Capstone Mining Corp.
TSX : CS

Capstone Mining Corp.

February 18, 2009 07:00 ET

Capstone Announces Updated Mineral Resources Estimates for the Cozamin Copper Mine, Mexico

7.8 million tonnes Measured and Indicated Resources at a Copper Grade of 2.0% Plus By-products

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 18, 2009) - Capstone Mining Corp. (TSX:CS) today announced an updated, independent NI43-101 compliant mineral resource estimate for the Cozamin Mine in Zacatecas State, Mexico. This estimate includes the results of an extensive in-fill and step out drill program completed in 2008 designed to expand and upgrade the previously announced mineral resources, and includes mineral resources not only for the principal San Roberto area of the Cozamin mine, but also a first time estimate for the newly defined San Rafael area, approximately 500m along strike to the east of San Roberto.

Capstone commenced mining the San Roberto deposit in 2006. Since commercial production began, 1.58 million tonnes have been mined at an average grade of 1.62% copper, 0.57% lead, 1.39% zinc and 68g/t silver. In 2008, Capstone diamond drilled 39,430m in 131 holes on the Cozamin project. Most of these holes were targeted on the San Roberto deposit but also in the San Rafael area, a newly defined deposit about 500 metres to the east. Robert Sim, P.Geo., of Sim Geological Inc., completed the updated resource estimate for the San Roberto deposit and the first estimate for the San Rafael deposit. Summaries of these estimates are presented below, while additional details are attached.



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Cozamin Mine - San Roberto Area Mineral Resource Estimate at a 1.15%
Copper Cut-Off (1)

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Grade Contained Metal
---------------------------- --------------------------------
Cop-
per Zinc Lead Sil-
Cop- Sil- (mill- (mill- (mill- ver Gold
Tonnes per Zinc Lead ver Gold ions ions ions (000s (000s
Class (000's) (%) (%) (%) (g/t) (g/t) lbs) lbs) lbs) oz) oz)
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Meas-
ured
(M) 1,749 2.35 1.01 0.41 86.0 0.063 90.6 38.9 15.7 4,833 3.5
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Indi-
cated
(I) 6,077 1.90 1.20 0.25 63.0 0.063 255.0 160.2 34.0 12,313 12.3
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M & I 7,826 2.00 1.15 0.29 68.2 0.063 345.6 199.1 49.7 17,148 15.9
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Infer-
red 1,100 1.58 0.95 0.17 52.5 0.065 38.4 23.0 4.1 1,856 2.3
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Cozamin Mine - San Rafael Area Mineral Resource Estimate at a 3.0% Zinc
Cut-Off (1)

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Grade Contained Metal
---------------------------- --------------------------------
Cop-
per Zinc Lead Sil-
Cop- Sil- (mill- (mill- (mill- ver Gold
Tonnes per Zinc Lead ver Gold ions ions ions (000s (000s
Class (000's) (%) (%) (%) (g/t) (g/t) lbs) lbs) lbs) oz) oz)
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Meas-
ured
(M) - - - - - - - - - - -
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Indic-
ated
(I) 1,467 0.23 3.64 0.47 38.3 0.482 7.6 117.6 15.0 1,806 22.7
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M & I 1,467 0.23 3.64 0.47 38.3 0.482 7.6 117.6 15.0 1,806 22.7
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Infer-
red 556 0.14 3.55 0.57 35.8 0.609 1.7 43.5 7.0 641 10.9
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(1) Numbers may not total due to rounding


"The updated resource estimate for the Cozamin demonstrates the robust nature of the deposit," said Stephen P. Quin, President & COO of Capstone. "Overall resources have increased since the last estimate, despite mining more than 1.5 million tonnes since operations commenced. Further, the first time definition of resources at San Rafael, a new deposit 500m east of the main San Roberto area, is encouraging since it indicates the potential for additional resource definition along the extensive main structure, which has been traced along 5.5km of strike. While San Rafael is more zinc-rich, the upper portions of the San Roberto zone were similarly zinc-rich, before transitioning into copper-rich mineralization below," he said. "We are now focusing on the development of a new life-of-mine plan for the Cozamin mine based on this resource update, with the objective of maximizing the resource to reserve conversion. We anticipate completing the mine plan around mid-2009."

