Capstone Enters into Exploration Access Agreement with BHP Copper Inc. for Copper Cities Project
January 20, 2022
Capstone Enters into Exploration Access Agreement with BHP Copper Inc. for
Copper Cities Project
Vancouver, British Columbia - Capstone Mining Corp. (“Capstone” or the “Company” ) (TSX:CS) is pleased to
announce that it has entered into an 18-month access agreement to conduct drill and metallurgical test work at BHP
Copper Inc.’s (“BHP”) Copper Cities project (“Copper Cities”) located 10 km east of the Pinto Valley Mine (“Pinto
Valley”).
Darren Pylot, Capstone’s CEO commented, “I am excited that we have started test work on a property neighbouring
our flagship Pinto Valley operation”. Mr. Pylot added, “Historic drill data from over 300 holes suggest a shallow
copper target and a potentially low strip ratio pointing to a significant development opportunity”.
Brad Mercer, Capstone’s SVP Strategic Projects and Exploration said, “We believe Copper Cities is geologically a
mirror image of Pinto Valley with the same host rocks and age. Our plan currently underway calls for a $6.7 million
two phase drill program aim ed at twinning historical drill holes and to select a portion of these for metallurgical
testing. Discussions between Capstone and BHP are at an early stage”.
About Copper Cities Project
Copper Cities was developed in the 1950s as a part of America’s national effort to increase copper production to
support the war effort in Korea. The operations included open pit mining, concentrating and leaching of copper ores.
The mining and milling concluded in 1978 while leaching continued until 1982 when the site closed. Over the mine
life according to USGS records, a total of 68.7 million tonnes of ore was milled at an estimated feed grade of
approximately 0.66% with production of 895 million pounds of copper including 75 million pounds of copper cathode.
Figure 1 – Pinto Valley District Map
Pinto Valley and Carlota are the only producing mines in the District
NEWS RELEASE
TSX:CS ● capstonemining.com
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Drilling Underway at Copper Cities – November 2021
ABOUT CAPSTONE MINING CORP.
On November 30, 2021, Capstone Mining and Mantos Copper announced that they have entered into a definitive
agreement to combine pursuant to a plan of arrangement under the Business Corporations Act (British Columbia).
Upon completion of the Transaction, the new Company would be renamed Capstone Copper C orp. (Capstone
Copper).
Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. We are committed to the
responsible development of our assets and the environments in which we operate. Our two producing mines are
the Pinto Valley copper mine located in Arizona, US and the Cozamin copper -silver mine in Zacatecas State,
Mexico. In addition, Capstone owns 100% of Santo Domingo, a large scale, fully permitted, copper-iron-gold project
in Region III, Chile, as well as a portfolio of exploration properties. Capstone's strategy is to focus on the optimization
of operations and assets in politically stable, mining -friendly regions, centred in the Americas. Our headquarters
are in Vancouver, Canada and we are listed on the Toronto Stock Exchange (TSX) under the symbol CS.
Further information is available at www.capstonemining.com.
For further information please contact:
Jerrold Annett, SVP, Strategy and Capital Markets
647-273-7351
Kettina Cordero, Director, Investor Relations and Communications
604-262-9794
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This document may contain “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements”
within the meaning of the United States Private Securities Litigation Reform Act o f 1995 (collectively, “forward -looking statements”). These
forward-looking statements are made as of the date of this document and the Company does not intend, and does not assume any obligati on,
to update these forward-looking statements, except as required under applicable securities legislation.
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Forward-looking statements relate to future events or future performance and reflect our expectations or beliefs regarding future events and the
impacts of the ongoing and evolving COVID -19 pandemic. Forward-looking statements include, but are not limited to, statements with respect
to the estimation of Mineral Resources and Mineral Reserves, the timing and success of our use of the Jetti Technology, the expected timing
of a purchase agreement and 43-101 report for Copper Cities, the anticipated low strip ratio, the development potential of Copper Cities including
the expected geological make-up, the timing and success of exploration under the Copper Cities Access Agreement, the the timing and amount
of estimated future production, costs of production and capital expenditures and reclamation, the success of our mining operations, the success
of mineral exploration, the estimations for potential quantities and grade of inferred resources and exploration targets, Capstone’s ability to fund
future exploration activities, Capstone’s ability to finance the Santo Domingo project, Capstone's ability to find a strategic partner, environmental
risks, unanticipated reclamation expenses and title disputes. The potential effects of the COVID -19 pandemic on our business and operations
are unknown at this time, including Capstone’s ability to manage challenges and restrictions arising from COVID-19 in the communities in which
Capstone operates and our ability to continue to safely operate and to safely return our business to normal operations. The i mpact of COVID-
19 to Capstone is dependent on a number of factors outsi de of our control and knowledge, including the effectiveness of the measures taken
by public health and governmental authorities to combat the spread of the disease, global economic uncertainties and outlook due to the disease,
and the evolving restrictions relating to mining activities and to travel in certain jurisdictions in which we operate.
