Capstone Mining Corp.
TSX : CS

Capstone Mining Corp.

January 17, 2008 07:00 ET

Capstone Provides 2008 Expansion and Exploration Plans and Increases Production Forecasts for 2008 and 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 17, 2008) - Capstone Mining Corp. ("Capstone") (TSX:CS) is pleased to report its 2008 expansion and exploration plans and budgets for the Cozamin mine located in Zacatecas State, Mexico. All dollar amounts are stated in U.S. dollars unless otherwise stated.

MINE EXPANSION

Capstone is pleased to report it has started the expansion of the Cozamin mine from the current rate of 2,200 tonnes per day ("tpd") or 750,000 tonnes per year ("tpy") to 3,000 tpd or approximately 1 million tpy, a 36% increase in production. This expansion is expected to be completed by September 2008 at a total budgeted cost of $9.5 million (including a 15% contingency). The major areas of the expansion include the following; a new larger production ramp will be driven from surface down to the internal level 8 decline ramp within the mine (approximately 1,400m). The internal ramps from level 8 to 12 level will be enlarged and the underground crusher will be moved to a new dump pocket at level 11.5. This larger production ramp will provide the required additional ore haulage capacity and will compliment the 2,000 tpd shaft as well as allowing larger sized trucks to transport ore to surface. The cost of the ramp and equipment is estimated to be $4.0 million. A new 115kV high tension power line and substation will be constructed to supply up to 7.5mW to the mine. A 1.5mW generator will also be added to provide additional power to the mine before power line completion and will be used as an emergency power supply in the future when power outages occur. The upgrade in power is estimated to cost $3.6 million. Modifications within the plant include increasing belt sizes within the crushing area and larger floatation cells to handle the increase in concentrates. This is estimated to cost $1.2 million. An additional 6m lift will be added to the tailings dam at a cost of $700,000.

PRODUCTION FORECAST

As a result of the expansion to 3,000 tpd, Capstone is revising upward its 2008 and 2009 metal production forecast as follows;



------------------------------------------------
2008F 2009F
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Tonnes milled 850,000 1,000,000
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Copper (payable lbs) 30,000,000 40,000,000
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Silver (payable ozs) 1,300,000 1,500,000
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Zinc (payable lbs) 9,000,000 10,000,000
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Lead (payable lbs) 5,100,000 5,000,000
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EXPLORATION

A total of 18,000m of underground drilling and 650m of underground drifting are planned within the Cozamin mine. This drilling will be to upgrade existing inferred resources to the measured and indicated categories as well as to continue to explore to depth. This 2008 program is budgeted to cost $2.5 million (including a 15% contingency).

An additional 6,500m will be drilled from surface to explore the Mala Noche vein along strike and outside of the current resource area. The program is budgeted at $1.7 million (including a 15% contingency).

Robert B. Barnes, P.Eng, Vice President of Operations for Capstone and a qualified person under NI 43-101, has reviewed and approved the contents of this news release.

ABOUT CAPSTONE

Capstone is a Canadian based mining company currently operating the 100% owned Cozamin copper-silver-lead-zinc mine located in Zacatecas State, Mexico. Capstone has approximately 81.4 million shares outstanding and is well financed with no bank debt. More information is available online at: www.capstonemining.com.

This press release contains "forward-looking information" that is based on Capstone's current expectations, estimates, forecasts and projections. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Capstone's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: projected sales or production rates; uncertainties related to drilling results; the ability to raise sufficient capital to fund exploration; changes in economic conditions or financial markets; changes in prices for costs; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological or operational difficulties or inability to obtain permits encountered in connection with exploration activities; and labor relations matters.

This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Capstone disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.

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