners of Mantoverde SA Profit attributable to the non-controlling interest Profit for the period Business combination with Mantos (Note 4) Share of profit for the period ended September 30, 2022 Balance at September 30,2022	$ 82,621 $ 227,583 (35,568) (33,382) 44,034 131,188 2,737 (26,522)
	11,203 71,284
	7,842 49,899 3,361 21,385
	$ 11,203 $ 71,284
	435,380 417,356 3,361 21,385
	$ 438,741 $ 438,741

22

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

Purchase of Non-Controlling Interest from KORES

On March 24, 2021, Capstone Mining completed a Share Purchase Agreement (the “SPA”) with 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 Capstone Mining’s consolidation of 100% ownership in Santo Domingo (Note 1) .

The cash consideration of $120 million consists of three payments, payable as follows and subject to withholding taxes:

• a. $30 million paid on closing (paid $17.1 million to KORES net of withholding taxes of $12.9 million on March 24, 2021);

• b. $45 million payable 18 months following closing (paid $34.7 million to KORES net of withholding taxes of $10.3 million on September 26, 2022); and

• c. $45 million payable 48 months following closing (Note 10)

The non-cash consideration consisted of Capstone Mining assuming the KORES promissory note of $32.4 million.

Details of the purchase price allocation are as follows:

Details of the purchase price allocation are as follows:
Cash consideration	$	120,000
Discount rate		5 %
Fair value of cash consideration		108,846
Non-cash consideration		32,424
Purchase price		141,270
Accumulated KORES NCI		(136,145)
Portion of purchase price allocated to equity		5,125
Transaction costs		30
Total allocation to equity	$	5,155
Details of changes in the balance of the KORES promissory note are as follows:
Balance, December 31, 2020	$	33,847
Cash calls against the promissory note		(1,423)
KORESpromissorynote assumed byCapstone		(32,424)
Balance,December 31,2021	$	—

If Capstone Mining subsequently sold Santo Domingo within 18 months of the purchase of the NCI, and the sale met any of the triggering events set out in the SPA, then the second deferred payment to KORES of $45 million would have been accelerated. As at September 30, 2022, an unsecured liability of $39.9 million (December 31, 2021 - $81.8 million) has been recognized in the condensed interim consolidated statement of financial position equal to the discounted amount of the remaining $45 million to be paid (Note 10) . The discounted amount of the remaining $45 million will be accreted up to its face value at 5% per annum. During the three and nine months ended September 30, 2022, $1.0 million and $3.0 million (September 30, 2021 - $1.0 million & $2.0 million) of accretion was recorded in other interest expense in the condensed interim consolidated statements of income.

The net income attributable to the NCI during the three and nine months ended September 30, 2022 was $nil and $nil (2021 – $nil and $26.0 million), which resulted from the 30% interest owned by KORES in Acquisition Co. prior to this transaction. During the three and nine months ended September 30, 2022, Acquisition Co.’s net (loss) income was $(0.5) million and $(2.7) million (2021 - $(0.8) million and $85.1 million).

23

Notes to the Condensed Interim Consolidated Financial Statements

Capstone Copper Corp.

Three and Nine Months Ended September 30, 2022 and 2021

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

12. Lease Liabilities

Details are as follows:

Details are as follows:
	September	30, 2022	December	31,2021
Lease liabilities_(i)_	$	102,722	$	16,041
Less: currentportion		**(28,445) **		(3,410)
Non-currentportion	$	74,277	$	12,631

• i. $78.1 million in lease liabilities were acquired through the business combination between Capstone and Mantos.

Undiscounted lease payments:

Undiscounted lease payments:
	September	30, 2022
Not later than 1 year	$	33,567
Later than 1 year and not later than 5 years		67,502
Later than 5years		15,401
	$	116,470

13. Long-Term Debt

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

Details of the long-term debt balances are as follows:
	September	30, 2022
Mantoverde Development Project Facility(i)	$	417,730
RevolvingCredit Facility		91,768
Long-term debt	$	509,498

• i. At September 30, 2022, $410 million was drawn on the facility with the remaining $7.7 million an adjustment to record the debt at its fair value as required as part of the accounting for the business combination with Mantos. This fair value adjustment amortizes down to its historical cost over the duration of the facility.

