Capstone Gold Corp.

Capstone Gold Corp.

August 16, 2005 10:00 ET

Capstone Begins 2,500 m Drill Program at its Copala Silver-Gold Project, Sinaloa State, Mexico

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 16, 2005) - Capstone Gold Corp. ("Capstone") (TSX:CSG) is pleased to announce that the Phase I, 2,500 m surface drill program has commenced on its Copala Project. Capstone plans to explore the Animas-Refugio vein peripheral to the historic workings of the San Carlos Mine with 14 holes drilled from surface. This program is expected to be completed in October 2005.

The Copala project (5,149 ha) is located 60 km ENE of the city of Mazatlan, and is easily accessible by a paved highway. There are several NW striking epithermal veins within the project over an E-W distance of 10 km. These veins have strike lengths varying from 2 to 4 km within the project. Exploration by the previous operator, Grupo Minero Bacis SA de CV ("Bacis") included mapping, underground and surface sampling, drifting and drilling. A total of 3,200 m of drilling by Bacis was completed on the Animas-Refugio vein structure producing drill intercepts of up to 11.8 g/t gold and 2,534 g/t silver over 3.2 m.

The San Carlos Mine workings have a strike length of 300 m and are developed over a vertical range of 125 m. Underground channel sampling by Bacis in the 1990's indicates that in the lowest levels of the mine, the Animas-Refugio vein averaged 4.5 m in true width and graded more than 2.5 g/t Au and 300 g/t Ag. The San Carlos Mine lies at the south end of a 2 km long section of the Animas-Refugio vein that has 3 other areas of historic underground workings within a contiguous block of claims controlled by Capstone.

In the San Carlos Mine area, the Animas-Refugio vein strikes N-S and dips at 60 degrees to the west. The quartz-pyrite vein is hosted by argillized and silicified quartz diorite. Topographically, the San Carlos Mine is the highest of 7 zones of historic mine workings on the Animas-Refugio vein. This fact, combined with the grades obtained by Bacis in the lowermost workings, has led Capstone management to believe that the silver-gold mineralization will extend to depth.

The following table (as previously reported in the Copala technical report dated December 10, 2003) summarizes the historic mineral resources for the Copala project from Bacis company records. Capstone must verify these resources before current mineral resources can be upgraded.

Grade Total Contained
----------- --------------------
Ag Au Ag Au
Tonnes g/t g/t Oz Oz
Measured & Indicated 719,220 246 1.9 5,264,769 41,595
Inferred 1,667,000 184 1.7 8,995,203 82,535
(1) Historic resources for the Bacis operations set out in this
table above have been prepared by Bacis.
(2) Bacis historic reserves have been converted to mineral
resources. Mineral reserves have not demonstrated economic
(3) Bacis historic proven and probable reserves and those
indicated by DDH have been converted to Measured and
Indicated Resources to conform with categories outlined in
NI-43-101 and have no current feasibility study. Until Bacis
historic resources are confirmed by Capstone, the historic
resources are not considered current and should not be relied
(4) Historic potential reserves, carried by Bacis, are converted
to Inferred Resources.

Capstone has an option to earn a 90% interest in the Copala Project subject to a 1.5% N.S.R.

Hugh Willson, Vice President of Exploration for Capstone and a qualified person under NI 43-101, has reviewed the contents of this news release.


Capstone is a mineral exploration company focused on the exploration and development of five advanced projects in Mexico. All of the projects have existing tonnage and grade defined by underground workings. Cozamin is the most advanced of these projects and is being readied for production in 2006. Capstone has approximately 40 million shares outstanding and is well financed with no long term debt. More information is available online at:


Darren M. Pylot, President & CEO

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