CAPT.V · 2022-01-13 12:00:00

Capitan Mining Drills 35.1m of 0.42 g/t AuEq Including 4.6m of 1.1 g/t AuEq and Has Entered into an Agreement to Buyback All Outstanding Royalties at the Penoles Project

Drill Results Royalties & Streams

Capitan Mining Drills 35.1m of 0.42 g/t AuEq

Including 4.6m of 1.1 g/t AuEq and Has Entered

into an Agreement to Buyback All Outstanding

Royalties at the Penoles Project

Vancouver, British Columbia--(Newsfile Corp. - January 13, 2022) -

Capitan Mining Inc.

(TSXV:

CAPT)

("Capitan" or the "Company")

is pleased to report results for six reverse-circulation (RC) drill

holes from the Capitan Hill oxide-gold deposit, at its 100%-owned Peñoles project in Durango, Mexico.

In addition, management is also pleased to report that after several months of negotiation they have

entered into a purchase agreement to acquire a portfolio of royalties including a 2% royalty on the

Capitan Gold oxide deposit from Exploraciones Altiplano.

Highlights:

Drillhole CARC 21-48:

returned

35.1m of 0.42 g/t Aueq

including

4.6m of 1.1 g/t Aueq

Extends mineralization 170m down-dip from hole 21-CARC-25 on cross section -100

Royalty Buyback

Total purchase price of royalty portfolio is US $1.0M over two years, payable in

cash and shares

The Altiplano royalty portfolio included a 2% net smelter royalty (NSR) on the Capitan Hill oxide-

gold deposit

Any shares issued to Altiplano are subject to right of first refusal (ROFR) allowing Capitan to

market and place shares with investors if Altiplano elects to sell

This transaction with Altiplano in combination with Capitan's contractual option to retire Riverside

Resources 1% royalty for C$250,000

will leave the Peñoles project royalty free and will

enhance overall project economics for investors

Drilling to resume in late January following holiday break

Assays for 11 drill holes are pending

Royalty Purchase Agreement

Capitan Mining has entered into a purchase agreement to acquire all outstanding net smelter royalties

(NSR's) on mining claims in the Peñoles project from Exploraciones del Altiplano, a private Mexican

exploration company. The royalties covered a number of targets including the current gold-silver

resource areas of Capitan and Jesús María. This included a 2% NSR on the Capitan Hill claims, 0.75%

on claims covering the Jesús María, San Rafael, Pinchazo and Capitan 2 targets and 0.5% on third-party

claims surrounding these targets.

The total consideration for the transaction is US$1.0M, which will be

paid 50% in cash and 50% in Capitan shares over a staged 2-year payment schedule.

Capitan will also

retain a right of first refusal (ROFR) on any shares distributed to Altiplano as consideration for the royalty

purchase; allowing the company the opportunity to place Altiplano's shares, upon written notice from

Altiplano of their intentions to sell.

In addition to the royalties held by Altiplano, the Peñoles project has a 1% royalty owned by Riverside

Resources which was created as part of the asset spinout in 2020. Capitan has the contractual option to

purchase and retire the Riverside royalty for C$250,000 at any time.

Capitan's CEO, Alberto Orozco, stated: "

We are very happy to have completed the purchase of the

Peñoles project royalty portfolio from Exploraciones Altiplano. This agreement paves the way for the

project to be royalty-free and will benefit all shareholders going forward, as we evaluate the economics

of the Capitan Hill oxide-gold deposit."

Exploration update: Capitan Hill Oxide-Gold Deposit

The results for the final 6 holes of the 2021 Phase 2 drill program at the Capitan Hill oxide-gold deposit

are presented below. These drillholes consisted of both step-out drill holes located in the central and

southeastern portion of the deposit as well as one infill hole located in the western portion of the deposit.

Central and Southeast Step-out Holes

Holes 21-CARC-44, 46, 47, 48 and 49 tested the down-dip extension of the Capitan zone in the central

and southeast portion of the deposit, to extend both the Capitan main and Hanging wall zones to the

south.

Hole-21-CARC 48, was a 170m step-out on section -100, and was successful in extending

mineralization on that respective section. The hole returned several, narrow, low-grade intervals over the

first 200m of the hole, similar to adjacent holes that are on-strike and up-dip. Of particular significance,

the hole returned the highest-grade interval to date in the southeastern portion of the Capitan deposit

returning

35.1m of 0.42 g/t Aueq, including 4.6m of 1.1g/t Aueq

. This interval occurred just before the

hole terminated and is the deepest intersection of higher-grade mineralization to date at Capitan Hill.