24

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

Mantoverde Development Project Facility

Mantoverde secured $572 million in debt financing facility to fund the construction of the MVDP. The debt facility comprises a senior secured amortizing project debt facility in an aggregate amount of $520 million (the “Covered Facility” $250 million, the “Uncovered Facility” $210 million, and the “ECA Direct Facility” $60 million) and a $52 million senior secured mine closure bonding facility (the “Bonding Facility”). 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 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, and compliance with certain financial ratios. As at September 30, 2022, the Company was in compliance with these covenants.

As a condition to the financing facilities, 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 financing agreements and the financing for the MVDP.

Interest on borrowings under the MVDP Facility is payable quarterly at a variable rate of 3-month US$ LIBOR plus a margin per annum (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 is secured by a comprehensive security package covering substantially all of Mantoverde's assets. These facilities amortize from the earlier of September 30, 2024 and 180 days after project completion. The Uncovered Facility amortizes over a 10 year period and the Covered Facility and ECA Direct Facility amortize over 12 years.

Revolving Credit Facility

On May 12, 2022, Capstone Mining amended its corporate RCF. The amended RCF was increased to $500 million, plus $100 million accordion option available 180 days after closing, and has a maturity of four years from closing and an interest cost of adjusted term Secured Overnight Financing Rate ("SOFR") plus a margin of 1.875% - 2.75% depending on the total net leverage ratio. The amended RCF became effective on July 22, 2022 after all the required security was in place and customary closing conditions were met.

The interest rate at September 30, 2022 was adjusted term SOFR plus 1.875% (2021 - US LIBOR plus 2.50%) with a standby fee of 0.42% (2021 – 0.56%) payable on the undrawn balance (adjustable in certain circumstances).

The RCF in effect as of September 30, 2022 is secured against the present and future real and personal property, assets and undertakings of Capstone Copper (other than defined excluded entities, Acquisition Co., Far West Mining Ltd., Minera Santo Domingo SCM, and Far West Exploration S.A., Mantoverde Holding SpA, Mantoverde S.A., Mantos Copper Delaware LLC and subject to certain exclusions for Capstone Mining Chile SpA).

The credit facility requires Capstone to maintain certain financial ratios relating to debt and interest coverage. Capstone was in compliance with these covenants as at September 30, 2022. As at September 30, 2022, the balance of the RCF was $91.8 million (December 31, 2021 - $nil).

25

Capstone Copper Corp. Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

Details of the balance are as follows:

Details of the balance are as follows:
	September	30, 2022
Balance drawn on the RCF	$	95,000
Deferred financingfees		(3,232)
Total RCF balance	$	91,768

As at September 30, 2022, there were seven surety bonds totaling $216.6 million to support various reclamation obligation bonding requirements. This comprises $167.6 million securing reclamation obligations at Pinto Valley, $4.0 million provided as security as part of a power supply agreement at Pinto Valley, $1.7 million related to the construction of a port for the Santo Domingo development project in Chile, $19.5 million at Mantoverde, and $23.9 million at Mantos Blancos, respectively, securing reclamation obligations.

Mantos Blancos Concentrator Development Project Debt Facility

A subsidiary of the Company entered into a $150 million debt facility with Glencore Chile SpA ("Glencore") in connection with the Mantos Blancos CDP, with an associated off-take agreement with Complejo Metalúrgico Altonorte S.A. for 75% of the concentrates produced including the silver contained (both agreements expire on December 31, 2026). Interest on borrowings under the Mantos Blancos CDP Facility is payable quarterly at a variable rate of 3-month US$ LIBOR plus a margin of 4.5% per annum and repayment terms require that the Company make repayment installments quarterly, equal to a percentage of the aggregate loans outstanding at the end of the period. On July 22, 2022, the Company fully repaid the Mantos Blancos CDP debt facility and the facility was cancelled.

14. Deferred Revenue

Silver Precious Metals Purchase Arrangement ("Silver PMPA")

On February 19, 2021, Capstone Mining closed the Silver PMPA with 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 condensed interim consolidated statements of 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 three and nine months ended September 30, 2022, the Company delivered 172,732 and 466,626 ounces (2021 - 176,243 and 561,008 ounces) of silver to Wheaton under the Silver PMPA.

26

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

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. 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.

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
Non-cash finance costs		5,901	1,599	7,500
Recognized as revenue on delivery of silver
andgold		(10,126)	—	(10,126)
Balance,September 30,2022	$	136,285 $	32,959$	169,244

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.

