Capstone Expands MNFWZ Vein 20 M&I Resource by 118% at Cozamin to 13.1 million tonnes at 2.35% Copper and 52 g/t Silver
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June 11, 2020
Capstone Expands MNFWZ Vein 20 M&I Resource by 118% at Cozamin to
13.1 million tonnes at 2.35% Copper and 52 g/t Silver
Vancouver, British Columbia - Capstone Mining Corp. (“Capstone” or the “Company”) (TSX:CS) announce s the
results of an updated Mineral Resource estimate for the Cozamin Mine in Zacatecas, Mexico. The total Measured
& Indicated (“M&I”) Resource Estimate tonnes increased by 66%, with an 83% increase to contained copper metal
to 949 million pounds and a 71% increase to contained silver metal to 39 million ounces of silver. M&I Resource for
Vein 20, the principal zone in the Mala Noche Footwall Zone (“MNFWZ”), increased by 118% to 13,086 kt at 2.35%
Cu and 52 g/t Ag. The Company is currently updating Mineral Reserves and an updated technical report is
expected in Q3 2020.
HIGHLIGHTS
Below is a table highlighting the changes of the new Mineral Resource Estimate, compared to December 31, 2019.
Measured & Indicated
Resource Estimate
As of April 30, 2020 Compared to as of December 31, 2019
Copper-Silver Zones
MNFWZ with Vein 20 defining
the “Principal Zone”
13,086 kt
2.35% Cu
52 g/t Ag
307.7 kt copper
21.9 million ozs silver
118% increase in tonnes
4% increase in copper grade
3% increase in silver grade
127% increase in contained copper metal
124% increase in contained silver ounces
All Veins 21,790 kt
1.92% Cu
46 g/t Ag
418.1 kt copper
32.3 million ozs silver
64% increase in tonnes
12% increase in copper grade
4% increase in silver grade
84% increase in contained copper metal
71% increase in contained silver ounces
Zinc-Lead-Silver Zones
All Veins 4,668 kt
3.46% Zn
1.21% Pb
43 g/t Ag
161.3 kt zinc
56.3 kt lead
6.4 million ozs silver
72% increase in tonnes
5% lower zinc grade
26% higher lead grade
no change
63% increase in contained zinc metal
117% increase in contained lead metal
72% increase in contained silver ounces
Total (Copper-Silver + Zinc-Lead-Silver Zones)
Total 26,458 kt
1.63% Cu
45 g/t Ag
430.5 kt copper
285.1 kt zinc
76.8 kt lead
38.7 million ozs silver
66% increase in tonnes
11% increase in copper grade
3% increase in silver grade
83% increase in contained copper metal
44% increase in contained zinc metal
72% increase in contained lead metal
71% increase in contained silver ounces
Suite 2100 – 510 West Georgia Street
Vancouver, BC, V6B 0M3, Canada
Tel: 604-684-8894 Fax: 604-688-2180
www.capstonemining.com
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Brad Mercer, SVP Exploration and Operations said, “Since the Resource stated in the 2018 Technical Report, our
exploration team has drilled 108,000 meters within a budget of US$10 million. This new Resource Estimate has
exceeded our expectation to upgrade Vein 20, the principal zone in the MNFWZ, to Indicated Class, prev iously
estimated as Inferred in 2018. We also extended high grades into a previously undrilled area, thus adding
unexpected tonnage in a key part of our development plan, and luckily the vein is wider up dip which bodes well for
mining costs, dilution control and lower development rates per tonne. We believe there is additional exploration
potential and we are making plans to test new step-out targets in H2 2020.”
The figures below illustrate the Resource Estimate growth of Vein 20 in the MNFWZ , as of Apr il 30, 2020 with a
comparison to December 31, 2019. To see the full VRify 3D model, click HERE.