This intersection also supports the hypothesis that the holes above, may not have been drilled deep

enough (zone was displaced to depth), given the position of mineralized interval in hole 21-CARC-48.

(See Figures 1 & 2)

Holes 21-CARC-44, 46, 47, and 49 were large step-out holes located on sections 100, -250, 200, and

000 respectively. These step-out holes were drilled between 75 and 175m down-dip from the previous

holes on their respective sections. In general, these holes returned relatively narrow, low-grade intercepts

that did not correlate well with mineralization returned in previous drilling located up-dip (see Table 1

below). Given that the holes above were all drilled in the same vicinity as one another, it is interpreted

that there may be some displacement of the main zone down-dip, possibly related to the Santa Theresa

fault, which the holes crossed before they reached their target depth.

Of note: the above holes were

terminated due to the depth capacity of the rig, and ground conditions.

Figure 1: 2020-2021 Drill Hole Map at Capitan Hill Oxide-Gold Deposit

To view an enhanced version of Figure 1, please visit:

https://orders.newsfilecorp.com/files/7373/109975_e1147abb14e6e867_002full.jpg

Figure 2: Cross Section

To view an enhanced version of Figure 2, please visit:

https://orders.newsfilecorp.com/files/7373/109975_e1147abb14e6e867_003full.jpg

Strategic Infill

Hole 21-CARC-45 is located on section 350 and was designed to twin a historic diamond drill hole that

was not sampled adequately. The hole intersected both the Hanging Wall and Capitan Main zone and

returned width and grades typical of the mineralization in that area. In total, 74.7m of gold mineralization

was encountered at the Capitan Main Zone in two separate intervals, with the best interval returning

44.2m at 0.28 g/t Aueq.

Summary of Phase 2 Program

The 2021 Phase 2 drill program was focused on testing and expanding the continuity of oxide gold

mineralization at the Capitan Hill deposit, to better define the boundaries of both the Capitan Main Zone,

and the more poorly defined Hanging Wall Zone.

Step-out drilling during the 2021 Phase 2 program, has significantly expanded the footprint of both the

Hanging Wall and Capitan Main zone compared to the 2020 envelope (See Figure 3).

Additionally, infill

drilling has helped to define higher-grade shoots within the lower grade envelope in the central and

western portions of the deposit.

The Phase 2 program totals include 6,036m of drilling completed in 21 RC drillholes, bringing the total

amount of drilling by Capitan to 12,208m.

Drilling continues at Capitan's Penoles project and

management will provide guidance in a separate press release in the coming week.

Figure 3a: Expansion of mineralization at the Capitan Hill oxide-gold deposit (3D View)

To view an enhanced version of Figure 3a, please visit:

https://orders.newsfilecorp.com/files/7373/109975_e1147abb14e6e867_004full.jpg

Figure 3b: Expansion of mineralization at the Capitan Hill oxide-gold deposit (3D View)

To view an enhanced version of Figure 3b, please visit:

https://orders.newsfilecorp.com/files/7373/109975_e1147abb14e6e867_005full.jpg

Top Image (3a):

Historic (Pre-2020) Drillhole Locations, showing >0.25 g/t Au Isosurface Outline and

Dimensions.

Bottom image (3b):

Historic and 2020-21 Drillhole Locations, with current >0.25 g/t Au Isosurface

Outline and Dimensions.

Table 1. Table of Drill Results (Holes 44-49)

Hole Name

Az.

Dip

Section

Zone

From (m)

To (m)

Interval

(m)

AuEq (g/t)

Au (g/t)

Ag (g/t)

