Capstone Reports 2009 Year-End Reserve & Resource Estimates

VANCOUVER, March 17 /CNW/ - Capstone Mining Corp. (CS: TSX) today reported mineral reserve and resource estimates for its Cozamin and Minto mines, as well as the Kutcho project, as at December 31, 2009. The new mineral reserve estimate at Cozamin incorporates the mineral resources in the San Roberto deposit and the adjacent San Rafael deposit announced on March 2, 2010, whereas the Minto mineral reserve and resource estimates were included in the Phase IV pre-feasibility study, the results of which were announced December 15, 2009, and the Kutcho mineral resource estimates included in the preliminary economic assessment, the results of which were reported September 15, 2009.

Commenting on the 2009 estimates, Mr. Darren Pylot, Vice Chairman and CEO of Capstone said "Capstone ended 2009 with a robust mineral reserve inventory, sufficient to provide more than eight year operating lives for both of our operating mines. In addition, the mineral resources not yet converted to mineral reserves provide some near term opportunities for continued reserve replacement as additional work is completed, and economics justify. With significant exploration potential at both mines, as well as the development potential at the high grade Kutcho project, Capstone has ample opportunities to continue its record of strong organic growth through near mine exploration."

The following tables summarize the mineral reserve and resource estimates for both of the Company's mines and the Kutcho project as at December 31, 2009.

    
     Capstone Mining - Mineral Reserves Estimates as of December 31, 2009
     --------------------------------------------------------------------

    -------------------------------------------------------------------------
    Mineral Reserves
    -------------------------------------------------------------------------
                   Category    000s    Cu      Zn      Pb      Ag      Au
                             Tonnes     %       %       %     g/t     g/t
    -------------------------------------------------------------------------
    Cozamin
      Copper
       Deposit       Proven   1,610   2.16     1.01   0.52    76.0    0.06
                   Probable   5,932   1.62     1.57   0.30    59.0    0.11
    -------------------------------------------------------------------------
                      Total   7,542   1.73     1.45   0.35    63.0    0.10
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
      Zinc Deposit   Proven     -       -        -      -      -        -
                   Probable   1,865   0.25     3.12   0.43    37.0    0.47
                      Total   1,865   0.25     3.12   0.43    37.0    0.47
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Cozamin          Proven   1,610   2.16     1.01   0.52    76.0    0.06
    Sub-total      Probable   7,797   1.29     1.94   0.33    54.0    0.20
    -------------------------------------------------------------------------
                      Total   9,407   1.44     1.78   0.37    58.0    0.17
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
      Minto          Proven   9,775   1.69       -      -      6.1    0.67
                   Probable   1,118   1.25       -      -      4.3    0.38
    -------------------------------------------------------------------------
                      Total  10,893   1.64       -      -      5.9    0.64
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------


    ---------------------------------------------------------------
    Mineral Reserves                   Contained Metal*
    ---------------------------------------------------------------
                                                       Ag      Au
                   Category    Cu      Zn      Pb     000s    000s
                              m lbs   m lbs   m lbs    ozs     ozs
    ---------------------------------------------------------------
    Cozamin
      Copper
       Deposit       Proven     77      36      19    3,951     3
                   Probable    211     205      40   11,255    21
    ---------------------------------------------------------------
                      Total    288     241      58   15,207    24
    ---------------------------------------------------------------

    ---------------------------------------------------------------
      Zinc Deposit   Proven     -       -       -       -      -
                   Probable     10     128      18    2,233    28
                      Total     10     128      18    2,233    28
    ---------------------------------------------------------------

    ---------------------------------------------------------------
    Cozamin          Proven     77      36      19    3,951     3
    Sub-total      Probable    222     333      57   13,488    49
    ---------------------------------------------------------------
                      Total    298     369      76   17,439    52
    ---------------------------------------------------------------

    ---------------------------------------------------------------
      Minto          Proven    364      -       -     1,911   211
                   Probable     31      -       -       153    14
    ---------------------------------------------------------------
                      Total    395      -       -     2,064   224
    ---------------------------------------------------------------
    Total Mineral Reserves     693     369      76   19,504   277
    ---------------------------------------------------------------
    * Totals may not add due to rounding

    The parameters used to estimate the mineral reserves, as well as the
responsible qualified persons are detailed below. The mineral resources from
which the mineral reserves are derived are tabulated below.