Mineral Resource Estimates

The mineral resource estimates for the Cozamin deposits were completed by independent consultant Robert Sim, P.Geo., of SIM Geological Inc., using accepted, industry standard, methods that conform with National Instrument 43-101. The resource model has been developed using MineSight® (v4.50).

Drilling completed in 2008 has been successful in upgrading a high proportion of the resource at Cozamin into the measured and indicated mineral resource categories. This drilling, and Capstone's experience mining the deposit, shows that the mineral resources display excellent continuity along strike and down dip.

The mineral resources at Cozamin are detailed by classification and at various cut-off grades in tables attached hereto.

Resource Estimation Methodology

The data and methodology utilized for the resource estimate is as follows:

- The resource model has been generated from a database containing a total of 365 diamond drill (core) holes collared from surface as well as from a series of underground drill stations developed on the #8 level of the San Roberto mine workings. Drill holes have been oriented to intersect the mineralized zone at an average of 50m intervals in the majority of the San Rafael and San Roberto areas. Below an elevation of 1,900m (550m below surface), the drill hole spacing at San Roberto increases to an average of 200m. All drilling has been conducted from the hangingwall side of the deposit with pierce angle ranging from 45 to 90 degrees in relation to the plane of the mineralization. In addition to the drill hole data, there are a series of 2,681 chip-channels taken at approximately 4m intervals across the strike of the deposit in all development drifts in the San Roberto mine area.

- Drill hole samples have been analyzed for copper, zinc, lead, silver and gold at ALSChemex and SGS labs. Underground channel samples were analyzed at SGS early in the mine life and, more recently, at the Cozamin on site lab. All sample results are monitored with an appropriate QAQC program. Bulk density measurements have been conducted by site personnel on samples from 135 drill holes evenly spaced throughout the model area.

- The structural zone which hosts the mineralization at the Cozamin deposit has been interpreted using a combination of geology information and sample grade results in the drilling and channel data. This "mineral domain" strikes east-west for a distance of more than 3km, dips -60º to the north and extends from surface to a depth -900m. The thickness of the mineral domain ranges from several metres to over 20m, with an average thickness of about 7m (true).

- Sample data has been composited to 1m standard intervals. The presence of potential outlier sample data has been evaluated and appropriate thresholds have been applied for all elements in both the San Rafael and San Roberto areas.

- A nominal block size measuring 10m by 3m by 3m, with the long axis oriented parallel to the east-west strike of the zone, is considered appropriate with respect to the sample spacing and the scale of the deposit.

- Estimates for copper, zinc, lead, silver and gold are made in the block model using ordinary kriging. Estimates for bulk density are made using the inverse distance interpolation method. The results have been validated using several methods including extensive visual review with respect to the underlying data and comparisons with results produced using other interpolation methods.

- Mineral resources have been classified in accordance with the CIM definition standards for mineral resources and mineral reserves. The classification parameters are defined in relation to the distance to sample data and are intended to encompass zones of reasonably continuous mineralization.

Robert Sim P.Geo., of SIM Geological Inc., prepared the mineral resource estimate for the Cozamin deposit. Mr. Sim has reviewed pertinent geological information in sufficient detail to support the data incorporated in the resource estimate. Robert Sim P.Geo., an Independent Qualified Person as defined under National Instrument 43-101, is responsible for the resource estimate presented in this release.

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. There is also no certainty that these inferred mineral resources will be converted to measured and indicated mineral resource categories through further drilling, or into mineral reserves once economic considerations are applied.

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 and reviewed by Stephen P. Quin, P. Geo., President & COO for Capstone Mining Corporation and Robert Sim, P.Geo. of SIM Geological Inc., who is an Independent Qualified Person as defined by National Instrument 43-101 and is responsible for the resource estimate. The exploration activities at the Cozamin project site are carried out under the supervision of Hugh Willson, P. Geo., V.P. Exploration (Mexico) for Capstone.

Forward-Looking Statements

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

Forward-looking statements relate to future events or future performance and reflect management of the Company'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 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 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.

