VANCOUVER, British Columbia, August 8, 2013 /PRNewswire/ --
Capstone Mining Corp. ("Capstone") (TSX: CS) is pleased to announce that it has entered into an option agreement (the "Option") with Sociedad Química y Minera de Chile S.A. ('SQM") to earn up to 70% of a property, Project Providencia (the "Property"). The initial option is on 350,000 hectares (3,500 square kilometres) in Chile's II Region and would be reduced overtime to a maximum of 50,000 hectares if a joint venture is formed.
The Property is located 50 kilometres east of the city of Taltal, approximately half way between Capstone's Santo Domingo Project and Anglo American's Mantos Blancos copper mine. It rests at a mean elevation of 1,800 metres above sea level, with mostly gentle topography and it benefits from the Pan-American Highway cutting through the centre of the block.
Due to the unique nature of SQM's core business as a producer of specialty fertilizers and inorganic industrial chemicals, significant portions of the large Property in the Cretaceous belt have been exclusively held by SQM for decades for the value of their surface deposits of nitrates and iodine, among other minerals. The Property has seen little to no modern exploration for bedrock hosted, metallic mineral deposits, or even comprehensive geological mapping, prospecting and geophysical surveying, despite being centrally located in one of the world's largest copper mining districts. Capstone's strategy will be to cover the very large holding with several state-of-the-art airborne, remote sensing technologies to identify discrete anomalies or areas of prospectively for more detailed ground follow-up.
"Capstone's strategic goal is to expand its asset base and selectively add to our portfolio of exploration projects in the Americas," said Brad Mercer, Sr. Vice President, Exploration of Capstone. "This is an excellent opportunity to look at a very large under-explored land package in the world's most prolific copper jurisdiction, with an option to make a more significant investment in stages if exploration results warrant. The proximity to Capstone's Santo Domingo Project and other copper mines offers potential synergies should exploration prove successful. "
"Capstone geologists believe that the property is prospective for a variety of styles of mineralization, including iron oxide-copper-gold ("IOCG"), porphyry copper and Mantos Blancos type. Activities will be led by our Chilean geology team who were instrumental in the discovery of Santo Domingo IOCG deposit," he added.
Terms of the Agreement
Capstone has paid SQM US$1million upon signing and will immediately commission a high resolution, combined magnetic and radiometric airborne survey over the block. Both surveys will be useful in providing a basic geological framework from which to start exploration but the magnetic survey will be particularly useful in identifying anomalies of interest since the principal target is a magnetite rich IOCG deposit, similar to Santo Domingo.
Capstone will be the operator of the project and may earn up to a 70% interest in the Property over 7.5 years in incremental steps by spending on exploration and land holding costs. There are three options that may be exercised at Capstone's sole discretion. At any time during the term of the agreement, Capstone has the right to withdraw from the project, whereby the agreement will terminate and management of the project will return to SQM.
About Capstone Mining Corp.
Capstone Mining Corp. is a Canadian base metals mining company, committed to the responsible development of our assets and the environments in which we operate. We are preferentially focused on copper, with two producing copper mines, the Cozamin copper-silver-zinc-lead mine located in Zacatecas State, Mexico and the Minto copper-gold-silver mine in Yukon, Canada. In addition, Capstone has two development projects, the large scale 70% owned Santo Domingo copper-iron-gold project in Chile in partnership with Korea Resources Corporation and the 100% owned Kutcho copper-zinc-gold-silver project in British Columbia, as well as exploration properties in Canada, Chile, Mexico and Australia. Using our cash flow and strong balance sheet as a springboard, Capstone aims to grow with continued mineral resource and reserve expansions, exploration, and through acquisitions in politically stable, mining-friendly regions. Our headquarters are in Vancouver, Canada and we are listed on the TSX. Further information is available at http://www.capstonemining.com.
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 success of exploration activities, 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", "outlook", "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. In this document certain forward-looking statements are identified by words including "scheduled", "plan", "planned", "estimated", "projections", "projected" and "expected". 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; accidents; dependence on key personnel; labour pool constraints; labour disputes; availability of infrastructure required for the development of mining projects; delays in obtaining governmental approvals or financing; and other risks of the mining industry 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:
Cindy Burnett, VP, Investor Relations and Communications
SOURCE Capstone Mining Corp.