     Capstone Mining - Mineral Resource Estimates as of December 31, 2009
     --------------------------------------------------------------------

    -------------------------------------------------------------------------
    Mineral Resources - inclusive of mineral reserves
    -------------------------------------------------------------------------

                   Category    000s    Cu      Zn      Pb      Ag      Au
                             Tonnes     %       %       %     g/t     g/t
    -------------------------------------------------------------------------
    Cozamin

      Copper
       Deposit     Measured   2,078   2.33    1.14    0.53    84.4    0.07
                  Indicated   6,604   1.73    1.71    0.33    64.4    0.13
                  -----------------------------------------------------------
                    M&I(xx)   8,682   1.88    1.58    0.38    69.1    0.12
                  -----------------------------------------------------------
                   Inferred   2,376   1.44    1.69    0.18    52.6    0.11
                  -----------------------------------------------------------

                  -----------------------------------------------------------
      Zinc
       Deposit     Measured     0       0       0       0       0       0
                  -----------------------------------------------------------
                  Indicated   1,983   0.27    3.33    0.47    41.2    0.50
                  -----------------------------------------------------------
                    M&I(xx)   1,983   0.27    3.33    0.47    41.2    0.50
                  -----------------------------------------------------------
                   Inferred   1,697   0.12    2.95    0.72    30.1    0.64
                  -----------------------------------------------------------

                  -----------------------------------------------------------
      Sub-total    Measured   2,078   2.33    1.14    0.53    84.4    0.07
                  -----------------------------------------------------------
                  Indicated   8,587   1.40    2.09    0.36    59.0    0.22
                  -----------------------------------------------------------
                    M&I(xx)  10,665   1.58    1.90    0.40    63.9    0.19
                  -----------------------------------------------------------
                   Inferred   4,073   0.89    2.22    0.41    43.2    0.33
                  -----------------------------------------------------------

                  -----------------------------------------------------------
    Minto          Measured  15,442   1.49                    5.48    0.59
                  -----------------------------------------------------------
                  Indicated  14,411   0.94                    3.42    0.30
                  -----------------------------------------------------------
                    M&I(xx)  29,852   1.22                    4.48    0.45
                  -----------------------------------------------------------
                   Inferred   5,849   0.91                    2.93    0.25
                  -----------------------------------------------------------

                  -----------------------------------------------------------
    Kutcho         Measured   5,421   2.15    2.86            31.4    0.34
                  Indicated   4,994   2.14    2.83            33.5    0.39
                  -----------------------------------------------------------
                    M&I(xx)  10,415   2.14    2.85            32.4    0.36
                  -----------------------------------------------------------
                   Inferred   1,893   2.09    2.93            33.6    0.46
                  -----------------------------------------------------------

    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Mineral Resources
     - inclusive of mineral
     reserves                           Contained Metal
    ---------------------------------------------------------------
                                                       Ag      Au
                   Category    Cu       Zn      Pb   000s    000s
                              m lbs   m lbs   m lbs   ozs     ozs
    ---------------------------------------------------------------
    Cozamin

      Copper
       Deposit     Measured    107      52     25     5,638     5
                  Indicated    253     250     48    13,662    28
                  -------------------------------------------------
                    M&I(xx)    360     302     73    19,300    33
                  -------------------------------------------------
                   Inferred     76      89     10     4,019     9
                  -------------------------------------------------

