Capstone Announces Initial Mineral Resource Estimate for Footwall Zone at Cozamin Mine

VANCOUVER, June 20, 2011 /PRNewswire/ --

Adds 74 million pounds of copper in the M&I Class and 163 million pounds in the Inferred Class

Capstone Mining Corp. ("Capstone") (TSX: CS) today announced the result of an initial mineral resource estimate for the Mala Noche Footwall Zone ("MNFWZ") at the Cozamin Mine in Zacatecas, Mexico.  This is a preliminary resource and exploration is continuing.

"The size and grade of this new mineral resource estimate allows Capstone to now consider production expansion scenarios as well as extended mine life in an upcoming pre-feasibility study to begin in the third quarter of 2011," said Brad Mercer, Vice-President, Exploration for Capstone.  "The copper grade of this new resource located in the footwall to the main ore zone is higher than the current mineral reserve grades for the mine.  Our Cozamin team has successfully undertaken test mining in the MNFWZ from two crosscuts driven from active mine workings to levels 12.0 and 12.8 in the MNFWZ where they have drifted both east and west using conventional cut and fill mining methods and have already extracted approximately 18,000 tonnes grading 2.67% copper," he added.

Cozamin Mine - Mineral Resources by Class for the MNFWZ at a US$35 NSR Cut-off Grade ("COG")*

                  Tonnes  Copper Silver Zinc Contained Contained   Contained
    Classification (000's)  (%)   (g/t)  (%)  Cu(M lbs)Silver(M oz) Zn(M lbs)
    Measured (M)    329   2.25   32.3  0.11   16.3     0.342         0.8
    Indicated (I) 1,122   2.34   37.8  0.19   57.9     1.364         4.6
    Total (M+I)   1,451   2.32   36.6  0.17   74.2     1.706         5.4
    Additional
    Inferred      2,836   2.61   30.8  0.28  162.9     2.812        17.6

* Metal Price assumptions (in USD) and recovery assumptions used to calculate the NSR COG are exactly the same as for the Cozamin Mine's Mineral Reserve. Prices: Cu=US$2.50; Zn=US$0.80; Ag=US$4.00. Processing recoveries: Cu=92%; Zn=70%; Ag=72%.

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates include inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. Even though test mining has been undertaken in areas with M&I class mineral resources there is no certainty that inferred mineral resources will be converted to measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.

Mineral Resource Estimate Methodology

The mineral resource estimate for the MNFWZ reported herein was prepared by Capstone's geological team at the Cozamin Mine in Zacatecas, Mexico and the methodology and results have been reviewed by independent consultant Mr. Robert Sim, P.Geo. of SIM Geological Inc. of Delta, BC, Canada.  The estimate was completed using GEMS© software using a three dimensional block model (3 m by 2 m by 2 m block size).  The dyke that hosts the MNFWZ mineralization was interpreted as a three dimensional wireframe domain that was used as a hard boundary to constrain the estimation.  Interpolation parameters have been derived based on geostatistical analysis conducted on 0.5 metre composited drill hole and channel sample data.  Block grades have been estimated using ordinary kriging and the resource has been classified based on proximity to sample data and the continuity of mineralization in accordance with CIM best practices. The MNFWZ resource has been estimated using a total of 73 diamond drill holes, variably spaced at 50 to 150 metre intervals, and 72 chip channels taken at approximately 3 metre intervals across the back of the test mining drifts.

Capstone's Future Exploration Plans Regarding the MNFWZ

In preparation for a pre-feasibility study to start in the third quarter of 2011 that will examine the current mine and processing plant capacities in light of this new discovery, two underground diamond drills are actively infill drilling the MNFWZ mineral resource area. The aim is to upgrade the classification of the current inferred mineral resource to indicated class or better so that economic considerations may be applied for the purpose of establishing a new mineral reserve (see cautionary note above regarding conversion of mineral resources to mineral reserves). In addition to exploration drilling aimed at reclassification of mineral resources, a third drill is scheduled to start in July to step out to the east and down-dip beyond the extents of the current resource estimate to test for extensions to the mineralization where drilling now clearly shows the zone is still open in both directions. In preparation for the arrival of that third underground drill rig Capstone is currently upgrading mine ventilation and preparing new drill stations.

About Capstone Mining Corp.

Capstone Mining Corp. is a TSX listed Canadian mining company with two producing copper mines in the Americas: the Cozamin copper-silver-zinc-lead mine located in Zacatecas State, Mexico and the Minto copper-gold-silver mine in Yukon, Canada.

Using its operations as a springboard, Capstone aims to grow organically and through acquisitions in politically stable, mining-friendly jurisdictions, with a focus in the Americas: organic growth through continued mineral resource and reserve expansions as well as expanding operations at its operating mines, development of its large 70% owned Santo Domingo copper-iron-gold project in Chile in partnership with Korea Resources Corporation, development of its Kutcho copper-zinc-gold-silver project in British Columbia and exploration at properties in Chile, British Columbia and Australia.  Capstone's cash flow and strong balance sheet provide the platform to enhance that growth profile.  Capstone is included in the S&P/TSX Composite Index and S&P/TSX Global Mining Index.  Additional information is available at http://www.capstonemining.com .

Quality Assurance

The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 ("NI 43-101") and reviewed by Brad Mercer, P. Geol., Vice President, Exploration for Capstone, the person who oversees exploration activities on the Cozamin Mine property.

The mineral resource estimate reported herein has been produced by Cozamin Mine Geologist Cesar Pena and has been reviewed by independent consultant Robert Sim, P.Geo. of SIM Geological Inc.  The mineral resources presented herein have been estimated in conformity with generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best Practices" guidelines and are reported in accordance with Canadian Securities Administrators' National Instrument 43-101. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

Analyses for copper, zinc, lead, silver and gold were completed by ALS Chemex using the following method. The entire sample is crushed to a minimum of 70% minus 10 mesh. A 250g subsample of the crushed material is then pulverized to 85% minus 200 mesh. Gold and silver grades are determined by gravimetric fire assay using a 50g charge taken from the pulverized material. Copper, zinc and lead are determined by ICP analysis after 4 acid digestion of a 0.4g subsample of the pulverized material.  Blank, standard and duplicate samples are used for quality assurance and quality control.

Cautionary Note Regarding Forward-Looking Information

This document may contain "forward-looking information" within the meaning of Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this document and Capstone Mining Corp. (the "Company") does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. 

Forward-looking statements relate to future events or future performance and reflect Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at http://www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward-looking statements.

For further information:
Capstone Mining Corp.
Cindy Burnett, VP, Investor Relations
Telephone: +1-604-637-8157
Email: cburnett@capstonemining.com

Website: http://www.capstonemining.com