Details of the deferred revenue balance are as follows:

	September	30, 2022	December	31,2021
Deferred revenue	$	169,244	$	171,870
Less: currentportion_(Note 10)_		**(7,925) **		(6,130)
Non-currentportion	$	161,319	$	165,740

27

Notes to the Condensed Interim Consolidated Financial Statements

Capstone Copper Corp.

Three and Nine Months Ended September 30, 2022 and 2021

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

15. Income Taxes

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:

		Three months	Three months	ended		Nine months ended	Nine months ended	Nine months ended
		September		30,		September 30,
		2022		2021		2022		2021
Income before income taxes	$	64,400	$	52,664	$	252,861	$	276,673
Canadian federal andprovincial income tax rates		27.00 %		27.00 %		27.00 %		27.00 %
Income tax expense based on the above rates		17,388		14,219		68,272		74,702
Increase (decrease) due to:
Non-deductible expenditures		(261)		440		9,395		1,080
Effects of different statutory tax rates on losses
(income) of subsidiaries		899		231		789		(3,385)
Mexican and Chilean mining royalty taxes		2,937		2,119		9,001		5,747
Current period losses for which deferred tax
assets (were) were not recognized		3,280		(1,405)		(2,527)		5,338
Non-recognition of tax liabilities related to
impairment reversal		—		—		—		(20,991)
Withholding taxes		1,921		685		1,921		1,211
Adjustments to tax estimates in prior years		306		—		300		(552)
Foreign exchange and other translation
adjustments		67		784		(298)		1,163
Other		389		553		1,477		909
Income tax expense	$	26,926	$	17,626	$	88,330	$	65,222
Current income and mining tax expense	$	12,404	$	14,232	$	36,005	$	37,043
Deferred income tax expense		14,522		3,394		52,325		28,179
Income tax expense	$	26,926	$	17,626	$	88,330	$	65,222

16. Share Capital

Authorized

An unlimited number of common voting shares without par value.

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$”).

28

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

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

The continuity of stock options issued and outstanding	is as follows:
	Options		Weighted average
	outstanding	exerciseprice(C$)
Outstanding,December 31,2021	10,443,887	$	1.14
Granted	1,008,320		6.41
Exercised	(2,673,449)		0.89
Expired	(6,389)		3.90
Forfeited	(97,950)		1.54
Outstanding,September 30,2022	8,674,419	$	1.82

As at September 30, 2022, the following options were outstanding and outstanding and exercisable:

Exerciseprices(C$) $0.54 - $0.91 $1.44 $3.23 - $3.90 $4.72 $5.08 - $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) 5,717,645 $ 0.67 2.2 4,362,265 $ 0.66 2.1 871,773 1.44 0.4 871,773 1.44 0.4 1,066,802 3.90 3.4 468,871 3.90 3.4 41,939 4.72 4.6 — — — 976,260 $ 6.50 4.5 141,040 $ 6.74 4.4 8,674,419 $ 1.82 2.4 5,843,949 $ 1.18 2.0

During the three and nine months ended September 30, 2022, the total fair value of options granted was $0.1 million and $2.1 million (2021 – $nil and $1.4 million) and had a weighted average grant-date fair value of C$1.64 and C$2.97 (2021 – C$nil and C$1.65) per option. During the three and nine months ended September 30, 2022, the weighted average share price of the 0.1 million and 2.7 million options exercised during the period was C$3.27 and C$6.46 (2021 - 1.6 million and 4.5 million options and C$5.48 and C$5.02, respectively).

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

follows:
	Three months ended September	30,	Nine months ended	September 30,
	2022 2021		2022	2021
Risk-free interest rate	2.87 %	N/A	1.88 %	0.34 %
Expected dividend yield	nil	N/A	nil	nil
Expected share price volatility	63 %	N/A	61 %	59 %
Expected forfeiture rate	6.24 %	N/A	6.24 %	6.14 %
Expected life	3.8years	N/A	3.8years	3.7years

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.

29

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

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.

During the three and nine months ended September 30, 2022, the total fair value of DSUs, RSUs, and PSUs granted under the SUP was $0.1 million and $5.4 million (2021 – $nil and $3.2 million), and had a weighted average grant-date fair value of C$3.23 and C$6.90 (2021 – C$nil C$3.94) 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 three and nine months ended September 30, 2022, the total fair value of units granted under the TSUP was $nil and $3.5 million (2021 – $nil and $2.1 million), and had a weighted average grant-date fair value of C$nil and C$4.53 (2021 – $nil and C$2.61) per unit.