                  -------------------------------------------------
      Zinc
       Deposit     Measured     0       0      0        0      0
                  -------------------------------------------------
                  Indicated     12     146     21     2,627    32
                  -------------------------------------------------
                    M&I(xx)     12     146     21     2,627    32
                  -------------------------------------------------
                   Inferred      5     110     27     1,644    35
                  -------------------------------------------------

                  -------------------------------------------------
      Sub-total    Measured    107      52     25     5,638     5
                  -------------------------------------------------
                  Indicated    265     395     69    16,289    61
                  -------------------------------------------------
                    M&I(xx)    371     447     93    21,928    65
                  -------------------------------------------------
                   Inferred     80     199     36     5,662    44
                  -------------------------------------------------

                  -------------------------------------------------
    Minto          Measured    506                    2,718   293
                  -------------------------------------------------
                  Indicated    299                    1,588   142
                  -------------------------------------------------
                    M&I(xx)    805                    4,306   434
                  -------------------------------------------------
                   Inferred    117                      550    48
                  -------------------------------------------------

                  -------------------------------------------------
    Kutcho         Measured    257     342            5,482    59
                  Indicated    236     312            5,376    62
                  -------------------------------------------------
                    M&I(xx)    492     654           10,857   121
                  -------------------------------------------------
                   Inferred     87     122            2,047    28
                  -------------------------------------------------

    ---------------------------------------------------------------
    Total Measured &
     Indicated Mineral
     Resources                1,669   1,101     93   37,090   620
    Additional
     Inferred Mineral
     Resources                 284     322      37    8,260   120
    ---------------------------------------------------------------
    * Totals may not add due to rounding
    (xx) M&I = Measured and Indicated
    

Cozamin

The mineral reserves estimates for the Cozamin deposits were completed by Capstone staff under the supervision of Robert Barnes P.Eng., of Capstone, using accepted, industry standard, methods that conform to National Instrument 43-101. The reserve model has been developed using Gemcom GEMS(TM).

The data and methodology utilized for the mineral reserve estimate is as follows:

    
    -   The Cozamin mineral reserves were estimated using as a basis the
        mineral resource model provided by Robert Sim, P.Geo. of SIM
        Geological Inc. ("SGI") and announced March 2, 2010. The mineral
        reserve estimate was prepared by Cozamin Mine staff under the
        supervision of Robert B. Barnes, P.Eng., V.P. Operations Capstone
        Mining Corp, a Qualified Person under NI 43-101.

    -   The mineral resource model was imported into Gemcom GEMS(TM)
        software. Mining shapes were created to define the limit of economic
        mining blocks from which mineral reserves were estimated. GEMS(TM)
        was used to interrogate the resource model and report material within
        the confines of the mining shapes. Mining recovery and dilution were
        calculated individually for each stope with due consideration given
        to the mining method. A minimum mining width was set at 3 meters
        including dilution. Dilution estimated at 12% for all mining was
        based on mining method, either cut and fill at 13% dilution or long
        hole mining at 10% for wide stopes over 7 meters and 14% for stopes
        under 7 meters.

    -   A lower limit economic NSR cut-off value ("COV") of $35 per tonne was
        estimated based on historical and projected mining and processing
        costs. The basis for the COV came from projected operating costs of
        $18/t for mining, $12.50/t for processing and $4.50/t for general and
        administration costs. Metal price assumptions used in estimating the
        COV were US$2.50 per lb of copper, US$0.80 per lb of zinc, US$0.85
        per lb of lead and US$4.00 per oz of silver (the latter is based on a
        silver stream agreement).

    -   Only measured and indicated mineral resource blocks were used in the
        estimation of mineral reserves. Inferred resources contained within a
        mining shape were treated as dilution at the metal grades attributed
        to those blocks in the resource model then treated as follows.
        Dilution grades, including any inferred resource blocks, were
        calculated as the block grade factored down to 33 % of the block
        copper grade; 33 % of the block lead grade; 33 % of the block zinc
        grade; and 20 % of the block silver grade.