MNFWZ Vein 20 “Principal Zone” as at December 31, 2019
Resource Estimate of
Vein 20, as of Apr 30, 2020,
compared to Dec 31, 2019
• 13,086 kt, 118% increase in
tonnes
• 2.35% Cu, 4% increase in
copper grade
• 52 g/t Ag, 3% increase in
silver grade
• 678 million lbs copper, 127%
increase in contained copper
metal
• 21.9 million ozs silver, 124%
increase in contained silver
ounces
MNFWZ Vein 20 “Principal Zone” as at April 30, 2020
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Darren Pylot, Capstone’s President and CEO said, “These results demonstrate why I have been saying ‘the best
has yet to come at Cozamin’, which is incredible given the mine has generated over US$450 million in cumulative
free cash flow since 2007. We are nearly six months away from seeing a new chapter for Cozamin, as copper and
silver production expands by at least 50% to over 50 million pounds of copper and 1.5 million ounces of silver per
year, respectively.”
NEXT STEPS
Capstone is taking the next steps to convert Mineral Resources to Mineral Reserve and is aiming to publish an
updated Mineral Reserve and technical report in Q3 2020.
There are three key infrastructure improvements required to debottleneck mine production by the end of 2020, of
which the first two were completed early in Q2 2020:
1. a new 818m long ventilation raise,
2. increased underground electrical substation capacity, and
3. a new section of ramp to complete a one-way traffic circuit, remains on schedule for completion in Q4
2020.
We are currently looking at opportunities to further increase value, such as paste backfill and improved mining
dilution control, and will report the status of these either in the technical report update in Q3 or later in 2020.
TABLE 1 – Estimate of Copper-Silver Zone Mineral Resources by Class at a US$50 NSR/t Cut-off as at April
30, 2020
Classification
Tonnes
(kt)
Copper
(%)
Silver
(g/t)
Zinc
(%)
Lead
(%)
Copper
Metal
(kt)
Silver
Metal
(koz)
Zinc
Metal
(kt)
Lead
Metal
(kt)
MNFWZ Vein 20
Measured (M) - - - - - - - - -
Indicated (I) 13,086 2.35 52 0.33 0.03 308 21,936 43 4
Total M + I 13,086 2.35 52 0.33 0.03 308 21,936 43 4
Inferred 3,068 1.41 45 0.67 0.04 43 4,441 21 1
MNFWZ Other Copper-Silver Veins
Measured (M) - - - - - - - - -
Indicated (I) 5,383 1.38 31 0.58 0.07 74 5,412 31 4
Total M + I 5,383 1.38 31 0.58 0.07 74 5,412 31 4
Inferred 1,448 1.38 36 0.97 0.13 20 1,693 14 2
MNV San Roberto Copper-Silver Zone
Measured (M) 407 1.24 53 1.23 0.40 5 698 5 2
Indicated (I) 2,914 1.06 45 1.55 0.39 31 4,206 45 11
Total M + I 3,321 1.08 46 1.51 0.39 36 4,903 50 13
Inferred 3,813 0.70 37 1.53 0.14 27 4,555 58 5
Total – Copper-Silver Zones
Measured (M) 407 1.24 53 1.23 0.40 5 698 5 2
Indicated (I) 21,383 1.93 46 0.56 0.09 413 31,591 119 19
Total M + I 21,790 1.92 46 0.57 0.09 418 32,284 124 20
Inferred 8,330 1.08 40 1.12 0.10 90 10,689 93 9
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Mineral Resources are classified according to CIM (2014) definitions, estimated following CIM (2019) guidelines and have an
effective date of April 30, 2020. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are
not Mineral Reserves do not have demonstrated economic viability. The independent Qualified Person for the estimates is
Mr. Garth D. Kirkham, P. Geo., FGC., of Kirkham Geosystems Ltd. Mineral Resources are reported using NSR350 formula:
Cu*65.024 + Ag*0.438 + Zn*10.755 + Pb*6.981. Metal price assumptions (in US$) used to calculate the NSR for all deposits
are: Cu = $3.50/lb, Ag = $18.00/oz, Zn = $1.20/lb, and Pb = $1.00/lb. An exchange rate of MX$18.50 per US$1 is assumed.