In certain cases, forward-looking statements can be identified by the use of words such as “anticipates”, “approximately”, “believes”, “budget”,
“estimates”, expects”, “forecasts”, “guidance”, intends”, “plans”, “scheduled”, “target”, or variations of such words and phrases, or statements
that certain actions, events or results “be achieved”, “could”, “may”, “might”, “occur”, “should”, “will be taken” or “would” or the negative of these
terms or comparable terminology. In this document certain forward-looking statements are identified by words including “anticipated”, “expected”,
“guidance” and “plan”. By their very nature, forward -looking statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performan ce or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such factors include, amongst others, risks related to inherent hazards associated with
mining operations and closure of mining projects, future prices of copper and other metals, compliance with financial covenants, surety bonding,
our ability to raise capital, Capstone’s ability to acquire properties for growth, counterparty risks associated with sales of our metals, use of
financial derivative instruments and associated counterparty risks, foreign currency exchange rate fluctuations, market acces s restrictions or
tariffs, changes in general economic conditions, availability of water, accuracy of Mineral Resource and Mineral Reserve estimates, operating
in foreign jurisdictions with risk of changes to governmental regulation, compliance with governmental regulations, complianc e with
environmental laws and regulations, reliance on approvals, licenses and p ermits from governmental authorities and potential legal challenges
to permit applications, contractual risks including but not limited to, our ability to meet the completion test requirements under the Cozamin Silver
Stream Agreement with Wheaton Precious Metals, our ability to meet certain closing conditions under the Santo Domingo Gold Stream
Agreement with Wheaton Precious Metals, acting as Indemnitor for Minto Exploration Ltd.’s surety bond obligations post divest iture, impact of
climate change and changes to climatic conditions at our Pinto Valley and Cozamin operations and Santo Domingo project, changes in regulatory
requirements and policy related to climate change and greenhouse gas ("GHG") emissions, land reclamation and mine closure obligations, risks
relating to widespread epidemics or pandemic outbreak including the COVID-19 pandemic; the impact of COVID-19 on our workforce, suppliers
and other essential resources and what effect those impacts, if they occur, would have on our business, including our ability to access goods
and supplies, the ability to transport our products and impacts on employee productivity, the risks in connection with the op erations, cash flow
and results of Capstone relating to the unknown duration and impact of the COVID-19 pandemic, uncertainties and risks related to the potential
development of the Santo Domingo project, increased operating and capital costs, increased cost of reclamation, challenges to title to our
mineral properties, increased taxes in jurisdictions the Company operates or is subject to tax, changes in tax regimes we are subject to and any
changes in law or interpretation of law may be difficult to react to in an efficient manner, maintaining ongoing social licen se to operate,
dependence on key management personnel, potential conflicts of interest involving our directors and officers, corruption and bribery, limitations
inherent in our insurance coverage, labour relations, increasing energy prices, competition in the mining industry including but not limi ted to
competition for skilled labour, risks associated with joint venture partners, our ability to integrate new acquisitions and n ew technology into our
operations, cybersecurity threats, legal proceedings, the volatility of the price of the Common Share s, the uncertainty of maintaining a liquid
trading market for the Common Shares, risks related to dilution to existing shareholders if stock options or other convertibl e securities are
exercised, the history of Capstone with respect to not paying dividends and anticipation of not paying dividends in the foreseeable future, and
sales of Common Shares by existing shareholders can reduce trading prices, and other risks of the mining industry as well as those factors
detailed from time to time in the Company’s interim and annual financial statements and MD&A of those statements and Annual Information
Form, all of which are filed and available for review under the Company’s profile on SEDAR at www.sedar.com. Although the Com pany has
attempted to identify important factors that could cause our actual results, performance or achievements to differ materially from those described
in our forward -looking statements, there may be other factors that cause our results, performance or achievements not to be as anticipated,
estimated or intended. There can be no assurance that our forward -looking statements will prove to be accurate, as our actual results,
performance or achievements could differ materially from those anticipated in such statements. Accordingly, readers shou ld not place undue
reliance on our forward-looking statements.