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

	Three months	ended		Nine months ended	Nine months ended
	September	30,		September 30,
	2022	2021		2022	2021
Risk-free interest rate	N/A		N/A	1.90 %	0.67	%
Expected dividend yield	N/A		N/A	nil		nil
Expected share price volatility	N/A		N/A	60 %	60	%
Expected forfeiture rate	N/A		N/A	nil		nil
Expected life	N/A		N/A	9.2years	10years

No Capstone shares were purchased by the Share Purchase Trust during the three and nine months ended September 30, 2022 and 2021.

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 31,2021	3,116,341	8,294,406	6,102,367	347,033	694,063
Granted	65,102	878,824	44,843	350,323	700,640
Transferred		24,485	48,970	(24,485)	(48,970)
Forfeited	—	(162,372)	—	—	—
Settled	(909,702)	(6,193,883)	(2,766,920)	—	—
Outstanding,September 30,2022	2,271,741	2,841,460	3,429,260	672,871	1,345,733

30

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

Share-based compensation expense

		Three months	ended	Nine months ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Share-based compensation expense related to
stock options	$	371$	297$	2,569$	840
Share-based compensation expense related to
RSUs and PSUs (TSUP)		479	239	1,633	559
Share-based compensation expense related to
DSUs,RSUs and PSUs(SUP)		1,459	667	3,869	45,643
Total share-based compensation expense	$	2,309$	1,203$	8,071$	47,042

17. Revenue

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

		Three months	ended	Nine months ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Copper concentrate	$	200,399$	164,146$	640,054$	573,154
Copper cathode		119,706	—	315,360	—
Silver		7,741	8,872	25,661	29,439
Molybdenum		771	—	2,693	—
Zinc		—	739	1,712	6,016
Gold		34	679	851	2,064
Lead		—	(7)	—	359
Totalgross revenue		328,651	174,429	986,331	611,032
Less: treatment and sellingcosts		**(19,947) **	(9,017)	**(52,897) **	(32,156)
Revenue	$	308,704$	165,412$	933,434$	578,876

Revenue recognized in the reporting period for provisional pricing changes recorded in the above table:

		Three months	ended	Nine months ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Copper concentrate	$	10,886$	4,448$	(24,217)$	(10,710)
Copper cathode		131	—	(3,439)	—
Silver		213	378	(201)	(598)
Gold		(274)	213	(359)	(51)
Zinc		—	(90)	(35)	(21)
Lead		—	(7)	—	(9)
Molybdenum		**(84) **	—	**(87) **	—
Revenue adjustments from provisional pricing
arrangements	$	10,872$	4,942$	(28,338) $	(11,389)

31

Notes to the Condensed Interim Consolidated Financial Statements

Capstone Copper Corp.

Three and Nine Months Ended September 30, 2022 and 2021

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

18. Earnings Per Share

Earnings per share, calculated on a basic and diluted basis, is as follows:

		Three months ended	Three months ended	Nine months ended	Nine months ended
		September 30,		September 30,
		2022	2021	2022	2021
Earnings per share
Basic	$	0.05$ 0.09$		0.24$ 0.46
Diluted		0.05	0.08	0.23	0.45
Net earnings
Net earnings attributable to common
shareholders - basic and diluted	$	34,113$ 35,038$		143,146$ 185,415
Weighted average shares outstanding - basic		687,376,497	406,701,553	604,534,669	405,096,229
Dilutive securities
Stock options		4,862,669	8,316,425	5,779,954	8,095,013
TSUP units		—	269,811	200,593	194,941
Weighted average shares outstanding- diluted		692,239,166	415,287,789	610,515,216	413,386,183
Potentially dilutive securities excluded (as anti-
dilutive)
Stock options		3,811,750	2,299,269	2,894,465	2,520,681
TSUP units		2,018,604	771,285	1,818,011	846,155

19. Supplemental Cash Flow Information

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

		Three months	ended	Nine months ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Receivables	$	6,062$	(8,430)$	40,658$	1,783
Inventories		10,677	(5,215)	5,763	1,426
Other assets		7,281	(15,709)	(3,045)	(12,777)
Accounts payable and accrued liabilities		(23,452)	12,907	(67,263)	8,038
Other liabilities		**(274) **	38,832	**(36,450) **	28,063
Net change in non-cash workingcapital	$	294$	22,385$	(60,337) $	26,533