Details of Cozamin Mine Mineral Resource Estimates - San Roberto Area

To accompany Capstone Mining News Release Dated Feb. 18, 2009



Cozamin Mine - San Roberto Area by Classification and Cut-Off (1)
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Copper
Cut-off Tonnes Copper Zinc Lead Gold Silver
Classification (%) (000s) (%) (%) (%) (g/t) (g/t)
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Measured 0.5 2,287 2.00 1.10 0.43 0.068 79.2
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1.0 1,908 2.24 1.03 0.42 0.064 84.1
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1.15(2) 1,749 2.35 1.01 0.41 0.063 86.0
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1.5 1,373 2.63 0.96 0.37 0.061 90.0
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2.0 947 3.04 0.93 0.31 0.057 95.1
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2.5 616 3.48 0.94 0.24 0.056 99.0
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3.0 386 3.92 0.93 0.18 0.056 101.3
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Copper
Cut-off Tonnes Copper Zinc Lead Gold Silver
Classification (%) (000s) (%) (%) (%) (g/t) (g/t)
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Indicated 0.5 12,303 1.35 1.26 0.30 0.074 54.8
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1.0 7,296 1.76 1.21 0.27 0.065 61.2
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1.15(2) 6,077 1.90 1.20 0.25 0.063 63.0
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1.5 3,963 2.22 1.16 0.23 0.060 66.9
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2.0 2,091 2.67 1.12 0.21 0.056 72.8
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2.5 1,030 3.13 1.04 0.21 0.052 79.5
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3.0 490 3.59 0.94 0.21 0.050 87.1
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Copper
Cut-off Tonnes Copper Zinc Lead Gold Silver
Classification (%) (000s) (%) (%) (%) (g/t) (g/t)
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Inferred 0.5 4,782 0.95 1.06 0.21 0.073 42.4
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1.0 1,623 1.42 0.98 0.19 0.063 49.0
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1.15(2) 1,100 1.58 0.95 0.17 0.065 52.5
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1.5 504 1.93 1.03 0.18 0.071 62.4
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2.0 181 2.32 1.04 0.16 0.075 72.3
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2.5 41 2.75 0.88 0.15 0.076 73.4
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3.0 5 3.13 0.62 0.10 0.089 77.4
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(1) Numbers may not total due to rounding

(2) Base case


Details of Cozamin Mine Mineral Resource Estimates - San Rafael Area

To accompany Capstone Mining News Release Dated Feb. 18, 2009



Cozamin Mine - San Rafael Area by Classification and Cut-Off (1)
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Note: No Measured Resources in San Rafael deposit.

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Zinc
Cut-off Tonnes Zinc Copper Lead Gold Silver
Classification (%) (000s) (%) (%) (%) (g/t) (g/t)
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Indicated 2.0 3,431 2.97 0.21 0.40 0.441 33.8
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2.5 2,407 3.29 0.22 0.43 0.469 36.0
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3.0(2) 1,467 3.64 0.23 0.47 0.482 38.3
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3.5 720 4.07 0.25 0.50 0.489 41.4
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4.0 328 4.48 0.24 0.52 0.462 44.3
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4.5 135 4.87 0.24 0.56 0.468 47.5
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5.0 41 5.22 0.25 0.61 0.518 51.3
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Zinc
Cut-off Tonnes Zinc Copper Lead Gold Silver
Classification (%) (000s) (%) (%) (%) (g/t) (g/t)
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Inferred 2.0 2,642 2.61 0.09 0.37 0.436 24.0
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2.5 1,161 3.11 0.12 0.47 0.514 30.2
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3.0(2) 556 3.55 0.14 0.57 0.609 35.8
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3.5 256 3.92 0.14 0.65 0.675 39.5
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4.0 83 4.32 0.15 0.72 0.714 41.9
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4.5 19 4.76 0.17 0.81 0.709 45.4
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5.0 3 5.16 0.20 0.73 0.855 51.4
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(1) Numbers may not total due to rounding

(2) Base case


The TSX does not accept any responsibility for the adequacy or accuracy of this press release.

Contact Information

  • Capstone Mining Corp.
    Darren Pylot
    Vice Chairman & CEO
    (604) 684-8894 or 1-866-684-8894
    or
    Capstone Mining Corp.
    Stephen Quin
    President & COO
    (604) 684-8894 or 1-866-684-8894
    or
    Capstone Mining Corp.
    Chris Tomanik
    Investor Relations
    (604) 684-8894 or 1-866-684-8894
    or
    Capstone Mining Corp.
    Mark Patchett
    Investor Relations
    (604) 684-8894 or 1-866-684-8894
    Email: info@capstonemining.com
    Website: www.capstonemining.com