Capstone Reports Additional High Grade Intercepts & Timing to Develop Underground Access for Major Step-out Drill Program on the Mala Noche Footwall Zone at Cozamin Mine

Hole U242 Intercepts 3.3% Cu & 44g/t Ag over 7.5m (including 6.6% Cu & 84g/t Ag over 3.1m)
Hole U246 Intercepts 3.0% Cu & 48g/t Ag over 6.8m (including 3.6% Cu & 55g/t Ag over 5.6m)

VANCOUVER, Jan. 18 /CNW/ - Capstone Mining Corp. (CS: TSX) today announced drill results for the five remaining exploration drill holes from the 2010 underground drill program on the Mala Noche Footwall Zone (MNFWZ) at our Cozamin Mine, located in Zacatecas, Mexico. High grade holes CG-10-U242 and CG-10-U246 represent approximately 80m and 135m step outs respectively in the down dip direction from high grade hole CG-10-235 previously announced on October 20, 2010.  Highlights are presented in the table below and the full results for all five holes are in the table attached.

Drill Intercept Highlights for Mala Noche Footwall Zone Holes U242 and U246

Hole ID Target Area From (m) To (m) Interval
(m)*
True Width
(m)*
Copper
(%)
Silver
(g/t)
Lead
(%)
Zinc
(%)
CG-10-U242 MNFWZ 395.35 402.85 7.50 5.54 3.33 44.1 0.01 0.11
Including   399.75 402.85 3.10 2.29 6.56 83.98 0.02 0.22
CG-10-U246 MNFWZ 428.10 434.90 6.80 3.98 3.04 47.5 0.01 0.29
Including   429.00 434.55 5.55 3.25 3.57 55.2 0.01 0.35

Capstone intends to explore the MNFWZ in 2011 with a program of approximately 60 drill holes that will step out and infill to the east along strike and at depth. Two cross-cuts for drilling platforms are required, one from mine level 10 and one from level 12.3. One drift is nearing completion and the other is scheduled to be finished in early February.

"We are looking forward to finishing the two exploration cross-cuts that will give us the drill access we need to step-out on strike to the east and down dip, both areas where high grade copper mineralization in the MNFWZ remains open" said Brad Mercer, VP Exploration for Capstone.  Capstone is also encouraged by the similarity in vertical zonation of base metals in the MNFWZ and the Mala Noche Vein (MNV) as it may have positive implications for exploring other targets. The current copper reserve in the main MNV was discovered by drilling beneath the largely mined out silver-zinc zone and discovering that the vein transitioned from zinc-silver to copper-silver dominated mineralization. The mine property contains several other known structures marked by the numerous abandoned shafts and dumps of old silver mines. To the best of our knowledge these other structures have not been drill tested for copper mineralization at depth. "This offers an elegantly simple exploration strategy, drill beneath the abandoned silver mines to seek a transition to copper dominated mineralization" Mr. Mercer added.

Capstone believes the MNFWZ, a splay off the main MNV that hosts the current mineral reserves provides a near term opportunity to add high grade resources and potential high grade mill feed for the Cozamin operation. The Company aims to produce a NI 43-101 compliant mineral resource estimate before the end of 2011 to provide a basis to evaluate development options for the MNFWZ. To this end and as announced on December 1, 2010 a cross-cut has already been driven into the MNFWZ to investigate the tenor and nature of the mineralization. Subsequent to that announcement drifts have now been driven laterally along the hanging wall of the MNFWZ structure to the east for 60m and to the west for 103m, exposing the vein for mapping and chip sampling. Approximately 7,000 tonnes of development ore was mined from the drift where face chip samples average 2.5% copper over widths averaging 4.6m. Much of this development ore was sent to the mill but sufficient material was sequestered for in-house metallurgical testing. One bench test has been completed so far with a 93% recovery of the contained copper and a concentrate grade of 28% copper plus 400 g/t silver.

Please view the accompanying long-sections to put the latest drill intercepts into context:

http://capstonemining.com/i/maps/2011-02CozaminCuGradeTrend.jpg

http://capstonemining.com/i/maps/2011-02CozaminCuGradeXThickness.jpg

Quality Assurance/Quality Control

The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 and reviewed by Brad Mercer, P. Geol., VP, Exploration of Capstone. Exploration activities at the Cozamin Mine are carried out under Mr. Mercer's supervision.

Analyses for copper, zinc, lead, silver and gold were completed by ALS Chemex using the following method.  The entire sample is crushed to a minimum of 70% minus 10 mesh.  A 250g subsample of the crushed material is then pulverized to 85% minus 200 mesh.  Gold and silver grades are determined by gravimetric fire assay using a 50g charge taken from the pulverized material.  Copper, zinc and lead are determined by ICP analysis after 4 acid digestion of a 0.4g subsample of the pulverized material.

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.

Details for the Remainder of the 2010 MNFWZ Drill Holes
To accompany Capstone Mining News Release Dated January 18, 2011

Hole ID Target Area From (m) To (m) Interval
(m)*
True Width
(m)*
Copper
(%)
Silver
(g/t)
Lead
(%)
Zinc
(%)
CG-10-U242 MNFWZ 341.15 342.20 1.05 0.77 3.26 31.62 0.01 0.10
And MNFWZ 395.35 402.85 7.50 5.54 3.33 44.1 0.01 0.11
including   399.75 402.85 3.10 2.29 6.56 83.98 0.02 0.22
CG-10-U243 MNFWZ 163.40 167.50 4.10 2.21 1.19 45.65 0.01 0.15
including   163.40 165.75 2.35 1.27 1.88 66.94 0.01 0.15
And MNFWZ 208.00 211.15 3.15 1.72 1.71 28.76 0.03 0.20
including   208.00 210.10 2.10 1.15 2.45 40.14 0.04 0.27
And MNFWZ 222.10 223.35 1.25 0.68 5.60 47.00 0.01 0.14
CG-10-U245 MNFWZ 119.50 120.70 1.20 0.90 1.86 37.37 0.01 0.11
  MNFWZ 123.05 125.30 2.25 1.69 2.42 40.71 0.02 0.31
CG-10-U246 MNFWZ 428.10 434.90 6.80 3.98 3.04 47.5 0.01 0.29
including   429.00 434.55 5.55 3.25 3.57 55.2 0.01 0.35
CG-10-U247 MNFWZ 112.10 113.75 1.65 1.58 0.36 5.2 0.00 0.01


SOURCE Capstone Mining Corp.

For further information:

about Capstone, please contact:

Darren Pylot, President & CEO,or Investor Relations' Jason Howeat (604) 684-8894 or (866) 684-8894 or    
email Capstone at info@capstonemining.com


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