The following metal recoveries are used: 90% Cu, 74% Ag, 79% Zn, 76% Pb. Totals may not sum exactly due to rounding.
The NSR cut-off of US$50/tonne is based on historical mining and milling costs plus general and administrative costs. The
Mineral Resources consider underground mining by long-hole stoping and mineral processing by flotation. No dilution is
incorporated in the Mineral Resource. All metals are reported as contained. Mineral Resource estimates do not account for
mineability, selectivity, mining loss and dilution. These Mineral Resource estimates include Inferred Mineral Resources
considered too speculative geologically to apply economic considerations for categorization as Mineral Reserves. However, it
is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Resources.
The current Mineral Reserves at the MNFWZ are primarily located in the principal ve in, Vein 20, with some
additional material within an adjacent structure called Vein 10, that are actively being mined. These two veins, of
the eight MNFWZ veins modeled, are best suited to the current mining method and are the principal target of an
upcoming mineral reserve estimate predicated on the large increase in Indicated Class Mineral Resources. The
potential of the remaining six veins represent a future exploration opportunity. Because of their relative position in
the hanging wall, five of the six adjacent MNFWZ veins are intercepted coincidentally by drill holes targeting the
principal ore structures, Vein 20 and Vein 10. All holes are terminated after testing for Vein 22 in the Footwall of the
principal ore zone, Vein 20. Therefore, each drill hole testing the principal targets incidentally adds to our
knowledge base for all other veins.
TABLE 2 – Estimate for Zinc-Lead-Silver Zone Mineral Resources by Class at a US$50 NSR/t Cut-off as at
April 30, 2020
Classification
Tonnes
(kt)
Copper
(%)
Silver
(g/t)
Zinc
(%)
Lead
(%)
Copper
Metal
(kt)
Silver
Metal
(koz)
Zinc
Metal
(kt)
Lead
Metal
(kt)
MNFWZ Zinc-Lead-Silver Veins
Measured (M) - - - - - - - - -
Indicated (I) 2,830 0.25 42 3.33 1.63 7 3,821 94 46
Total M + I 2,830 0.25 42 3.33 1.63 7 3,821 94 46
Inferred 2,682 0.21 37 4.28 2.60 6 3,182 115 70
MNV San Rafael Zinc-Lead-Silver Zone
Measured (M) - - - - - - - - -
Indicated (I) 1,570 0.30 46 3.59 0.52 5 2,312 56 8
Total M + I 1,570 0.30 46 3.59 0.52 5 2,312 56 8
Inferred 3,060 0.24 37 3.26 0.35 7 3,633 100 11
MNV San Roberto Zinc-Lead-Silver Zone
Measured (M) - - - - - - - - -
Indicated (I) 268 0.20 31 4.05 0.72 1 270 11 2
Total M + I 268 0.20 31 4.05 0.72 1 270 11 2
Inferred 523 0.13 25 3.49 0.43 1 423 18 2
Total – Zinc-Lead-Silver Zones
Measured (M) - - - - - - - - -
Indicated (I) 4,668 0.27 43 3.46 1.21 12 6,403 161 56
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Classification
Tonnes
(kt)
Copper
(%)
Silver
(g/t)
Zinc
(%)
Lead
(%)
Copper
Metal
(kt)
Silver
Metal
(koz)
Zinc
Metal
(kt)
Lead
Metal
(kt)
Total M + I 4,668 0.27 43 3.46 1.21 12 6,403 161 56
Inferred 6,265 0.22 36 3.71 1.32 14 7,239 233 83
Mineral Resources are classified according to CIM (2014) definitions, estimated following CIM (2019) guidelines and have an
effective date of April 30, 2020. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability. The independent Qualified Person for the estimates is Mr.
Garth D. Kirkham, P. Geo., FGC., of Kirkham Geosystems Ltd. Mineral Resources are reported using NSR350 formula:
Cu*65.024 + Ag*0.438 + Zn*10.755 + Pb*6.981. Metal price assumptions (in US$) used to calculate the NSR for all deposits
are: Cu = $3.50/lb, Ag = $18.00/oz, Zn = $1.20/lb, and Pb = $1.00/lb. An exchange rate of MX$18.50 per US$1 is assumed.