OX-SUL

21-CARC-44

Interval

100

Capitan Main

79.2

82.3

3.0

0.11

NSV**

21-CARC-45

Interval

350

Hanging Wall

7.6

21.3

13.7

0.14

NSV**

Interval

Hanging Wall

25.9

44.2

18.3

0.17

NSV**

Interval

Capitan Main

114.3

144.8

30.5

0.22

0.18

2.73

Interval

Capitan Main

155.4

199.6

44.2

0.28

0.21

5.79

MIX

21-CARC-46

Interval

-250

Hanging Wall

0.0

13.7

0.16

NSV**

Interval

Hanging Wall

19.8

22.9

3.0

0.11

NSV**

21-CARC-47

Interval

200

Capitan Main

236.2

239.3

3.0

0.25

0.24

1.15

Interval

Capitan Main

254.5

271.3

16.8

0.28

0.25

2.46

21-CARC-48

Interval

-100

Hanging Wall

38.1

44.2

6.1

0.13

NSV**

Interval

Hanging Wall

48.8

54.9

6.1

0.12

NSV**

Interval

Hanging Wall

97.5

105.2

7.6

0.12

NSV**

Interval

Capitan Main

157.0

160.0

3.0

0.12

NSV**

Interval

Capitan Main

169.2

173.7

4.6

0.19

NSV**

Interval

Capitan Main

198.1

202.7

4.6

0.12

NSV**

Interval

Capitan Main

211.8

228.6

16.8

0.17

NSV**

Interval

Capitan Main

249.9

266.7

16.8

0.19

0.16

2.04

Interval

Capitan Main

280.4

315.5

35.1

0.42

0.39

2.58

MIX

including

Capitan Main

288.0

292.6

4.6

1.10

1.08

1.83

including

Capitan Main

297.2

301.8

4.6

0.72

0.70

1.90

21-CARC-49

Interval

Hanging Wall

42.7

45.7

3.0

0.29

NSV**

Note: Only drill intercept lengths are reported in the table. Drill holes are designed to cut the

mineralized zones as close to true width as possible, with true widths ranging from 70-95% of the

reported drilled length.

* Gold equivalent calculated at 80:1 ratio

**No significant values.

Qualified Person & QA/QC:

The scientific and technical data contained in this news release pertaining to the Peñoles Project was

reviewed and approved by Marc Idziszek, P.Geo, a non-independent qualified person to Capitan Mining,

who is responsible for ensuring that the technical information provided in this news release is accurate

and who acts as a "qualified person" under National Instrument 43-101 Standards of Disclosure for

Mineral Projects.

Capitan Mining Inc. has a Quality Assurance/Quality Control program that includes insertion and

verification of control samples including standard reference material, blanks and duplicates consistent

with industry standards.

RC drill samples from the Peñoles Project are collected and split at the drill site using a Gilson Universal

Splitter. The samples are stored in either plastic bags (dry) or micropore bags (wet) and secured with

plastic zip-ties and then transported to the preparation laboratory of Bureau Veritas in Hermosillo,

Sonora. The sample pulps are then transported to the Bureau Veritas' laboratory in Vancouver, where

they are assayed for gold by fire assay with atomic absorption finish (FA430 assay method code; 0.005

to 10 ppm detection limit). Samples over 10 ppm Au are assayed with gravimetric finish (Assay code

FA530). All samples are also assayed by ICP-ES (code AQ300) for a suite of 33 elements.

All summarized intervals reported in this press release were calculated using a 0.10 ppm Au cut-off

grade. Intervals contain no more than 3 metres of internal dilution. High grades have not been capped.

About Capitan Mining Inc.:

Capitan Mining is a well-funded junior exploration company focused on its 100% owned gold and silver

Peñoles Project in Durango, Mexico. The company is led by a management team that has successfully

advanced and developed several heap leach operations in Mexico over the past 16 years. More

information for the Company can be found at

www.capitanmining.com

ON BEHALF OF CAPITAN MINING INC.

"Alberto Orozco"

Alberto Orozco, CEO

For additional information contact:

Alberto Orozco

CEO

Capitan Mining Inc.

[email protected]

Phone: (778) 327-6671

Fax: (778) 327-6675

Web:

www.capitanmining.com

Raffi Elmajian

Corporate Communications

Capitan Mining Inc.

[email protected]

Phone: (604) 358-2601

Web:

www.capitanmining.com

Certain statements in this press release may be considered forward-looking information. These

statements can be identified by the use of forward-looking terminology (e.g., "expect"," estimates",

"intends", "anticipates", "believes", "plans"). Such information involves known and unknown risks --

including the availability of funds, the results of financing and exploration activities, the interpretation

of exploration results and other geological data, or unanticipated costs and expenses and other risks

identified by Capitan in its public securities filings that may cause actual events to differ materially

from current expectations. Readers are cautioned not to place undue reliance on these forward-

looking statements, which speak only as of the date of this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the

policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this

release.

To view the source version of this press release, please visit

https://www.newsfilecorp.com/release/109975

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