Capstone Mining Corp.

Capstone Mining Corp.

April 04, 2007 15:12 ET

Capstone Mining Closes Previously Announced Agreement to Sell Cozamin Silver Production to Silverstone Resources Corp.

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 4, 2007) - Capstone Mining Corp. ("Capstone") (TSX:CS) is pleased to announce that it has closed its previously announced agreement with Silverstone Resources Corp. ("Silverstone") whereby Capstone Mining has agreed to sell all of its silver production from the Cozamin mine in Mexico to a 100% owned subsidiary of Silverstone in consideration for an upfront payment of US$44 million plus a per ounce payment at a price equal to the lesser of (a) US$4.00 (subject to an inflationary adjustment after three years and yearly thereafter) and (b) the then prevailing market price per ounce of silver. The upfront payment is comprised of US$20 million payable in cash and US$24 million payable in 19,155,310 special warrants of Silverstone which are convertible into common shares at no additional cost.

Capstone Mining has agreed to deliver a minimum of 10 million ounces of silver to Silverstone over a 10 year period. The Cozamin copper, zinc, lead and silver mine is expected to produce approximately 1.2 million ounces of silver per year in addition to 30 million pounds of copper, 8.5 million pounds of zinc and 3 million pounds of lead annually at low cash costs. If at the end of the 10 year period, Capstone Mining has not delivered the agreed 10 million ounces, then it has agreed to pay to Silverstone US$1.00 per ounce of silver not delivered.

Capstone is also pleased to announce it has added Mr. Robert Barnes to the board of directors. Mr. Barnes is the Vice President of Operations and has over 30 years experience in the mining industry.

Capstone has elected to pay 679,080 common shares (the "Shares") to Grupo Minero Bacis, S.A. de C.V. the former owner of the cozamin mine, as set out in the Amended and Restated Option Agreement dated November 30, 2005. The Shares shall be subject to resale restrictions expiring June 28, 2007 and are the final obligation to Grupo Bacis for the purchase of the Cozamin mine. A 3% NSR is payable to Grupo Bacis on all concentrate produced from the Cozamin mine.


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 81.5 million shares outstanding and is well financed with no bank debt. More information is available online at:

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