The following metal recoveries are used: 90% Cu, 74% Ag, 79% Zn, 76% Pb. Totals may not sum exactly due to rounding. The
NSR cut-off of US$50/tonne is based on historical mining and milling costs plus general and administrative costs. The Mineral
Resources considers underground mining by long-hole stoping and mineral processing by flotation. No dilution is incorporated
in the Mineral Resource. All metals are reported as contained. Mineral Resource estimates do not account for mineability,
selectivity, mining loss and dilution. These Mineral Resource estimates include Inferred Mineral Resources considered too
speculative geologically to apply economic considerations for categorization as Mineral Reserves. However, it is reasonably
expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Resources.
TABLE 3 – Estimate for All Zones Mineral Resources by Class at a US$50 NSR/t Cut-off as at April 30, 2020
Classification
Tonnes
(kt)
Copper
(%)
Silver
(g/t)
Zinc
(%)
Lead
(%)
Copper
Metal
(kt)
Silver
Metal
(koz)
Zinc
Metal
(kt)
Lead
Metal
(kt)
All Zones (Copper-Silver + Zinc-Lead-Silver)
Measured (M) 407 1.24 53 1.23 0.40 5 698 5 2
Indicated (I) 26,051 1.63 45 1.08 0.29 425 37,993 280 75
Total M + I 26,458 1.63 45 1.08 0.29 431 38,687 285 77
Inferred 14,594 0.71 38 2.23 0.62 104 17,928 326 91
Mineral Resources are classified according to CIM (2014) definitions, estimated following CIM (2019) guidelines and have an
effective date of April 30, 2020. Mineral Resources are reported inclusive of Mineral Reserves. Mineral Resources that are
not Mineral Reserves do not have demonstrated economic viability. The independent Qualified Person for the estimates is
Mr. Garth D. Kirkham, P. Geo., FGC., of Kirkham Geosystems Ltd. Mineral Resources are reported using NSR350 formula:
Cu*65.024 + Ag*0.438 + Zn*10.755 + Pb*6.981. Metal price assumptions (in US$) used to calculate the NSR for all deposits
are: Cu = $3.50/lb, Ag = $18.00/oz, Zn = $1.20/lb, and Pb = $1.00/lb. An exchange rate of MX$18.50 per US$1 is assumed.
The following metal recoveries are used: 90% Cu, 74% Ag, 79% Zn, 76% Pb. Totals may not sum exactly due to rounding.
The NSR cut-off of US$50/tonne is based on historical mining and milling costs plus general and administrative costs. The
Mineral Resources considers underground mining by long-hole stoping and mineral processing by flotation. No dilution is
incorporated in the Mineral Resource. All metals are reported as contained. However, it is reasonably expected that the
majority of Inferred Mineral Resources could be upgraded to Indicated Resources.
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 considered too speculative geologically to apply economic considerations for
categorization as Mineral Reserves.
MINERAL RESOURCE ESTIMATE METHODOLOGY
The Mineral Resource estimate reported herein was prepared by Garth Kirkham of Kirkham Geosystems Ltd. of
Burnaby, BC, Canada, an Independent Qualified Person under Canadian Securities Administrators’ National
Instrument 43-101 (“NI 43-101”). The Mineral Resources presented herein have been estimated in conformity with
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generally accepted CIM “Estimation of Mineral Resource and Mineral Reserves Best Practices” guidelines and are
reported in accordance with NI 43-101. Mineral resources that are not Mineral Reserves do not have demonstrated
economic viability. The estimate was completed using MineSightTM software using a three-dimensional block model
(12 metre by 5 metre by 10 metre block size with 4 metre by 0.5 metre by 5 metre sub- blocks). The MNFWZ model
is comprised of eight interpreted three-dimensional wireframes which were the primary estimation domains and
hard boundaries were used to constrain the interpolation of grades into the block model. Interpolation parameters
have been derived based on geostatistical analysis conducted on 1 metre composited drill holes. Block grades
have been estimated using Ordinary Kriging (OK) methodology and the mineral resources have been classified
based on proximity to sample data and the continuity of mineralization in accordance with CIM Definition Standards
along with Mineral Resource and Mineral Reserve Estimation Best Practice Guidelines (2019). The MNFWZ
resource has been estimated using a total of 1,128 diamond drill holes with 4,371 sample composites.