    -   The mineral reserve mining blocks were designed with horizontal
        (sill) and vertical pillars to provide ground support. Approximately
        1.1 million tonnes or approximately 11% of the measured and indicated
        resources at 1.82% copper are left as pillars.
    

Minto

The mineral resources are reported at a 0.5% copper cut-off for all deposits and the mineral reserves are reported at a 0.62%, 0.55%, 0.58% and 0.56% copper cut-off grade (CCOG) for Minto Main, Minto North, Ridgetop and Area 2/118 respectively. Mineral reserves and resources for the Minto Mine, except for the Minto North mineral resources, were estimated by SRK Consulting (Canada) Inc. The qualified persons responsible for the 2009 mineral resources estimate in the Area 2/118 and Ridgetop deposits is Dr. Wayne Barnett, Ph.D., Pr.Sci.Nat., an independent qualified person as this term is defined in National Instrument 43-101. The effective date of this resource estimate is June 1, 2009. Marek Nowak, P.Eng., analyzed the data, reviewed and validated the mineral resource estimates. The Minto North mineral resource estimate was completed by Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd., an independent qualified person as this term is defined in National Instrument 43-101; the effective date of this mineral resource estimate is December 1, 2009.

Dino Pilotto, P.Eng., of SRK Consulting (Canada) Inc. estimated the mineral reserves for all deposits comprising the Minto project as part of the Phase IV Preliminary Feasibility Study ("Phase IV PFS"), the results of which were reported in December 2009. The assumed start date for the Phase IV PFS was January 1, 2010, with remaining mineral reserves in the Minto Main pit forecast to that date. Due to some differences in actual mining production in Q4/09 versus that forecast, the actual remaining mineral reserve at year end is slightly different to that reported herein, but it makes no significant difference to the life of mine plan. Mr. Pilotto is the Qualified Person responsible for the estimates in the Phase IV PFS. Additional details on the mineral resource and mineral reserve estimates for the Minto mine can be found in the technical report filed on SEDAR in December 2009.

Kutcho

The mineral resources for the Kutcho property are reported at a 1.5% copper cut-off for all deposits, as detailed in a news release dated February 9, 2009. The mineral resources for the Kutcho Project were estimated by Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd., an independent Qualified Person as defined by NI43-101. Additional details can be found in the news releases dated February 9, 2009 and September 15, 2009 and in the preliminary economic assessment and technical report filed on SEDAR in September 2009.

The TSX does not accept any responsibility for the adequacy or accuracy of this press release.

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 of 1995 (collectively, "forward-looking statements"). These forward-looking statements are made as of the date of this document and Capstone Mining Corp. (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 Company management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "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 which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of mineral resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Compliance with NI43-101

Unless otherwise indicated, Capstone has prepared the technical information in this news release ("Technical Information") based on information contained in the technical reports and news releases (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"). For readers to fully understand the information in this news release, they should read the Technical Reports (available on www.sedar.com) in their entirety, including all qualifications, assumptions and exclusions that relate to the information set out in this presentation 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 following employee of Capstone, each a Qualified Person, reviewed Technical Information contained in this news release: Robert Barnes, Professional Engineer, reviewed the mineral reserve estimate and reconciliation related to the Cozamin Mine, Robert Sim, P.Geo., of SIM Geological Inc. ("SGI"), reviewed the mineral resource estimates for the Cozamin mine, and Brad Mercer, P.Geol., reviewed the mineral resource estimates for the Minto mine and Kutcho project and Dino Pilotto, P.Eng., of SRK Consulting (Canada) Inc. reviewed the mineral reserve estimates reported herein for the Minto Mine.

SOURCE Capstone Mining Corp.

For further information: For further information: about Capstone, please contact: Darren Pylot, Vice Chairman & CEO, Stephen Quin, President & COO, Or Investor Relations' Zobeida Slogan at (604) 684-8894 or (866) 684-8894, zslogan@capstonemining.com


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