CAUTIONARY NOTE TO UNITED STATES INVESTORS REGARDING PRESENTATION OF MINERAL RESERVE AND MINERAL
RESOURCE ESTIMATES
As a British Columbia corporation and a “reporting issuer” under Canadian sec urities laws, we are required to provide disclosure regarding our
mineral properties in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). NI 43-
101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific
and technical information concerning mineral projects. In accordance with NI 43-101, we use the terms mineral reserves and resources as they
are defined in accordance with the CIM Definition Standards on mineral reserves and resources (the “CIM Definition Standards”) adopted by
the Canadian Institute of Mining, Metallurgy and Petroleum. In particular, the terms “mineral reserve”, “proven mineral reserve”, “probable mineral
reserve”, “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” used in this news
release and the documents incorporated by reference herein and therein, are Canadian mining terms defined in accordance with CIM Definition
Standards. These definitions differ from the definitions in the disclosure requirements promulgated by the SEC. Accordingly, information
contained in this news release and the documents incorporated by reference herein may not be comparable to similar information made public
by U.S. companies reporting pursuant to SEC disclosure requirements.
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United States investors are also cautioned that while the SEC will now recognize “measured mineral resources”, “indicated min eral resources”
and “inferred mineral resources”, investors should not assume that any part or all of the mineralization in these categories will ever be converted
into a higher category of mineral resources or into mineral reserves. Mineralization described u sing these terms has a greater amount of
uncertainty as to their existence and feasibility than mineralization that has been characterized as reserves. Accordingly, investors are cautioned
not to assume that any “measured mineral resources”, “indicated min eral resources”, or “inferred mineral resources” that we report are or will
be economically or legally mineable. Further, “inferred resources” have a greater amount of uncertainty as to their existence and as to whether
they can be mined legally or economically. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred
resources exist. In accordance with Canadian rules, estimates of “inferred mineral resources” cannot form the basis of feasib ility or other
economic studies, except in limited circumstances where permitted under NI 43-101.
NATIONAL INSTRUMENT 43-101 COMPLIANCE
Unless otherwise indicated, Capstone has prepared the technical information in this news release (“Technical Information”) based on information
contained in the technical reports, Annual Information Form and news releases (collectively the “Disclosure Documents”) avail able under
Capstone Mining Corp.’s company profile on SEDAR at www.sedar.com. Each Disclosure Document was prepared by or under the supervision
of a qualified person (a “Qualified Person”) as defined in National Instrument 43 -101 – Standards of Disclosure for Mineral Projects of the
Canadian Securities Administrators (“NI 43 -101”). Readers are encouraged to review the full text of the Disclosure Documents which qualifies
the Technical Information. Readers are advised that Mineral Resources that are not Mineral Reserves do not have demonstrated economic
viability. The Disclosure Documents are each intended to be read as a whole, and sections should not be read or relied upon out of context. The
Technical Information is subject to the assumptions and qualifications contained in the Disclosure Documents.
Disclosure Documents include the National Instrument 43 -101 compliant technical reports titled "NI 43 -101 Technical Report on the Cozamin
Mine, Zacatecas, Mexico" effective October 23, 2020, “NI 43-101 Technical Report on the Pinto Valley Mine, Arizona, USA” effective March 31,
2021 and “Santo Domingo Project, Region III, Chile, NI 43-101 Technical Report” effective February 19, 2020.
The disclosure of Scientific and Technical Information in this news release was reviewed and approved by Brad Mercer, P. Geol., SVP Strategic
Projects and Exploration (technical information related to mineral exploration activities and to Mineral Resources at Cozamin), Clay Craig, P.Eng,
Manager, Mining & Evaluations (technical information related to Mineral Reserves and Mineral Resources at Pinto Valley), Tuck er Jensen,
Superintendent Mine Operations, P.Eng (technical information related to Mineral Reserves at Cozamin) and Albert Garcia III, PE, Vice President,
Projects (technical information related to project updates at Santo Domingo) all Qualified Persons under NI 43-101.