ABOUT CAPSTONE MINING CORP.
Capstone Mining Corp. is a Canadian base metals mining company, focused on copper. 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 has the large scale 70% owned copper-iron Santo Domingo development project in
Region III, Chile, in partnership with Korea Resources Corporation, 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. We are committed to the responsible development of our assets and the
environments in which we operate. Our headquarters are in Vancouver, Canada and we are listed on the Toronto
Stock Exchange (TSX). Further information is available at www.capstonemining.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Jerrold Annett, VP, Strategy and Capital Markets
416-572-2272
Virginia Morgan, Manager, IR and Communications
604-674-2268
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This news release, and the documents incorporated by reference herein, contains “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 of 1995 (collectively, “forward-looking statements”). These
forward-looking statements are made as of the date of this document and Capstone Mining Corp. (“Capstone” or
the “Company”) does not intend, and does not assume any obligation, to update these forward-looking statements,
except as required under applicable securities legislation. Forward-looking statements relate to future events or
future performance and reflect our expectations or beliefs regarding future events. Forward-looking statements
include, but are not limited to, statements with respect to the continuing success of mineral exploration, Capstone’s
ability to fund future exploration activities, the estimation of mineral resources and mineral reserves, the real ization
of mineral reserve estimates, the timing and amount of estimated future production, costs of production and capital
expenditures, the success of our mining operations, the estimations for potential quantities and grade of inferred
resources and exploration targets, environmental risks, unanticipated reclamation expenses and title disputes. In
certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects”,
“aiming”, “approximately”, “guidance”, “scheduled”, “target”, “estimates”, “forecasts”, “extends”, “convert”,
“potential”, “intends”, “anticipates”, “believes” or variations of such words and phrases, or statements that certain
actions, events or results “may”, “could”, “should”, “would”, “will”, “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 that may cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or i mplied
by the forward-looking statements. Such factors include, amongst others, risks related to inherent hazards
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associated with mining operations and closure of mining projects, the inherent uncertainty of mineral exploration
and estimations of exploration targets, potential delays in exploration due to COVID-19 or governmental action,
future prices of copper and other metals, compliance with financial covenants, surety bonding, our ability to raise
capital or fund explorations, Capstone’s ability to acquire properties for growth, counterparty risks associated with
sales of our metals, foreign currency exchange rate fluctuations, changes in general economic conditions, accuracy
of mineral resource and mineral reserve estimates, operating in foreign jurisdictions with risk of changes to
governmental regulation, compliance with governmental regulations, compliance with env ironmental laws and
regulations, reliance on approvals, licences and permits from governmental authorities, im pact of climatic
conditions on our operations, aboriginal title claims and rights to consultation and accommodation, land reclamation
and mine closure obligations, uncertainties and risks related to the potential development of the Cozamin project,
increased operating and capital costs, challenges to title to our mineral properties, maintaining ongoing social
license 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, risks associated with joint venture partners, our ability to integrate
new acquisitions into our operations, cybersecurity threats, legal proceedings, 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, all of which are filed and available for review under the Company’s profile on SEDAR
at www.sedar.com. Although the Company 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 should not place undue reliance on our forward-looking statements.
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, news releases and MD&A’s (collectively the
“Disclosure Documents”) available 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.
The Technical Information in this news release has been prepared in accordance with NI 43-101 and reviewed and
approved by Brad Mercer, P. Geol., Capstone's Senior Vice President, Operations and Exploration, a Qualified
Person and the person who oversees exploration activities on the Cozamin Mine property.