32

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

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

		Three months	ended	Nine months ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
VAT receivable	$	(93)$	7,307$	(258)$	6,384
Other non-current assets		(3,373)	15,086	(3,374)	15,292
Other non-current liabilities		486	(41,866)	2,087	(40,886)
Net change in other non-cash items	$	(2,980) $	(19,473) $	(1,545) $	(19,210)

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

		Three months	ended	Nine months ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Decrease (increase) in accounts payable and
accrued liabilities related to mineral properties,
plant and equipment	$	15,673$	(860)$	6,129$	5,017
Amortization of mining equipment capitalized to
deferred stripping assets		2,138	778	4,113	3,001
Fair value of stock options allocated to share
capital upon exercise		9	550	895	2,161
Business combination with Mantos(Note 4)		—	—	1,592,679	—
	$	17,822$	470$	1,603,818$	10,181

20. 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 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 (Note 13).

33

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

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") up to the end of December 2027.

The Company has a concentrate off-take agreement with a third party whereby the third party will purchase 100% of the copper concentrate produced by the Cozamin Mine up to the end of December 2022.

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 thousand 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.

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 per annum of 20,000 to 30,000 tonnes of copper concentrate depending on the amount that is drawn by Mantoverde under the COF 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 Mantoverde's commercial mine life. The amount payable for copper is based on average LME prices, subject to certain terms (Note 11).

Other

The Company has a contractual agreement extending until 2033 to purchase water for operations at Mantos Blancos.

The Company has contractual agreements for the purchase of power for operations at Mantos Blancos and Mantoverde, extending until 2028 and 2039, respectively.

The Company has contractual arrangements at Mantos Blancos and Mantoverde for the purchase of acid in 2023 and 2024 of 325 ktonnes and 420 ktonnes, respectively.

Included in value added taxes ("VAT") and other taxes receivable is $1.3 million of VAT related to Minera Santo Domingo which has been reclassified from non-current other assets (Note 6). 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.

21. General & Administrative Expenses

Details are as follows:

Details are as follows:
		Three months	ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
General & administrative	$	6,147$	4,289$	18,358$	12,438
Corporate depreciation		142	170	471	499
	$	6,289$	4,459$	18,829$	12,937

34

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

22. Other (Expense) Income

Details are as follows:

Details are as follows:
		Three months	ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Mantos integration costs	$	(281)$	—$	(3,401)$	—
Insurance proceeds		—	—	2,368	—
Mark-to-market gain on contingent consideration
(Note 9)		—	998	—	5,067
Streaming arrangement transaction costs		—	(100)	—	(1,029)
Business development costs		—	(509)	—	(1,110)
Other expense		**(2,860) **	(545)	**(5,718) **	(1,105)
	$	(3,141) $	(156) $	(6,751) $	1,823

23. Finance Costs

Details of interest on long-term debt and surety bonds are as follows:

		Three months	ended		Nine months ended	Nine months ended
		September	30,		September 30,
		2022	2021		2022	2021
Interest and standby fees on RCF and surety
bonds	$	1,524$		683$	3,233$	2,966
Amortization of financingfees (Note 9)		225		283	792	849
	$	1,749$		966$	4,025$	3,815

Details of other interest are as follows:

Details of other interest are as follows:
		Three months	ended	Nine months ended
		September	30,	September 30,
		2022	2021	2022	2021
Interest accretion on deferred revenue_(Note 14)_
(i)	$	2,500$	2,950$	7,500$	5,750
Interest on leases		1,451	165	3,005	470
Accretion on payable on purchase of NCI_(Note_
11) (ii)		971	987	3,037	1,963
Accretion on asset retirement obligations		823	169	2,338	505
Other interest(income)expense		**(1,071) **	(8)	**(1,355) **	(64)
	$	4,674$	4,263$	14,525$	8,624

35

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2022 and 2021

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

24. 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. The business combination with Mantos was completed on March 23, 2022, therefore no results for the Mantos Blancos and Mantoverde segments are reflected in the prior period comparative figures. 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.

Operating segment details are as follows:

	Three months ended September 30, 2022
	Pinto Valley Mantos Blancos Mantoverde Cozamin Santo Domingo Other Total
Revenue Copper concentrate Copper cathode Silver Molybdenum Gold Treatment and selling costs	$ 94,826 $ 61,930 $ — $ 43,643 $ — $ — $ 200,399 4,983 30,508 84,215 — — — 119,706 694 424 — 6,623 — — 7,741 771 — — — — — 771 34 — — — — — 34 (9,400) (6,191) (1,594) (2,762) — — (19,947)
Net revenue Production costs Royalties Depletion and amortization	91,908 86,671 82,621 47,504 — — 308,704 (70,719) (74,680) (108,903) (17,132) — — (271,434) (385) (1,400) — (405) — — (2,190) (18,764) (14,283) (9,286) (3,963) — — (46,296)
Income (loss) from mining operations General and administrative expenses Exploration expenses Share-based compensation expense	2,040 (3,692) (35,568) 26,004 — — (11,216) (85) — — (18) (18) (6,168) (6,289) — — (1) (9) (3) (1,764) (1,777) — — — — — (2,309) (2,309)
Income (loss) from operations Realized and unrealized gains on derivative instruments Other (expense) income Net finance costs	1,955 (3,692) (35,569) 25,977 (21) (10,241) (21,591) — — 44,034 — — 34,226 78,260 (459) 11,368 2,887 119 (271) 510 14,154 (1,282) (467) 48 (2,091) (533) (2,098) (6,423)
Income (loss) before income taxes Income tax recovery (expense)	214 7,209 11,400 24,005 (825) 22,397 64,400 941 (6,594) (197) (8,223) — (12,853) (26,926)
Total net income(loss)	$ 1,155 $ 615 $ 11,203 $ 15,782 $ (825) $ 9,544 $ 37,474
Mineral properties, plant & equipment additions	$ 36,796 $ 21,903 $ 64,128 $ 17,599 $ 8,082 $ — $ 148,508

• i. Intersegment sales and transfers are eliminated in the table above. For the three months ended September 30, 2022, intersegment revenue for Cozamin and the Other segment was $3.4 million and $0.3 million (2021 - $4.1 million and $0.4 million), respectively.

36

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

	Three months ended September 30,2021
	Pinto Valley Cozamin Santo Domingo Other Total
Revenue Copper Cathode Silver Zinc Gold Lead Treatment and sellingcosts	$ 108,130 $ 56,016 $ — $ — $ 164,146 — — — — — 1,197 7,675 — 8,872 — 739 — — 739 679 — — — 679 — (7) — — (7) (6,143) (2,874) — — (9,017)
Net revenue Production costs Royalties Depletion and amortization	103,863 61,549 — — 165,412 (63,506) (17,038) — — (80,544) (506) (1,211) — — (1,717) (16,676) (3,711) — — (20,387)
Earnings from mining operations General and administrative expenses Exploration expenses Share-based compensation expense	23,175 39,589 — — 62,764 (535) (61) (1) (3,857) (4,454) — (33) (3) (130) (166) — — — (1,203) (1,203)
Earnings (loss) from operations Unrealized and realized gains on derivative instruments Other income (expense) Net finance costs	22,392 39,495 (4) (5,190) 56,693 — — — 555 555 142 942 (62) (998) 24 (456) (2,304) — (1,619) (4,379)
Earnings (loss) before income taxes Income tax expense	22,078 38,133 (66) (7,252) 52,893 (3,389) (13,783) — (454) (17,626)
Total net income(loss)	$ 18,689 $ 24,350 $ (66)$ (7,706)$ 35,267
Mineralproperties, plant & equipment additions	$ 20,628 $ 9,569 $ 7,547 $ 60 $ 37,804

37

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

	Nine months ended September 30, 2022
	Pinto Valley Mantos Blancos Mantoverde Cozamin Santo Domingo Other Total
Revenue Copper concentrate Copper cathode Silver Molybdenum Zinc Gold Treatment and selling costs	356,083 135,798 — 148,173 — — 640,054 16,634 67,880 230,846 — — — 315,360 3,651 983 — 21,027 — — 25,661 2,693 — — — — — 2,693 — — — 1,712 — — 1,712 851 — — — — — 851 (28,769) (12,387) (3,263) (8,478) — — (52,897)
Net revenue Production costs Royalties Depletion and amortization	351,143 192,274 227,583 162,434 — — 933,434 (228,333) (149,905) (233,014) (51,015) — — (662,267) (1,622) (2,708) — (2,789) — — (7,119) (63,627) (28,155) (27,951) (12,194) — —(131,927)
Income from mining operations General and administrative expenses Exploration expenses Share-based compensation expense	57,561 11,506 (33,382) 96,436 — — 132,121 (461) — — (77) (72) (18,219) (18,829) — — (1) (60) (38) (6,942) (7,041) — — — — — (8,071) (8,071)
Income (loss) from operations Realized and unrealized gains on derivative instruments Other (expense) income Net finance costs	57,100 11,506 (33,383) 96,299 (110) (33,232) 98,180 — — 131,188 — — 44,335 175,523 (1,168) 21,425 (816) (480) (665) (20,588) (2,292) (2,459) (1,114) (988) (6,515) (1,599) (5,875) (18,550)
Income (loss) before income taxes Income tax expense	53,473 31,817 96,001 89,304 (2,374) (15,360) 252,861 (5,754) (14,393) (24,717) (29,135) — (14,331) (88,330)
Total net income(loss)	$ 47,719 $ 17,424 $ 71,284 $ 60,169 $ (2,374) $(29,691) $ 164,531
Mineral properties, plant & equipment additions	$ 77,226 $ 94,446 $ 218,047 $ 53,306 $ 23,556 $ 15 $ 466,596

i. Intersegment sales and transfers are eliminated in the table above. For the nine months ended September 30, 2022, intersegment revenue for Cozamin and the Other segment was $10.5 million and $1.0 million (2021 - $10.7 million and $1.4 million), respectively.

38

Capstone Copper Corp.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Nine Months Ended September 30, 2022 and 2021

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

	Nine months ended September 30,2021
	Pinto Valley Cozamin Santo Domingo Other Total
Revenue Copper Cathode Silver Zinc Gold Lead Treatment and sellingcosts	414,330 158,824 — — 573,154 — — — — — 4,918 24,521 — — 29,439 — 6,016 — — 6,016 2,062 2 — — 2,064 — 359 — — 359 (22,524) (9,632) — — (32,156)
Net revenue Production costs Royalties Depletion and amortization	398,786 180,090 — — 578,876 (200,346) (47,472) — — (247,818) (843) (4,723) — — (5,566) (56,012) (11,494) — — (67,506)
Earnings from mining operations General and administrative expenses Exploration expenses Impairment reversal on mineral properties Share-based compensation expense	141,585 116,401 — — 257,986 (716) (239) (7) (11,975) (12,937) — (1,061) (25) (762) (1,848) — — 92,392 — 92,392 — — — (47,042) (47,042)
Earnings (loss) from operations Unrealized and realized gain on derivative instruments Other income (expense) Net finance costs	140,120 115,101 92,360 (59,779) 287,802 — — — 25 25 77 1,204 (647) 62 696 (1,417) (5,512) (850) (4,660) (12,439)
Earnings (loss) before income taxes Income tax(expense)recovery	138,780 110,793 90,863 (64,352) 276,084 (24,052) (37,555) (3,961) 346 (65,222)
Total net income(loss)	$ 114,728 $ 73,238 $ 86,902 $ (64,006)$ 210,862
Mineralproperties, plant & equipment additions	$ 65,741 $ 28,308 $ 20,674 $ 117 $ 114,840

	As at September 30, 2022	As at September 30, 2022
	Pinto Valley Mantos Blancos Mantoverde Cozamin Santo Domingo Other Total
Mineral properties, plant and equipment	$ 749,285 $ 941,945 $ 2,295,228 $ 221,700 $ 414,244 $ 938 $ 4,623,340
Total assets	$ 854,022 $ 1,053,406 $ 2,553,443 $ 268,279 $ 481,482 $ 50,167 $ 5,260,799
Total liabilities	$ 245,965 $	290,397 $ 1,085,332 $ 217,330 $ 41,764 $ 172,370 $ 2,053,158
		As at December 31,2021
		Pinto Valley Santo Domingo Cozamin Other Total
Mineralproperties, plant and equipment		$ 737,878 $ 390,721 $ 180,873 $ 1,398 $ 1,310,870
Total assets		$ 912,132 $ 434,797 $ 281,718 $ 99,315 $ 1,727,962
Total liabilities		$ 243,704 $ 36,585 $ 247,379 $ 183,867 $ 711,535

39